Austin-Area Millennials Place Homeownership Above Other Life Priorities
Many Austinites Planning First Home Purchase, but Persistent Homebuying Myths Hold Back Others
Austin’s millennials are straying from the norm as they redefine life’s priorities, according to the latest Bank of America Homebuyer Insights Report. Seventy-one percent of local millennials say owning a home is a top priority, nearly tied with being able to retire (72 percent), and far outranking getting married (48 percent) and having children (39 percent).
The report, which explores the attitudes, preferences, and behaviors of the modern homebuyer, also finds that many local millennials equate homeownership with personal (55 percent) and financial (41 percent) success. Prospective millennial buyers in Austin also associate purchasing a home with maturity (50 percent), adulthood (50 percent) and independence (41 percent).
Additional Austin-specific highlights from the report include:
Renter’s reservations: a reality check on common homebuying myths
Local renters in Austin are torn on the “own vs. rent” debate, with 59 percent believing that renting long-term will be more expensive than buying a home. The other 41 percent say it will be just as or less expensive than owning.
Yet, 87 percent believe their rent will continue to rise every year or every other year. And 47 percent pay more than 30 percent of their income in rent each month.
When asked what they dislike about renting, Austinites (62 percent) are significantly more likely than their national counterparts (43 percent) to say “not feeling like it’s truly home.” They’re also more likely to dislike rising rental costs (61 percent vs. 52 percent) and feel like they’re throwing money away (59 percent vs. 49 percent).
- Top renter misconceptions in Austin include:
- Forty-four percent believe that 20 percent down is required to buy a home.
- The same number (44 percent) believe they must pay private mortgage insurance if they don’t put 20 percent down.
- More than one-quarter believe they need to have a “perfect” credit score to be considered for a mortgage.
The five Ws of homebuying: Prospective buyers in Austin are being purposeful in their homebuying planning
Who: While 63 percent of first-time local buyers plan to buy with a spouse or partner, others are venturing out on their own, as 35 percent say they plan to purchase their first home solo.
What: When thinking about their first home, buyers in Austin prefer:
- A starter home (54 percent) vs. a forever home (46 percent).
- More square footage (57 percent) vs. a large backyard (43 percent).
- A modern layout (58 percent) vs. a home with “good bones” (42 percent).
- Updated appliances (77 percent) vs. an updated exterior (23 percent).
Where: 49 percent are looking to stay in the Austin area, while 30 percent plan to buy elsewhere.
When: 39 percent of local residents plan to buy in the next two years, and 72 percent say saving for a down payment is a financial priority.
Why: Austinites say having enough money saved (58 percent) and a higher salary (48 percent) are their top motivations to buy for the first time.
To learn more about the Bank of America Homebuyer Insights Report, click here.
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About the Bank of America Homebuyer Insights Report
Convergys Analytics conducted an online survey on behalf of Bank of America between January 16 and February 2, 2018. Convergys surveyed a national sample of 2,000 adults age 18+ who currently own a home or plan to in the future. In addition, an augment was conducted to reach 300 adults in seven local markets: Austin, Boston, Charlotte, Dallas, Nashville, Phoenix, and San Francisco. The margin of error for the national quota is +/- 2.6 percent, and the margin of error for the oversampled markets is approximately +/- 5.8 percent, with each reported at a 95 percent confidence level.
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Kris Yamamoto, Bank of America, 805.526.1910