Young adults express such a strong desire to own a home that they are willing to take on extra work or make another major sacrifice in order to afford one. Thirty-six percent of millennial home buyers say they’ve taken a second job to save for a down payment, according to a new Redfin survey of about 500 respondents between the ages of 24 and 38 who plan to buy their first home in the coming year.
The top concern among these first-time home buyers is having enough money for a down payment; 50 percent cited it as their number one barrier to homeownership, followed by affording a home in their preferred location (45 percent) and rising home prices (41 percent). Millennials are finding other ways to save for a down payment aside from working multiple jobs. Thirteen percent say they have taken early distributions from their retirement funds, 24 percent say they received a cash gift from family members, and 12 percent say they’ve added inheritance money to their savings.
Ten percent of millennials say they’ve even sold cryptocurrency to make more money to apply toward a home purchase, according to the survey. Millennial households earning more than $100,000 were three times more likely to have sold cryptocurrency than those earning less. “For millennials who have launched their careers while working to pay off student loans in the last decade, having enough to set aside toward a down payment would have been a significant accomplishment,” says Redfin Senior Economist Sheharyar Bokhari. “These results reveal some of the inequalities that have been exacerbated in the years following the recession, with the well-off having more flexibility and, thereby, ability to become homeowners and build more wealth through advantages like financial support from family and the opportunity to invest in the stock market.”
The survey revealed that millennials plan to take some of the following actions to build financial stability in order to buy their first home.
- 32 percent plan to pursue additional employment.
- 19 percent intend to rent out a room to someone they know.
- 15 percent say they will drive for a ride-sharing service.
- 14 percent plan to split ownership of a home with friends or roommates.