Falls & Co. Survey Finds Inflation and Rising Mortgage Rates Not Enough to Sour Millennials on American Dream of Owning a Home

But Inflation Number One Factor Preventing Millennials from Home Ownership

CLEVELAND, Nov. 15, 2023 /PRNewswire/ -- Faced with high inflation, rising mortgage rates, economic uncertainty, high levels of debt and concerns about the climate, you might expect that the desire to own a home among U.S. millennials (ages 25-44) would be dampened. But according to a nationwide survey of 999 Americans by Falls & Co. – a Cleveland-based marketing firm with a portfolio of clients in the home industry – 89.5 % of millennials say owning a home is a part of their American dream, and less than one percent said that owning a home was not important to them.

The number one reason to own a home was emotional rather than rational. Sixty-three percent said they want to own a home because they like the idea of living in a home. Forty-four percent want to build wealth through home ownership. Surprisingly, major life events were not big drivers of a desire to buy a home. Only 23 % said getting married was a reason for buying a home, and just 20 % cited having children as a reason.

What do millennials want in a new home?

A whopping 76 % would prefer a single-family home, compared to just 3.6 % preferring a condominium, 8.6 % preferring an apartment, and only 3.7 % preferring a mansion.

When asked to rank the most important features of a home, respondents cited location as their number one criteria, followed by number of bedrooms and the home's size. Dead last on the list was curb appeal. Energy efficiency and having smart home devices also surprisingly ranked low among a group that has grown up with technology and against a backdrop of energy related issues.

Millennials also don't want to put much sweat equity into their homes. Just 16 % are interested in a fixer-upper. Thirty-two percent want a move-in ready home. Twenty-four percent want a home that needs only minor cosmetic repairs. And 13 % prefer to buy new.

And where would that dream home be located? In or around cities by a huge margin. Just 23 % said they'd want their home to be in a rural area, compared to 40 % who prefer the suburbs and 31 % who want to live in or close to a city. Those ages 35-39 were the most likely to want a home in or close to a city (41.2 %).

California and Florida topped the list of most and least desirable states to live in. Political considerations (18.2 %) and escaping natural disasters (16.1 %) were low on the list of reasons to choose a particular state. People preferred certain states over others mostly because of cost of living (54.3 %), being closer to family (37.2 %), safety/security (37 %), and job opportunities (34 %).

The biggest financial barrier preventing millennials from buying a home is inflation (57.9 %), followed by insufficient savings (47.7%), insufficient income (42 %), child expenses (33.2 %), student debt (23.1 %) and medical debt (19.4 %).

Only 14% believe their home will be smaller than their parents' home. Forty-six percent believe it will be bigger, and 40% believe it will be about the same size. There's a significant split between the expectations of men and women, however, with 53% of men expecting their home to be larger than their parents' home, compared to 39% of women. Also, despite home prices in the Midwest being generally less expensive, only 36% of people in the Midwest expect their homes to be larger than their parents' home, compared to roughly 50% in the West, 49% in the Northeast and 47% in the South.

Even with more people working from home due to COVID, modifying a home office ranked last in terms of where millennials would spend money to make their home just right (2.7%). Topping the list were the living room/great room (52.5%), kitchen (48.4 %) and main bedroom (40.3%). Men were 10% more likely to spend money in the bedroom, whereas women were 10% more likely to spend money in the kitchen.

Millennials were extremely uncertain when it came to whether mortgage rates or climate change would influence their decision to purchase a home. When asked whether climate change was more or less likely to influence their decision to buy a home, 54.4 % were unsure. Thirty-five percent said climate change made it more likely that they would buy a home, and only 10 % cited it as a reason for not purchasing a home. Forty-four percent of men actually said climate change would make them more likely to buy a home compared to just 28 % of women.

A few other interesting differences among ages, gender and geography:

• People in the West, where home prices are generally higher, believe it's more important to own a home than people in all other regions (64%). People in the Midwest, where homes are generally less expensive, place the least emphasis on owning a home (57.2%).
• Overall, 88 % say home ownership is very attainable, but men are more likely than women to feel this way (43.8 percent of men compared to 34.4% of women).
• Of those who say they envision themselves owning a home one day, younger people are more confident about this. A little over half of those between 25-29 say they'll own a home one day compared to 39.9 % of those aged 30-34, and 28 % of those between 35-39.

Falls & Co. conducted the survey to better understand the attitudes around home ownership among a generation of home buyers who have had to contend with giant upheavals in the housing industry (2008 housing crash, rising housing prices and mortgage rates, COVID, inflation and concerns about effects of climate change). View Full Survey Results

ABOUT FALLS & CO.

In an age of constant disruption and battling for attention, Falls & Co. focuses on telling powerful stories that get people to listen, believe and act. Falls & Co. is a full-service, strategic marketing firm founded in Cleveland, Ohio in 1989. The agency has deep expertise and experience in:

• PR & Communications
• Advertising & Design
• Brand & Strategy
• Digital & Direct
• Crisis & Public Affairs
• Culture & Talent Marketing

SOURCE Falls & Co.