AMELIA, Ohio — More than three-quarters — 78 percent — of millennials — 18-34-year-olds — view home ownership as part of achieving the “American Dream,” according to a study of Chicago residents commissioned by American Modern Insurance Group, a leading specialty residential insurer. The study, conducted by ORC International Inc., polled residents of the greater Chicago area to gauge sentiment around home ownership, renting and the financial considerations of both.
The survey found that a majority of millennial respondents who rent (86 percent) plan on owning a home someday, but the path to homeownership may be harder than many anticipated. In fact, according to the U.S. Census Bureau, homeownership rates across all age groups is at 62.6 percent, but homeownership rates amongst millennials is almost half the national average at just 34.1 percent.
“Younger generations are looking forward to the day they can call themselves homeowners, but they are up against significant financial obstacles,” said Brad Fisher, vice president, Specialty Clients Division at American Modern. “As a result, we are seeing an increase in the renters insurance market, with millennials driving much of that growth.”
Homeowner respondents of all ages cite their top reason for purchasing a home is because they view it as a better financial investment than renting (39 percent). However, for those respondents who currently rent and have never owned a home, the primary reason cited (41 percent) for not taking the plunge into ownership is an inability to afford the down payment and monthly expenses (i.e. mortgage, taxes, insurance, utility costs etc.).
The survey also asked respondents of all ages to share what’s most concerning to them when it comes to buying a home in today’s economic environment:
• 38 percent stated concerns over the value of the long-term investment (i.e. concern of re-sale value or housing bubble down the road);
• 25 percent cited inflated real estate values.
More than half of Chicago renters who live in the heart of the city (55 percent) are looking to purchase a home outside of the city to keep costs down, amongst other reasons. This number increases to 67 percent for millennial renters who indicate they are the age group most likely to plant roots outside of the city.