Millennials Dream of Home Ownership

Millennials are facing significant affordability challenges, but they definitely haven’t given up the dream of home ownership.

HSBC’s annual “Beyond the Bricks” survey shows that 34% of Canadian millennials own their own home, and 83% intend to buy within the next five years, although slow salary growth and increasing home prices will make that goal extremely challenging for most.

The main barrier to buying a home: not enough money saved for a down payment. According to the non-profit housing advocacy organization Generation Squeeze, millennials take an average of 13 years to save the 20% down payment on a median-priced home, while their parents needed just around five years to do so in 1976.

The HSBC survey showed that many millennials are willing to make sacrifices to own a home, including:

  • Spending less on leisure activities
  • Buying a smaller-than-ideal house
  • Buying in a less preferred location
  • Delaying children
  • Renting out space in their home, such as a basement apartment
  • Buying jointly with friends or family members

Financial help from parents was a factor for 37% of millenials who purchased a home, and 21% moved back home to save for a down payment.

Of those Millennials who bought a home within the past 2 years, 42% overspent their budget, mainly due to renovation and furniture costs.

In some ways, home is even more important to millennials than it was to their parents’ generation: 50% of millennials work from home, and 29% would like to, as compared to 33% and 16%, respectively, for baby boomers.