If houses are getting cheaper over the years, why aren't millennials investing on their homes yet? Most millennials have minimum wage earnings making it a bit hard for them to shell out the cash for a down payment. As per CNBC there are several contributing factors that hinders them to purchase their own home.
Chief economist at Zillow, Stan Humphries stated that it's hard for millennials to dish out cash, most especially those who are receiving salaries that are just enough for them to get by.
"It's very difficult to come up with a down payment when so much of your monthly paycheck-especially on an entry-level salary-is going to your landlord instead of into your savings, buying conditions are getting better every day, and in time the allure of fixed housing payments and building wealth through home equity will draw more buyers out of rentals and into home ownership."
The chief economist at Trulia then added that:
"Housing has a 'millennial mismatch': Young adults tend to live in markets where home ownership is less affordable to them, these are markets where the level of home prices is still quite high compared to wages, there are markets, however, like New York and San Francisco, where millennials earn more than other households, but typically, nationally, they earn less than older households."
These may be just two factors but Forbes also made additional reports in regards to this question. Some of the factors that were cited is that "It's harder for them to get a mortgage." As per the website due to the strict standards of lenders most especially with debt to income ration, it is tough for the millennial buyer to invest on a home as some of them have more money in debt than their income.
Unstable economy can also be a factor in why they'd think twice in investing. Millennials are wiser in terms of decision making, as they would usually make sure that their finances are always inline.
