After years of resisting buying property, millennials are planning on real estate to build long-term wealth
- In a recent Bankrate survey, millennials said they were most interested in real estate as a long-term investment, choosing it over the stock market, cash investments, and cryptocurrency.
- Millennials chose it more often than any other age group, making them the most interested in real estate as an investment.
- This is a big change from Bankrate's 2018 study, where millennials reported that their preferred long-term investment was cash.
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While millennials have long been called out for not buying real estate as quickly as their parents' generation did, it turns out that it's not because they don't want to.
In a new Bankrate survey, millennials showed a preference for real estate above all other forms of long-term investment. Millennials chose real estate above cryptocurrency, the stock market, and even cash investments, making real estate the preferred type of investment for this age group.
Data from the Bankrate Financial Security Survey from June 2019 shows that 36% of millennials preferred real estate over other options when asked how they would prefer to invest money they wouldn't need for 10 years. Millennials beat out baby boomers and Gen Xers as the most interested in real estate as an investment.
This is a big change from Bankrate's 2018 study, where millennials reported that their preferred long-term investment was cash.
The 2019 study shows patterns in the other types of investments, including a trend for stock market investing to fluctuate with income. Data shows that those who make more than $50,000 per year are more likely to be interested in the stock market. An article from the Federal Reserve Bank of St. Louis says that only two in five millennials have had exposure to the stock market.
Just 9% of millennials preferred cryptocurrency, but millennials were still three times more interested in cryptocurrency as a long-term investment than Gen Xers.
When it comes to investing in a home, it might just be that millennials have had other things on their minds until now. Only 32.2% of millennials actually owned homes in 2015 according to Urban Institute. And, in a survey by INSIDER and Morning Consult, 30% who said they wanted to buy weren't actually saving for it.
Homeownership has long taunted millennials, but it seems that they're becoming more interested in the value real estate could provide. As Business Insider's Tanza Loudenback reports, millennials hold the largest share of new mortgages in the US as of November 2018. Millennials took on about 42% of new mortgages by dollar volume, putting them above Gen Xers for the first time ever.
Realtor.com reports that this number mainly derives from the fact that millennials are making smaller down payments and taking larger mortgages to buy, even though they're buying much less expensive homes.
As millennials start to take on more and more US mortgage dollars, it seems the main investment they have their eyes on is one they can use every day.
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