San Francisco-Area Millennials Place Homeownership Above Other Life Priorities

Many San Franciscans Planning First Home Purchase, but Persistent Homebuying Myths Hold Back Others

San Francisco’s millennials are straying from the norm as they redefine life’s priorities, according to the latest Bank of America Homebuyer Insights Report. Eighty-three percent of local millennials say owning a home is a top priority, more than being able to retire (73 percent) and far outranking getting married (47 percent) and having children (42 percent).

The report, which explores the attitudes, preferences, and behaviors of the modern homebuyer, also finds that many local millennials equate homeownership with personal (57 percent) and financial (49 percent) success. Prospective millennial buyers in San Francisco also associate purchasing a home with maturity (47 percent), adulthood (42 percent) and independence (30 percent).

Additional San Francisco-specific highlights from the report include:

Renter’s reservations: a reality check on common homebuying myths

• Local renters in San Francisco are torn on the “own vs. rent” debate, with 45 percent believing that renting long-term will be more expensive than buying a home. The other 55 percent say it will be just as or less expensive than owning.

• Yet, 73 percent believe their rent will continue to rise every year or every other year. And 47 percent pay more than 30 percent of their income in rent each month.

• When asked what they dislike about renting, San Franciscans (54 percent) are more likely than their national counterparts (52 percent) to dislike rising rental costs. They’re also more likely to feel like they’re throwing money away (51 percent vs. 49 percent).

• Top renter misconceptions in San Francisco include:
- Forty-three percent believe that 20 percent down is required to buy a home
- Nearly the same number (44 percent) believe they must pay private mortgage insurance if they don’t put 20 percent down
- More than one-quarter believe they need to have a “perfect” credit score to be considered for a mortgage

The five Ws of homebuying: Prospective buyers in San Francisco are being purposeful in their homebuying planning

Who: While 63 percent of first-time local buyers plan to buy with a spouse or partner, others are venturing out on their own, as 33 percent say they plan to purchase their first home solo.

What: When thinking about their first home, buyers in San Francisco prefer:
- A forever home (51 percent) vs. a starter home (49 percent)
- More square footage (52 percent) vs. a large backyard (48 percent)
- A modern layout (62 percent) vs. a home with “good bones” (38 percent)
- Updated appliances (71 percent) vs. an updated exterior (29 percent)

Where: 40 percent are looking to stay in the San Francisco area, but 47 percent plan to buy elsewhere.

When: 31 percent of local residents plan to buy in the next two years, and 63 percent say saving for a down payment is a financial priority.

Why: San Franciscans say having enough money saved (55 percent) and a higher salary (42 percent) are their top motivations to buy for the first time.

10/10/18


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