5 Things Millennials are Willing to do to Afford a Home

Never let it be said that millennials aren’t flexible. When it comes to buying a new home, they are willing to consider all sorts of options to find the right place and the accompanying advantages. 

“Homeowners have significantly more wealth than renters over their lifetime,” says NewHomeSource chief economist Ali Wolf. “While not everyone should feel compelled to rush to buy a home today, it makes sense to start getting your ducks in a row now to eventually convert from renting to owning.” 

NewHomeSource’s Millennial survey asked what those in the demographic would be willing to do to get into the right house. Here are their answers: 

Explore Different Neighborhoods 

Millennials are willing to explore different neighborhoods before choosing a home due to a mix of financial, lifestyle, and work-related factors. With rising home prices and student loan debt, affordability is a top priority, leading them to consider areas they might not have before. The flexibility of remote and hybrid work allows them to prioritize lifestyle preferences, such as walkability, public transit, and cultural amenities, over proximity to an office. Many also view homeownership as an investment and seek neighborhoods with growth potential. Additionally, sustainability, diversity, and access to green spaces influence their decisions, making them more open to a variety of locations. 

Put More Money Down 

Millennials are willing to put more money down when choosing a home to secure better mortgage terms, reduce monthly payments, and increase their chances of approval in a competitive market. Many have delayed homeownership, saving them more time for a larger down payment. They also prioritize financial stability and want to avoid private mortgage insurance (PMI), which is required for lower down payments. With rising interest rates and home prices, putting more money down helps them build equity faster and reduces long-term debt, making homeownership more affordable in the long run. 

Look at Smaller Homes than Planned 

Millennials are willing to consider smaller homes than they originally planned due to affordability concerns, rising home prices, and high mortgage rates. Many prioritize financial stability and are willing to compromise on size to stay within budget while avoiding excessive debt. Additionally, they often value location, amenities, and lifestyle over square footage, opting for homes in walkable neighborhoods or near work and social hubs. Minimalist living and sustainability trends also influence their preference for smaller spaces, as they seek efficient layouts with lower maintenance and utility costs. 

Stretched Budgets 

Millennials are willing to stretch their budgets when choosing a home due to rising housing costs, limited inventory, and the desire to secure a property in competitive markets. Many see homeownership as a long-term investment and are willing to pay more upfront to avoid being priced out in the future. Factors like remote work flexibility, lifestyle preferences, and proximity to good schools or amenities make certain locations more desirable, justifying a higher budget. With mortgage rates fluctuating, some millennials choose to spend more now to lock in a home rather than wait and risk even higher costs later. 

Relocate 

Millennials are willing to relocate when choosing a home due to affordability, job opportunities, and lifestyle preferences. With rising housing costs in major cities, many seek more affordable markets where they can get more value for their money. The flexibility of remote and hybrid work has also made relocation easier, allowing them to prioritize factors like lower cost of living, better quality of life, and access to outdoor spaces. Additionally, some millennials move to be closer to family, improve work-life balance, or take advantage of state incentives such as tax benefits or first-time homebuyer programs.