Millennial homeowners make up 43 percent of new home buyers, moving into the market at a later age than prior generations. However, homeownership has been more stressful, expensive and disappointing than Millennials could have anticipated.
In a survey, 63 percent of Millennial homeowners expressed regret in purchasing their home, many citing that they felt hurried into their purchase. Once they’ve purchased the home, they often realize – too late – that their mortgage is eating up an outsized portion of their income or have seen their job prospects shrink because they are limited to the area in which they have invested in a home. Millennials also have expressed regret because the house is smaller than their growing family needs or has other undesirable features, such as needing extensive renovations, a noisy neighborhood or expensive or overwhelming upkeep.
Many first-time homeowners underestimate the cost of owning a home, looking at only the cost of the mortgage and not considering taxes, maintenance or insurance. Scott McGillivray of HGTV Canada warns those considering purchasing over renting that one of the biggest drawbacks of owning a home is that homeowners can’t rely on a landlord to fix a leaky roof or malfunctioning furnace.
Canadian Millennial homeowners said that owning a home was too expensive – 63 percent say the combination of their mortgage and costs associated with owning a home make them cash poor, 57 percent said that rising interest will make it difficult for them to pay their mortgage and more than a third said renting is better than homeownership. A whopping 75 percent feel that homeownership has downsides. Two-thirds of Millennials would like to get out from under the cost of homeownership by selling their homes. However, many feel stuck with their current homes – 54 percent of those surveyed said they anticipated that home costs would continue to rise.
Homeowners spend, on average, more than $2,600 annually on home maintenance and repairs. Experts recommend that first-time homeowners put aside 5 to 10 percent of their income for the hidden costs of homeownership.
Fixer-uppers are popular because the shortage in the housing market means these homes more frequently fall into Millennials’ price range, but they may need more extensive infrastructure repairs.
It’s been estimated that 68 percent of those Millennials looking to buy a home are going to be first-time buyers, and they don’t have a lot of home repair experience – nearly half are uncertain whether they could reset a circuit breaker, a third couldn’t unclog a toilet or sink and more than 60 percent couldn’t restart a stopped furnace. In fact, many Millennial homeowners don’t own common tools – nearly a third said they didn’t own a hammer and nearly half don’t own a cordless drill.
More than 60 percent of Millennial homeowners point to a desire for more family time as a reason for less investment in DIY prowess and acknowledged that home systems are becoming more complex, requiring expert, trained contractors to repair. This lack of knowledge may also be because Millennials simply aren’t interested – more than 50 percent prefer to hire a contractor for home maintenance.
A licensed, bonded and local contractor is always the safest bet – not only do they have the necessary skills and knowledge to do the repair correctly, but they will perform work to local code requirements and file for all the appropriate permits. This is important, because any work not permitted or done to code may not be safe and need to be re-done, costing homeowners more time and money in the long run. Licensed contractors also have insurance, which protects homeowners against any personal injury or property damage that may occur during the repair or renovation.
Service Line Warranties of Canada (SLWC) can provide both expert contractors and a shield from the stress of a financial shock to Millennial homeowners in your community. SLWC has partnered with dozens of municipalities to educate residents about their service line responsibilities at no cost to partners.
Through these partnerships, SLWC offers optional emergency home repair plans including water and sewer service lines, interior plumbing and drainage, interior electric, water heaters and HVAC systems. Our award-winning call center has live operators 24/7/365 and a network of thoroughly vetted, licensed and insured contractors.
To find out how we can bring your residents – Millennial homeowners and otherwise – peace of mind, contact us.