Millennials Are Tired of Renting

If it seems like millennials are slow to jump into homeownership, it is because they are.

Millennials are renting homes for longer than the generations before them. And not because they don’t see the value in owning a home. Quite the contrary. They are just as interested in buying a home as any other generation, they just have concerns.

Millennials Want to Own Homes

Millennials understand the financial advantages of owning a home over renting, as well as the benefits that come with it, like having their own space, privacy, and security. In fact, the number of millennials who are poised to make the leap into homeownership may be larger than we think, they just haven’t pulled the trigger yet. Their fears over the feasibility of home ownership may loom larger than the reality. They just may need convincing they can leap over the hurdles that keep them from turning in the keys to their rental.

Why Millennials Are Delaying Home Ownership

Even though this younger generation may realize that owning a home makes more financial sense than renting, they don’t they have the fiscal strength to make the commitment, yet. And their primary concerns are around their credit score, ability to pay the down payment, closing costs, monthly payments, and their overall debt load.

Credit Score

There are a number of factors that go into calculating a credit score. And generally, low income and high debt do not a favorable credit score make. Which is why so many millennials are still renting. But there are some things they can do to turn it around, including paying down debt—especially credit card debt—and saving as much as possible for a down payment.

Down Payment and Closing Costs

The largest worry on the minds of millennials is that they won’t have enough money for the down payment and closing costs. It’s a valid concern. And unless the money is gifted, there are only two ways to come up with it: earn more or spend less.

But if the concern is that a 20% down payment is necessary to land a house deal, they should know there are other options available. FHA loans may only require 3.5% down, as long as certain eligibility requirements are met. A lender will be able to go over the requirements and determine if this is a viable option.

Monthly Payments

The second largest reason millennials are holding off on buying a home is because they believe they will be unable to afford the monthly mortgage payments. But rent payments often aren’t much less than first-time home mortgage payments.

The key is to set a realistic budget. When setting a housing budget to determine how much home is affordable for a first-time home buyer, there is more to consider than just the home itself. Taxes and insurance also need to be factored in, as well as other debt. Banks will determine how much they will be willing to lend, based on a debt-to-income calculation, which considers overall debt payments to arrive at an affordable loan amount.


It is no secret many millennials are drowning in debt thanks to student loans and credit cards. Add a low-paying job to the mix and it is no wonder home ownership dreams are getting dashed. But millennials aren’t the only generation to run into this roadblock. It can be done and there are options.

The debt-to-income ratio may get in the way of buying a dream home, but it will also be the most helpful tool to shine the light exactly where the focus needs to be to get finances in order for such a large purchase.

It is possible to combine many debt payments into one payment through debt consolidation, resulting in a lower monthly payment. Lower payments each month may favorably affect the debt-to-income ratio, making a mortgage payment more affordable. Not only can debt consolidation result in lower monthly payments, but it can oftentimes offer interest rates that are lower than credit card rates. Another win.

Home Ownership Is a Reality for Millennials

With so many millennials on the brink of saying farewell to renting and hello to home ownership, more and more will be making the jump any day now. Even if they think they aren’t ready because of concerns over their credit score, down payment, mortgage payments, and their existing debt loads, these aren’t unsurmountable obstacles to enjoying the freedom and pride that comes with home ownership.

If you are one of the many millennials who are ready to move on from renting and enjoy the perks of home ownership, contact us at Galaxy Lending. Our professional lenders will be happy to work with you to help improve your credit score, offer a mortgage loan solution that works for you, and review your debt consolidation options.