Home insurers should take note: the COVID-19 pandemic has apparently helped to dampen home ownership plans for U.S. millennials, according to a new Legal & General Study looking at the market sector.
Among the study findings: nearly half of U.S. millennials said that COVID-19 negatively affected their home buying plans. Twelve percent said they completely abandoned their home ownership plans because of the pandemic, and a whopping 61 percent of those already saving for a down payment said COVID canceled or delayed plans to buy a home.
As well, 36 percent of millennial parents and those already saving for a home want to move to smaller places due to the pandemic.
“Our data shows that COVID has shifted perceptions among millennials about possible places to live,” Legal & General summarized in its study. The report noted that a quarter of respondents are living with family or friends while they try to figure out what’s next. The pandemic-related housing scarcity was particularly discouraging for long-term plans.
“Many millennials were so disheartened by pandemic-driven housing scarcity that they completely abandoned the idea of homeownership,” Legal & General noted. The study also pointed out that while 12 percent of millennials overall abandoned home ownership plans due to the pandemic, that number jumped to 27 percent when applied to millennials who live in suburban areas.
“With housing prices and scarcity reaching impossible peaks during the shutdowns, many potential homebuyers gave up hope,” the study authors commented.
Still, COVID aggravated housing trends rather than causing them, the study pointed out, noting that many millennials surveyed said the pandemic was one more obstacle of many that has made buying a home particularly hard.
Other factors that served as a barrier to homeownership have included the stock market crash in 2008, the student loan crisis, the rapid cost-of living increases that haven’t kept pace with wages, and even social just riots in major cities, according to the study.
That said, Legal & General said its research showed as of April and May 2021 that COVID-19 had “strongly affected” millennials’ home buying plans.
Legal & General’s study focused on figuring out millennials’ attitudes to homeownership, as well as the drivers and barriers they faced. The survey focused on 875 millennials based in the U.S. who don’t yet own property. It was conducted from March through April 2021, well before the Delta COVID variant took hold in the United States.
The full study is “Legal & General U.S. Housing Study.”
Source: Legal & General