TransUnion: Millennials are eager to buy homes, but may lack sufficient credit
A pair of recent TransUnion studies found a striking gap between the desire of millennials to purchase homes and their potential access to the credit necessary to do so.
An online survey of 1,843 U.S. consumers found that more than 30 percent of millennial respondents (defined in the study as consumers ages 18-34) hoped to purchase a home within the next 12 months. The survey, which focused on consumers ages 18 and older, was conducted March 8 and 9, 2016.
A separate TransUnion analysis of more than 10 million consumer credit files found that 43 percent of millennials (defined for purposes of this second study as consumers ages 18-35) may lack sufficient credit to purchase a home. This subset of millennials had credit scores between 300 and 600 on the VantageScore scale range of 300 to 850. Potential borrowers with scores in that range are considered “subprime” credit risks, and many financial institutions are wary of lending to them.
Millennial respondents to the online survey acknowledged that their finances will impact their ability to become homeowners. When asked their primary concerns about the home-buying process, the millennials reported that they are worried about:
- having low credit scores (47 percent);
- being unable to fund a home down payment (59 percent); and/or
- failing to qualify for a low interest rate on a mortgage (56 percent).