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Is Fear of Commitment Delaying Millennial Homeownership?

Much hand-wringing has occurred over the fact that millennials are putting off what used to be one of the main achievements of adult life: buying a home. This ownership-interruptus has been attributed to everything from fast-rising home prices to towering student loan debt to the ultrastrict credit requirements to score a mortgage.

But it might have a lot to do with their fear of commitment as well, suggests one study.

About 20% of those between the ages of 18 and 34 are likely to be afraid of the long-term obligation (30 years, for the full term of a typical mortgage) that buying a home with a partner represents, according to a recent NerdWallet survey. That broke down to about 34% of young men and, not surprisingly, just 10% of young women.

Meanwhile, only 4% of respondents ages 35 and older harbored the same fear, according to the survey. NerdWallet, a personal finance website, commissioned the survey of more than 2,000 adults, including nearly 1,300 homeowners.

“Home buying is a pretty big commitment. For most folks, it’s probably going to be one of the biggest purchases they’re ever going to make in their financial lives,” says Chris Ling, NerdWallet’s head of home buying and mortgages. “It’s not as simple as if you split up, one person can stop paying” the mortgage.

That may be a factor in why homeownership rates dropped to its lowest levels since 1965, at just 62.9%, in the second quarter of 2016, according to the U.S. Census Bureau’s Housing Vacancy Survey. Just 34.1% of millennials owned the deeds to their abodes—down from 39% in the second quarter of 2010, according to the survey, which looked only at 2010 to 2016 data.

But commitment wasn’t the only thing survey respondents were scared about. About 71% of participants of all ages expressed other concerns ranging from the home needing repairs, their not having enough money left over for other expenses, and the sheer magnitude of the financial commitment of becoming a homeowner.

And more than half of millennial buyers having trouble saving up for a down payment blamed student debt, according to a National Association of Realtors® report looking at housing data from July 2014 through June 2015.

Buying with a partner can ease some of the (financial) pressure of coming up with a down payment.

But whether a buyer is single or with a partner, saving up for that large initial payment, which can run from 3% to more than 20% of the cost of a home, is no easy feat. The average buyer deposited about $1,078.50 a month into a nest egg for three years to afford the purchase, according to the survey.

Some good news: Millennials are proving to be a bit better at saving than Generation Xers. About 42% of them were diligent savers—compared with 29% of those ages 35 to 54.

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