Apartment List recently conducted a survey of more than 30,000 renters across the United States, asking questions about their plans for homeownership, affordability and saving for a down payment.
Our research indicates that the vast majority of millennial renters (79 percent) want to purchase a home, but that affordability is the biggest obstacle that they face. You can see our national report (with data for 93 metros and 130 U.S. cities) at this link.
Today, we dive into the results for the DC metro specifically.
Most DC millennials plan to purchase a home soon…ish
In the Washington, D.C. metro, 81 percent of survey respondents do want to purchase a home. Of these, the majority (33 percent) intend to buy a home within the next three to five years.
The next largest groups (21 percent) are planning to purchase in 2-3 years as well as 5 or more years from now. This is on par with the rest of the nation, where 32 percent of millennial renters plan to buy a home within the next 3-5 years as well.
Affordability poses the biggest obstacle to homeownership
The biggest obstacle for DC millennials wanting to buy a home is affordability, with 74 percent of respondents listing it as a reason for delaying homeownership.
In contrast, only 45 percent said that they were not ready to settle down, and 41 percent were waiting to be married. For those who expect to always rent in the DC metro, affordability was the no. 1 reason they said they would do so.
DC millennials underestimate down payment costs
To compare millennial expectations for the cost of a down payment with reality, we asked them how much they expected to need for their own down payment.
The median price of a 20 percent down payment for a starter home in the Washington, DC metro is $39,990; and the average millennial expectation of how much they need for a down payment is $31,420 – a difference of 27 percent.
This is unsurprising, given that most of the nation’s millennials tend to underestimate the cost of a down payment as well.
Millennial homebuyers in DC need nearly 12 years to save
In order to determine how long millennial renters will need to save for a down payment, we also asked them the following questions:
- How much have you saved for a down payment so far?
- How much help (e.g., from family) will you be receiving for a down payment?
- How much of your monthly income do you put towards saving for a down payment?
This allowed us to estimate how many years it will take them to save enough for a 20 percent down payment on a home. At the current savings rate in Washington DC, it will take millennial homebuyers a little over a decade, about 11.9 years, to save up enough for a down payment.
This compares to 9.1 years in Baltimore, 10.4 years in New York, and 10.1 years in Boston.
Living in the Washington DC metro is no joke when it comes to prices, and the same is true for buying a home. Millennials in Washington DC are on track with the rest of the nation when it comes to their planned timing in buying a first home, and they tend to underestimate their down payment cost, also similar to the rest of the nation.
The question of whether or not millennials in DC will be actually able to purchase a home in the amount of time that they hope to do so, remains to be answered.
Yuki Graviet Knapp is a Content Marketing Associate with the Growth Team at Apartment List and is a resident of the Bay Area.