Better Mortgage/Urban Institute Study Reveals Obstacles to Millennial Homeownership

Today, the Urban Institute, made possible by a grant from Better
Mortgage, has published a study on Millennial homeownership, the
results of which have broad-based consequences for both a private sector
industry trying to modernize and a public sector with antiquated
policies. Better Mortgage, a digital mortgage company trying to make
homeownership an option for more people, chose the Urban Institute to
conduct this research because of their phenomenal dedication to
elevating the debate on social and economic policy.

In this report, arguably the most definitive study of its kind,
Millennials were found to face several obstacles to homeownership
compared to previous generations, with minorities particularly impacted.
If not addressed by the mortgage lending industry, government, and civil
society, low homeownership will severely diminish the ability of
Millennials to achieve long-term financial security.

“At Better, we are committed to expanding access to home finance to all
Americans and believe it’s vitally important to understand the
challenges facing every homebuyer,” said Vishal Garg, CEO and
co-founder, Better Mortgage. “The Urban Institute findings prove our
hypothesis that Millennials are not as involved in homeownership and
unless we tackle this now they’re at risk of becoming a ‘financially
lost generation’.”

To address these issues, Better has also launched its #SpentOnRent
campaign, to mobilize a call for change and increase Millennial
homeownership. More information can be found at better.com/spentonrent.

In addition to the oft-cited obstacles such as student debt, tightened
credit standards, and the increasingly limited availability of
affordable housing in desirable cities, the report explains how the
unique demographic and socioeconomic characteristics of Millennials, as
well as this generation’s shifting attitudes towards homeownership
itself, have led to an overall low rate of homeownership, when compared
to previous generations.

Key findings from the report include:

Millennials currently represent the largest generation in U.S. history,
yet demonstrate lower homeownership rates than the previous two
generations. Using industry data, the report offers a detailed analysis
of the primary factors leading to this disparity, along with
recommendations for how these issues can be mitigated in both the public
and private sector. These factors include how Millennials often live in
high-cost cities where the housing supply is inelastic. Millennials are
also more likely to delay marriage and have children. Notably, race and
parental ownership also play significant roles in the likelihood of a
Millennial owning a home.

Based on the report’s findings, The Urban Institute has outlined the
following policy recommendations to improve Millennial homeownership
rates:

Better Mortgage plans to use the findings contained within this report
to advocate for more extensive changes within the private and public
sector, offering a call to action to its fellow lenders, elected
officials, and policymakers.

“The private sector needs to play a more active role in advocating for
change, rather than waiting for inventory to free up or the rate
environment to shift,” added Garg. “We will continue to work with public
officials and institutions to discuss policy recommendations, and we
call on private institutions to join us in educating the public and
confronting issues, like financial discrimination, head on.”

Click here
to download the full report.

About Better Mortgage

Launched in 2016, Better.com is
a full stack mortgage lender digitizing every step of the home financing
process to make homeownership more affordable and accessible. Backed by
Kleiner Perkins, Goldman Sachs, and Pinebrook, Better is focused on
customer advocacy, putting consumers back in control of the most
important financial decision of their lives. Recently named Best
Mortgage Lender for Customer Service by Nerdwallet, Better has an
intuitive online platform, complemented by non-commissioned staff that
guide customers through the process, starting with how much house they
can afford or how much they can save through to close, completely
jargon-free with airtight certainty and the best rate possible. For more
information, follow us on Facebook, Twitter and LinkedIn.

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