Millennials Willing to Sacrifice Starbucks Visits, Cable TV To Finance Home Purchase

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Collingwood Group Survey also finds “Generation Y” more traditional than many think.

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The mortgage industry must figure out ways to be more efficient and streamline operations to reduce costs

A majority of millennials (ages 24-34) are willing to sacrifice modern day conveniences like cell phones, internet, cable and Starbucks in order to save for a down payment on a home. A new survey from the Collingwood Group shows 65% of millennials polled are somewhat to very likely to give up on at least one of the above to finance a home purchase.

But when it comes to financing their first homes millennials (also known as “generation Y”) think more like their parents. The Collingwood Group survey finds close to 75% of millennials would be more comfortable applying for a mortgage with a traditional bank over an alternative lender.

And despite the millennial generation’s internet focus, they are not willing to pay more for a streamlined, online mortgage process. Interestingly, if millennials had already gone through the mortgage application process, they were slightly more inclined to pay more for a more streamlined process (23% vs 21%).

Instead, just like previous generations it’s the cost that matters most to them.

The Collingwood Group exclusive survey further questions perceptions that millennials prefer city life with close to 70% of those surveyed saying they prefer buying their first home in the suburbs.

The Colllingwood Group Chairman Tim Rood says, “It’s fascinating that millennials want to live in the city while they're single but want the American Dream of white picket fences and yards when they are ready to buy, according to our exclusive poll. That is so critical given the ambiguity and fear that millennials will get hooked on urban conveniences and abandon the suburbs, leaving baby boomers and other downsizing households in the lurch.”

He adds, “The data on millennials that own their home (23%) who would pay more for a better process is also notable. On the most expensive purchase of their lives they are willing to pay more because the current process is so God awful.” Rood notes, “Price matters to millennials who have lower incomes and more debt and the mortgage industry MUST figure out ways to become more efficient and streamline operations to reduce costs. The whole process is clearly ripe for disruption.”

The poll was conducted July 5-8, 2015 among a random group of 650 people. The Collingwood Group also published an infographic that includes the full results of the survey,

About the Collingwood Group

The Collingwood Group is a Washington, D.C. based business advisory firm.
It was founded on a single idea: To help clients grow and protect their businesses.”
The team includes the former head of FHA, the former head of Ginnie Mae, and additional partners who have held senior leadership positions in HUD, Fannie Mae, Freddie Mac, and other major financial services organizations. Clients range from the Fortune 50 to small and mid-size businesses, with a strong concentration in financial services and technologies. Services include: identifying and securing business opportunities with the federal government and the GSEs; helping financial services companies comply with, interpret and operate effectively within the ever-changing regulatory environment; and working directly with CEOs and boards of directors to help increase market share and profitability.

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Margaret Mooney
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