Expectations vs. Reality Gap

The Expectations vs. Reality Gap is huge when it come to millennials desire to own a home.

In a nationwide survey of nearly 7,000 prospective homebuyers, Point2 found that 74% of the Millennials who are interested in purchasing a home would like to do so in the next 12 months. However, 88% of respondents between 25 and 40 years old have significantly less in savings than the average national down payment amount, which is $62,600. Moreover, 14% of the Millennials surveyed stated that they hadn’t managed to set aside anything at all, meaning that the desire to buy a home might be in conflict with Gen Y’s budgetary realities.

Time Needed to Save a Down Payment

Time Needed for Down Payment in 100 Largest Cities

Click on the above link for an interactive graph of cities.

Assuming a saving rate of 8% and a 20% down payment, in Austin it would take 11.8 years to save a down payment, Chicago, 9.6 years, Denver 12.8 years, Los Angeles 25 years, San Francisco 18.3 years.

Budget Realities

  • Most Millennials tend to greatly underestimate the amount of money they will need for a down payment.
  • The national average down payment is about $62,000, but 40% of Millennials expect it to be less than $10,000. What’s more, 61% of young people have less than $10,000 in savings. Of those, 14% have no savings at all.
  • The average savings rate in the last decade was 8%. And, although personal savings went through the roof in April (reaching 33.7%) one month of extraordinary budgeting may not move the needle.
  • Considering savings rates, median incomes and median home prices, the time needed to save for a 20% down payment in the 100 largest U.S. cities varies significantly: from 10 years in Los Angeles and around nine years in Long Beach and


Clearcover

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Adults in their twenties and thirties are now facing the same financial responsibilities their parents once did as they become homeowners, car owners, and insurance holders. While these financial matters can seem complicated, millennial adults have the added benefit of improved mobile apps to simplify banking, money transfers, and now, auto insurance.

Clearcover Car Insurance offers just that: clear, comprehensive, and affordable auto coverage at a better price than its competitors. “Clear” also describes how easy it is to use Clearcover’s digital platform: everything from purchasing your policy to managing an insurance claim can be done through their user-friendly mobile app.

Clearcover simply designed an app that makes sense to millennials: these days, there’s no need for in-person agents and phone calls when we do pretty much everything from our smartphones. And if you can do something that’s easier and a better value, it doesn’t make sense to pay for a price markup just for an insurance agent.

Mobile apps that allow users to make their own educated financial decisions aren’t so new: Robinhood makes stock market investment simple by allowing you to invest directly in the market through a mobile app. That strategy works for this generation of adults: Robinhood has over 2 million views in Apple’s App Store, and it enjoys a 4.8-star rating. Similarly, Clearcover enjoys 4.7 stars from nearly 1,000 satisfied customers in the Apple App Store. Over and over, user reviews describe Clearcover as “the best insurance ever”, with user Sobhan H. saying, “I am honestly really surprised to see that Clearcover is not the #1

The U.S. real estate market is topsy-turvy in the pandemic economy. There are fewer homes for sale than usual, and more competition. Prices are up in most markets, yet slipping in others. How do millennials, with their growing families and increasing housing needs, fit into this confusing picture?

A new survey by Point2, a real estate search site, asked 6,780 millennials (ages 25 to 40) about their buying plans. The results suggest the largest generation is woefully unprepared for homeownership.

While 74 percent of millennials surveyed indicated they wanted to buy a home with a year, about 88 percent of them didn’t have enough saved to make the average U.S. down payment, about $62,000. In fact, 14 percent reported no savings at all.

Roughly 40 percent estimated they’d need $10,000 or less to put down on a home. In reality, among the 100 largest U.S. cities, only in Detroit would $10,000 be enough for a standard 20 percent down payment on a median-priced home. In San Francisco, at the other end of the scale, the down payment required is more than 20 times than in Detroit, about $218,000.

Given that the typical U.S. household historically saves 8 percent of its income, millennials need to buckle down, if they can afford it, and save more. A possible glimmer of hope: Americans of all ages have begun to put some money away during the pandemic. In April the average savings rate catapulted to almost 34 percent of income, though it dropped to about 14 percent by August, according to the U.S. Department of Commerce.

This week’s chart, based on Point2’s survey, shows the top and bottom 10 cities among the 100 largest in the U.S., ranked by median home price, and how long it would take millennials to save for a down

As a generation, millennials have been hit hard financially by the coronavirus pandemic. But although some may have moved back in with their parents or say the pandemic has upended their financial security, they’re also the generation that’s giving back the most. 



a group of people standing in front of a building: The Salvation Army volunteers hand food and face masks to people in need in Chelsea as the city continues re-opening following restrictions imposed to slow the spread of coronavirus on September 24, 2020 in New York City.


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The Salvation Army volunteers hand food and face masks to people in need in Chelsea as the city continues re-opening following restrictions imposed to slow the spread of coronavirus on September 24, 2020 in New York City.

Nearly 3 out of 4 millennials (defined here as those ages 25 to 34) have sent some kind of financial aid to family or friends or donated to a nonprofit since the Covid-19 pandemic began, according to payment app Zelle’s September Consumer Payment Behaviors report. The report is based on a survey of over 600 interviews a month of adults ages 18 to 72.

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That’s the highest rate among any of the generations polled. Gen Z (ages 18 to 24) had the second highest giving rate at 66%, followed by Gen X (ages 35 to 54) and baby boomers (ages 55 to 72). 

Overall, 64% of Americans say they’ve sent sent financial aid at least once since the start of the pandemic, Zelle’s report finds. In fact, there’s been over $11.9 billion donated globally to Covid-19 related causes during the first half of 2020, according to an August report by Candid and the Center for Disaster Philanthropy, which tracks global philanthropic activity. 



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Finding the right place to give

If you have extra money in your budget and want to donate, whether it’s to cause that’s related to the pandemic or one that’s focused on broader issues such as the environment or social justice, it’s all about finding the right place. And

As a generation, millennials have been hit hard financially by the coronavirus pandemic. But although some may have moved back in with their parents or say the pandemic has upended their financial security, they’re also the generation that’s giving back the most. 

Nearly 3 out of 4 millennials (defined here as those ages 25 to 34) have sent some kind of financial aid to family or friends or donated to a nonprofit since the Covid-19 pandemic began, according to payment app Zelle’s September Consumer Payment Behaviors report. The report is based on a survey of over 600 interviews a month of adults ages 18 to 72.

That’s the highest rate among any of the generations polled. Gen Z (ages 18 to 24) had the second highest giving rate at 66%, followed by Gen X (ages 35 to 54) and baby boomers (ages 55 to 72). 

Overall, 64% of Americans say they’ve sent sent financial aid at least once since the start of the pandemic, Zelle’s report finds. In fact, there’s been over $11.9 billion donated globally to Covid-19 related causes during the first half of 2020, according to an August report by Candid and the Center for Disaster Philanthropy, which tracks global philanthropic activity. 

Finding the right place to give

If you have extra money in your budget and want to donate, whether it’s to cause that’s related to the pandemic or one that’s focused on broader issues such as the environment or social justice, it’s all about finding the right place. And that’s different for everyone, says Eric Roberge, a certified financial planner and founder of Boston-based wealth management firm Beyond Your Hammock.

“Find that cause where you can make the most impact, whether that’s giving some money directly to another individual or it’s going through a nonprofit or