Despite the popular belief that millennials — those born between 1982 and 2004 — prefer living in dense, walkable, urban settings, a recent nationwide survey found that 80 percent of millennial renters want to purchase a house or condominium. What’s stopping them? Quite a few factors stand in their way, as it turns out. Chief among them are the high cost of living and housing, especially here in Southern California with its uber-high housing costs, student loan debt, limited job opportunities, and lackluster wages. Added together, these factors restrict millennials’ ability to save for a down payment, whether 20 percent or even 10 percent of the home cost. Based on their current rate of monthly savings, the survey, conducted by Apartment List, found that millennials in many of the nation’s large metropolitan areas will need at least a decade to save enough money for a 20 percent down payment on a condo. Millennials in Kansas City need the least time to save for a down payment, five and a half years. Those in San Francisco, San Diego, Los Angeles, and Austin each face a wait of at least 19 years. San Jose is the metropolitan area with the longest wait time, almost 24 years. Based on their current wage and saving realities, millennials there wouldn’t be able to afford a 20 percent downpayment on a condo until 2041. Even when the survey considered a smaller down payment of 10 percent, only about one in three millennials was likely to save the required amount in five years or less. Similarly, the study found that nationwide, two-thirds of the age group had saved only $1,000 for a down payment. Forty-four percent say they haven’t saved a penny. Interestingly, the study also found that Asian-American respondents were the ethnic group most likely to have $10,000 or more saved for a down payment and were also found to be saving as much as $600 a month toward their goal. Of those millennial respondents who plan to purchase a home in the future, some 72 percent said affordability is the primary obstacle, slightly down from 77 percent in last year’s survey. Almost half said they are not ready to settle down, while about one of three respondents, or 36 percent, said they are waiting to get married. Among renters who do not plan to buy, the most popular reason, among 58 percent of respondents, is that they enjoy the flexibility of renting. However, nearly as many, 56 percent, cite a more salient reason to keep renting — affordability. Down payment assistance options Saving enough money for a down payment on a first home in Southern California may seem insurmountable. While many prospective local buyers ultimately may need help with the down payment from family, there are alternatives, including programs that few consumers even consider. Here are a few: • Down payment assistance—Depending on a buyer’s credit score and income, they could qualify for one of over 2,200 down-payment assistance programs nationwide. These programs offer low interest rate loans, grants, and tax credits. Homebuyers who use these programs may still need to make a down payment, but nationally they save an average of $5,965 upfront and $11,801 in monthly house payments over the life of the loan. For details, check the Department of Housing and Urban Development website, use Bank of America’s recently launched Down payment Resource Center, which offers a database of locally available programs, or go to downpaymentresource.com. • Credit unions — These nonprofit banking cooperatives often offer mortgages to members requiring a low down payment, or none at all. To qualify, the borrower will typically need a good credit score and earn less than 80 percent of the area’s median income, but those requirements vary widely. • VA loan — The U.S. Department of Veterans Affairs’ loan program has its roots in the Servicemen’s Readjustment Act of 1944, better known as the G.I. Bill. It gives active or retired military personnel, or a veteran’s surviving spouse, the chance to buy a home with no money down. VA loans also offer attractive interest rates, because they’re not based on a borrower’s credit score. If the borrower qualifies, a VA loan is often the best mortgage option. • Navy Federal loan — The Navy Federal Credit Union offers 100 percent financing to qualified members. Eligibility is restricted to members of the Department of Defense and Coast Guard active-duty, civilian, and contractor personnel and their families. A Navy Federal mortgage is almost identical to a VA loan, with the main difference being that Navy loans have slightly higher interest rates. Marty Kovacs is the 2017 Chairman of the Santa Clarita Valley Division of the 9,600-member Southland Regional Association of Realtors. David Walker, of Walker Associates, co-authors articles for SRAR. The column represents SRAR’s views and not necessarily those of The Signal. The column contains general information about the real estate market and is not intended to replace advice from your Realtor or other realty related professionals.