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Millennials Need a Decade to Save for a Down Payment, Says Study

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In major markets, many aspiring young homeowners drastically underestimate how much they need to save

It's not news that millennials are having a rough time with homeownership, but a new report from Apartment List has put those problems into stark relief. After surveying 30,000 renters across the country, researchers found that though most millennials want to buy a home, they just can't afford to.

Many millennials dramatically underestimate the amount of money they'll need for a down payment, according to the study, sometimes by as much as 50 percent. Bay Area expectations were the most unrealistic overall, with renters estimating down payments of $69,650 on average for a starter home when the reality is closer to $142,800.

The study also found that at their current saving rates, many millennial renters in big markets would need to save for least a decade before they could afford to make a down payment on a home. Almost forty percent of the millennials surveyed haven't even started putting money away. This delay has many potential consequences, such as pushing potential buyers towards risky mortgages and high debt-to-income levels, delaying decisions like marriage and having children.

Aspiring homeowners without savings could always move to Detroit — you might only need $3,590 for a down payment there.

The Affordability Crisis: Are Millennials Destined to be Renters? [Apartment List]

Millennials Have Crisis in Confidence Over Homeownership [Curbed]