Millennials want a house soon, but some buying into purchase myths

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Millennials are targeting homeownership within the next few years, but many are buying into certain house-purchasing myths, according to Bank of America.

About 38% of first-time homebuyers plan to purchase in the next two years, while 36% hope to buy a house within the next three to five, according to Bank of America's Homebuyer Insights Report. Still, a knowledge gap exists among renters.

Nearly half of millennial renters believe a 20% down payment is required to buy a home and 43% think they must pay private mortgage insurance if they don't put 20% down. About 24% think they need to have a perfect credit score to be considered for a mortgage.

These misperceptions present an opportunity for lenders to leverage tools and programs to educate first-time purchasers on the home buying process, especially being that millennials are eager to enter the market.

Nearly three-quarters of millennials cite homeownership as a top goal, and are prioritizing it over marriage and having children. Interestingly, 90% would rather pay more for a preferred location than to purchase a property elsewhere at a lower value.

About 45% of first-time homebuyers are planning to stay in their current neighborhood, an opportunity for lenders to target local renters.

"Younger generations tell us that owning a home has become a milestone that defines their success, and it's promising to see them aspiring to homeownership," Steve Boland, head of consumer lending at Bank of America, said in a press release.

"We're helping them look at their full financial picture, save early, and understand the tools available to them so they can buy knowing they're able to balance their home and other priorities far into the future," he said.

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Purchase First time home buyers Down payments Housing market Credit scores Bank of America