PLANADVISER - September/October 2019 - 14

trendspotting
Millennials
Risk Savings,
To Buy Their
First Home
Though some might say
they're trading one good
investment for another
ACCORDING to survey data published
by Bankrate, Millennials, more than
any generation before them, tap into
their retirement account, live longer
with family, and sell off personal
items to finance the down payment
and closing costs for their first home.
Those measures suggest their level
of desperation, as well as the extent
of their resourcefulness. Millennial
homeowners not only report actively
saving more to buy a home than do
members of Generation X and Baby
Boomers, they also are more likely
to have drawn on retirement savings
(13%) and to have sold personal items
such as jewelry or a car (12%).
The top three reasons they need to
get creative to fulfill their home ownership
dream included inadequate income
(52%), the high cost of living (45%) and
unpaid student loan debt (23%).
Deborah Kearns, mortgage analyst
with Bankrate, says it is good to see
Millennials taking advantage of homebuyer
grants and loan assistance
programs, " but their desperation
becomes obvious when you see them
forced to sell off personal items and
tap into retirement savings at twice
the rate their parents had to. "
" Tapping into retirement savings
is a risky move, " Kearns warns. " You
might be better off looking into down-.
payment assistance programs, special
low-down-payment loan programs, or
buying a less expensive home to keep
your costs more affordable. "
A related Modern Money survey
" You might be better off looking into
down-payment assistance programs,
special low-down-payment loan programs,
or buying a less expensive home... "
by Ameriprise Financial suggests that
most investors (70%) continue to say
owning a home is as good an investment
as it was a decade ago. Yet, while
the clear majority (92%) of respondents
were homeowners, and despite many
viewing homeownership as a good
investment, financial gain was not
the primary reason they bought their
home. In fact, the top driver was that it
gives them " a sense of pride in being a
homeowner. "
With these figures in mind, Bill
Walker, chief revenue officer at Unison,
says his firm's new approach to
providing equity investment backing
to individual home buyers should be
attractive to many advisers and their
clients. Unlike with a home equity
loan, homeowners who partner with
Unison garner no added debt, monthly
payments or interest. Unison can also
help prospective home buyers, generally
by doubling their down payment.
In return, Unison shares in a portion of
the home's value when the owner sells.
Walker notes that the Millennials
in his firm's client base tend to view
housing-and especially before they
start a family-as more utilitarian
than did previous generations.
" For many young people today, a
house is a place to call home base for
all of their life's adventures, " he says.
" Young people are very open to this
idea of the shared economy. We think
our approach to making equity investments
in homes alongside individuals
falls right in line with that. "
-John Manganaro
14 | planadviser.com September-October 2019
Art by Woshibai
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PLANADVISER - September/October 2019

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