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Millennials Are Twice as Likely as Boomers to Take out a Home Equity Loan

August 24, 2016

RIVERWOODS, Ill.--(BUSINESS WIRE)-- Older millennials, ages 30-34, who own a home are twice as likely as baby boomers, ages 55-64, to take out a home equity loan, according to a survey commissioned by Discover Home Equity Loans.

The survey reveals that of the 64 percent of older millennials who own a home, 51 percent have used a home equity loan, compared to only 26 percent of baby boomers who own a home.

“Homeowners who have built equity in their homes have the opportunity to leverage their financial asset to help them pay down debt, update their home or pay for major expenses,” said TJ Freeborn, director of operations strategy for Discover Home Equity Loans. “Home equity loans are a viable option homeowners may want to consider, especially because they offer perks like a fixed rate for the life of the loan and the potential for the interest to be tax deductible.”

Older millennials and boomers view the purpose of their homes differently. Millennials are more likely than boomers to use their home as a financial asset by selling it to make money (27 percent vs. 13 percent). While a quarter of older millennials see their home as an investment property, just seven percent of baby boomers feel the same way.

Additional survey findings include:

  • Home remodels, 45 percent, and debt consolidation, 36 percent, are the main uses of home equity loans among homeowners of all ages.
  • Older millennials as compared to boomers are much more likely to use home equity loans for emergency cash, 42 percent vs. 14 percent.
  • Millennials are more likely than boomers to use a variety of resources to determine their home’s value:
    • More millennials turn to their friends or family, 39 percent vs. 16 percent of boomers, a financial advisor, 38 percent vs. 10 percent, or go online to use a bank, financial or real estate website, 34 percent vs. 25 percent.
    • Millennials are less likely to use their realtor, 37 percent vs. 48 percent, than boomers.

About the Survey

The national survey of 1,428 consumers was commissioned by Discover Home Equity Loans and conducted by Toluna, an independent survey research firm, between March 21 - 23, 2016. The maximum margin of sampling error was ±5 percentage points with a 95 percent level of confidence.

About Discover

Discover Financial Services (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company issues the Discover card, America's cash rewards pioneer, and offers private student loans, personal loans, home equity loans, checking and savings accounts and certificates of deposit through its direct banking business. It operates the Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories. For more information, visit www.discover.com/company.

 
National Survey of 1,428 Adults
Conducted March 21-March 23, 2016 By Toluna
Margin of Sampling Error, +/- 5 percentage points with a 95% level of confidence
Commissioned by Discover Home Equity Loans
 
 

Do you own or rent your home? (Select one)

 

Total(Qualify: 30+ owned home for 3+ years)

 

Which age range do you fall within? (Select one)

    30-34   35-44   45-54   55-64   65 and over
Own   66.41%   64.14%   62.87%   63.60%   69.33%   79.51%
Rent   29.48%   31.17%   31.44%   32.80%   27.56%   18.73%
Other   4.11%   4.68%   5.69%   3.60%   3.11%   1.77%
       
                         

Now that you've been in your home for a few years, which of the following describes how you perceive your home now? (Select all that apply)

Total(Qualify: 30+ owned home for 3+ years)

Which age range do you fall within? (Select one)

    30-34   35-44   45-54   55-64   65 and over
It is an investment property   11.76%   24.73%   10.36%   10.10%   7.29%   5.69%
I am emotionally attached to it   29.97%   29.82%   27.17%   27.61%   31.94%   35.55%
It is just a temporary residence   8.33%   20.00%   9.80%   5.05%   4.51%   0.47%
I plan to live in it for many years   43.91%   34.91%   36.13%   48.82%   47.22%   57.35%
I am excited to make lasting memories in my home   28.36%   30.18%   26.33%   31.99%   29.51%   22.75%
It is a starter home until I need to expand   10.71%   25.09%   17.37%   5.39%   1.74%   0.47%
I don't love it, but it is what I can afford at this time   13.31%   18.55%   17.93%   12.46%   9.03%   5.69%
I imagine my grandchildren visiting me here one day   18.14%   22.91%   15.13%   16.84%   19.79%   16.59%
It is a house that needs many upgrades   20.80%   24.00%   22.13%   21.21%   21.53%   12.80%
It is a house I plan to sell to make money   15.13%   26.55%   15.97%   8.42%   12.50%   11.85%
None of these fit how I view my home   5.81%   2.55%   4.20%   6.06%   8.33%   9.00%
 
                         

Which of the following people and resources do you turn to for learning more about the value of your home? (Select all that apply)

Total(Qualify: 30+ owned home for 3+ years)

Which age range do you fall within? (Select one)
    30-34   35-44   45-54   55-64   65 and over
Realtor   41.60%   36.73%   36.69%   40.74%   48.26%   48.34%
Banker   22.62%   32.73%   23.25%   19.53%   22.22%   13.27%
Financial advisor   18.49%   37.82%   23.25%   10.10%   9.72%   9.00%
Friend/family   23.81%   38.91%   29.69%   18.52%   15.97%   12.32%
Print media (newspapers, magazines, etc.)   12.25%   20.36%   13.73%   7.07%   7.29%   13.27%
Online (bank, financial, or real estate websites)   28.78%   33.82%   34.73%   25.93%   25.35%   20.85%
Online media (newspapers, magazines, etc.)   14.01%   27.27%   16.81%   9.09%   8.33%   6.64%
Other   9.17%   6.55%   6.16%   14.14%   9.72%   9.95%
None of these   13.94%   4.36%   12.04%   18.18%   15.62%   21.33%
 
                         

Have you ever taken a home equity loan against your home? (Select one)

Total(Qualify: 30+ owned home for 3+ years)

Which age range do you fall within? (Select one)
    30-34   35-44   45-54   55-64   65 and over
Yes   29.83%   51.27%   29.41%   19.87%   25.69%   22.27%
No   67.51%   43.64%   66.67%   77.78%   73.61%   77.25%
Not sure   2.66%   5.09%   3.92%   2.36%   0.69%   0.47%
 
                         

How have you used a home equity loan? (Select all that apply)

Total(Qualify: 30+ owned home for 3+ years)

Which age range do you fall within? (Select one)
    30-34   35-44   45-54   55-64   65 and over
Debt consolidation   36.15%   30.50%   39.05%   52.54%   36.49%   25.53%
Home remodel   45.07%   41.13%   45.71%   44.07%   55.41%   40.43%
Pay off student debt   15.02%   26.24%   19.05%   3.39%   5.41%   2.13%
Emergency cash   27.23%   41.84%   29.52%   16.95%   13.51%   12.77%
Vacation   25.12%   43.26%   32.38%   10.17%   4.05%   6.38%
Wedding   17.37%   31.21%   19.05%   13.56%   1.35%   2.13%
Medical expenses   22.07%   36.17%   25.71%   13.56%   5.41%   8.51%
Other   14.32%   3.55%   3.81%   27.12%   22.97%   40.43%
 

Source: Discover Financial Services

Discover

Rob Weiss

224-405-6304

robertweiss@discover.com

@Discover_News