Most millennials—69 percent—say owning a home is a huge part of their American Dream, but they find that saving money for a down payment often stands in the way of homeownership. They have to deal with crushing student debt, sky-high rents and slower income growth. Add that to the rising price of houses and lack of affordable homes and saving a down payment becomes even more daunting. Now Zillow points to another culprit that makes stashing a nest egg difficult: millennials’ taste for lavish pre-wedding destination parties.
“According to our most recent study of wedding guests and wedding party members — The Knot 2018 Wedding Guest Study — members of the wedding party spend, on average, $584 attending each bachelor or bachelorette party,” says Kristen Maxwell Cooper, The Knot editor in chief. “This price includes their costs to travel, accommodations and gifts.
“Additionally, our study found that members of the wedding party aren’t the only ones attending bachelor and bachelorette parties — in fact, one in four guests who aren’t part of the wedding party are also attending these pre-wedding parties.”
While those numbers show an increase in guests heading for destination pre-wedding festivities, the individual cost to attend dropped in the last year. The Knot’s 2016 Wedding Guest Study estimated that a destination bachelor party averaged $1,532 and $1,106 for a bachelorette party.
“Today’s couples are all about experiences, so it’s no surprise many brides and grooms-to-be (or their maids of honor and best men) are planning unforgettable trips for their pre-wedding getaways,” Maxwell Cooper says.
“As with their weddings, couples want their individual pre-wedding celebrations to be as unique as they are and a reflection of their interests and personalities, which can sometimes result in pricey bachelor and bachelorette parties.”
Zillow used those 2016 expenses to show just how much wedding partying could eat out of a house down payment. Let’s say you traveled three times a year for three years to celebrate the nuptials of friends. The Zillow study found that attending nine destination bachelorette parties in your lifetime can set you back more than $13,788. That amount in some parts of the country could total up to 35 percent of a down payment for a median-price home.
“Buying a home is one of the most expensive purchases someone will ever make, and for most first-time buyers that means years of saving money to afford a down payment,” says Jeremy Wacksman, Zillow chief marketing officer. “Attending your friends’ bachelor or bachelorette parties can be a trip of a lifetime.
“While everyone’s budget and priorities are different, big ticket expenses like vacations can add up surprisingly quickly – a lot faster than a $19 avocado toast,” he says.
“Home values have risen significantly over the past year — up 8.3 percent from June 2017 to June 2018. Saving for a down payment may feel increasingly difficult for first-time buyers,” a Zillow spokesperson says.
There are other reasons that younger homebuyers are often at a disadvantage in the housing market. “Looking by age, we’ve seen sales to younger buyers slip in 2018 while sales to buyers over 55 have trended slightly higher,” according to Danielle Hale, chief economist for realtor.com.
“Realtor.com survey data shows that in today’s competitive housing market, older buyers, who tend to have more experience and more built-up home equity, are breezing through the competition while younger buyers are having to adjust,” she says. “In fact, 77 percent of home buyers under age 35 reported making some change to their search as a result of higher home costs.”