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Most young adults in Wisconsin still want to become homeowners, with 73% of residents ages 18 to 34 planning to buy a home in the next five years, a new survey by BMO Harris Bank found.

Plans for home ownership might be even higher if not for a hangover of student debt, according to a BMO Harris economist.

In all age groups, 44% of state residents expect to purchase a home in the next five years, citing four main reasons, the bank said:

■They want somewhere to call their own (73%).

■They see it as a long-term investment (72%).

■It would give them more freedom to renovate (61%).

■They would have their own yard (61%).

In metro Milwaukee, 52% of residents in all age groups expect to buy a home within the next five years, the survey found.

"It's encouraging to see this level of confidence in the local housing market," said Lori Day, BMO Harris Bank's director of mortgage sales for Wisconsin. "Moreover, the majority of young people are looking to make a purchase in the next few years — and in many cases it will be their first time. It's an important life stage, and there are a lot of factors to consider, not the least of which is financing."

The survey found that 14% of those purchasing a home in the next five years will be buying for the first time.

The percentage might actually be higher if not for student debt.

"While the housing market is on the upswing, the record level of student debt carried by young Americans does pose a challenge to many in their 20s and 30s hoping to purchase their first home," said Michael Gregory, head of U.S. economics for BMO Capital Markets. "Student debt levels have more than doubled in the last seven years to $1.1 trillion. The financial burden means renters are delaying entering the purchasing market, which has a trickle-down effect on the overall housing recovery."

Distribution of student debt

The survey numbers in Wisconsin generally tracked with the findings for the U.S.

About 74% of American millennials said they plan to buy a home in the next five years. Most people in that 18-to-34 age group expect to take the plunge within the next two years — 39% in Wisconsin and 45% nationally, according to the survey.

Russell Kashian, a University of Wisconsin-Whitewater economics professor, said the bank's survey results seem reasonable.

Although there is concern about slower new-household formation acting as a drag on the housing industry, he said he doesn't think young adults will be long-term renters.

"It's a misinterpretation of history to state that the buying habits of the millennials will be dramatically different than the prior three generations in America," Kashian said.

Kashian said student debt is an issue, but "it's not evenly distributed across all millennials."

"I think that there's a lot of people with a lot of debt, but there are probably a lot of people with very little debt," he said.

The BMO Harris Bank results are from a Pollara survey commissioned by the bank using interviews with an online sample of 2,500 Americans, including 250 from across Wisconsin.

It was conducted from April 1-7. The bank said the margin of error for a sample of 2,500 is plus or minus 1.96%, and for a sample of 250, it's plus or minus 6.2%.

According to the study, 70% of Wisconsin residents currently own their home and the other 30% rent.

Nationally, 12% of renters said they never intend to buy.

The top three reasons cited by people in Wisconsin for renting rather than owning were financial instability (60%), less upkeep and maintenance (60%) and difficulty finding affordable homes in desired neighborhoods (23%).