San Diego-based financial advisor Dana Parker said, "Many millennials believe they are unable to afford homes, when, in actuality, many of them are unaware of the different financing options that exist at credit unions." In reality, she said, there are many alternatives to purchasing a home with 20% down, and about 30% of all homebuyers put down 3% or less on the cost of the home.

Millennials' down payments averaged just 7%, and they were the most likely to say student debt was delaying saving up for a down payment. However, the median amount of student debt held by Generation X was $28,000, actually higher than the $25,000 millennial average.

Other major concerns causing millennials to delay homeownership included credit scores and debt-to-income ratios. While credit scores remain strict in the post-housing crisis era, they are starting to ease, and debt-to-income ratios are actually at healthy levels. Many college-educated 25 to 34-year-olds are making enough money to comfortably cover the cost of the median mortgage. Even those with student loan debt may be able to refinance their loans at a better rate or qualify for income-based repayment.

 "I make enough money to afford a house, which really surprises my parents," said Noah Sherman, 25, of San Jose, CA. "But I still have student loans to pay off, and I work for a start-up, so things could go south. That being said, I am looking to buy in the next year or so when I can move from the Bay Area."

Another twist in the home-buying habits of millennials is that they are moving from big cities to urban areas to purchase their first homes.

Over the past decade, the homeownership rate among young adults fell in all but one of America's 25 largest cities. In Boston, it remained unchanged at 16%. In several cities, including Portland, Denver and San Jose, it fell by more than 10%.

Affordability is the bottom line for these young adults. In eight of the top 10 cities where the homeownership rate among young adults has increased the most in the past decade, the median home value is lower than the national median.

Furthermore, Florida and Texas are top states for millennial homeownership. These southern states both place two cities among the top 10, according to the U.S. Census Bureau.

"My friends all talk about buying houses, but we are afraid the economy will sink again and we will be in the same situation as our parents," said Sherman. "We might have been kids when the recession hit, but we remember. It's made us a little hesitant about buying a home."