UPDATED: May 31, 2023
There are over 72 million millennials in the U.S., making them the most populous generation in the nation. As they reach their 30s and 40s, many are starting their home buying journey.
Since housing prices increased with the pandemic and millennials continue to grapple with financial instability, buying a home isn’t exactly easy. Even so, the rate of millennial homeownership increased by almost 5% from 2019 – 2020.
This begs the question: What does the future hold for millennial homeowners? We provide a full breakdown of the most important millennial home buying statistics and trends below.
Key Takeaways
47.9% of millennials own homes as of 2020, according to data from the U.S. Census Bureau.
We found that older millennials are more likely to own a home, while the overall share of millennials planning to purchase a home is going up.
While millennial homeownership is trending upward, it still doesn’t match the homeownership rates of Generation X and baby boomers. This is likely a result of the competitive housing market that followed the COVID-19 pandemic.
To better understand the home buying trends of millennials, we can compare them with previous generations.
When we look at generational home buying trends, we see that younger generations have higher rates of first-time homeownership.
Since baby boomers have been around the longest, it’s no surprise that they’re more likely to have owned a home in the past.
Almost one-third of millennials were saving to purchase homes as of 2020, more than tripling the rate of baby boomers. This corresponds to the fact that more millennials are becoming first-time homeowners.
The majority of baby boomers don’t expect or plan to become homeowners, while only about one-tenth of millennials feel the same.
Generation Z’s median home purchase price was 5% higher than that of millennials.
As of 2019, the median home purchase price for baby boomers was almost $100,000 more than the price for millennials.
While there are more millennial homeowners than ever, financial issues such as debt and a lack of savings pose challenges for homeownership in this generation.
This means that millennials have to continue to rent – or buy cheaper homes.
Expensive housing prices and a lack of established credit history were major obstacles that stood in the way of millennial home buyers.
Millennial home buyers gravitated toward cheaper states with a low cost of living in 2019. States with a higher cost of living such as New York and California had the lowest rates of millennial homeowners.
“The future of home buying may be difficult for millennials due to the limited house supply in urban areas,” says Eric Nilsson, CEO at Rentola. “As a result, they are more likely to settle in underdeveloped areas where the prices are comparably affordable.”
The demographics of millennials has a significant impact on their living situations. We break down the living arrangements of millennials based on race and gender below.
White millennials are most likely to be homeowners compared to Hispanic and Black millennials.
Between POC and white millennials, the former are more likely to be saving to purchase a home.
Women ages 25 – 34 earn 93 cents for every dollar earned by men in the same age group on average, impacting living arrangements by gender.
The most common living arrangement for each gender is to live with a spouse, while the least common living arrangement is to live with a roommate.
Analyzing the attitude of millennials toward homeownership helps us understand why millennial home buyers are becoming more common.
While the home buying process can take 6 months to a year, many millennials expect to find a home within 3 months and expect housing to become more available in the future. However, the current real estate trends indicate that millennial home buyers may face challenges unique to their generation.
While millennials are optimistic about home buying, the competitive housing market poses a challenge.
A significant percentage of millennials are maturing into the head of the household, but the time it takes to find an affordable home is increasing with market prices.
While financial difficulties are the biggest obstacle for millennial homeowners, through budgeting, saving and persistence, homeownership is achievable.
As you begin the search to buy a home, Rocket Homes℠ can help you along the way. Connect with one of our agents and browse our houses for sale to find the option that works best for you.
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