Millennial Home Buying Statistics And Trends

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

• 9% of millennials own homes as of 2020⁵.
• 71% of millennials can afford less than half of the homes on the market⁵.
• Utah has the highest share of millennial homeowners at 59%, while California has the lowest share at 30%¹¹.
• 53% of millennial homeowners are white, 35% are Hispanic and 21% are Black¹¹.

How Many Millennials Own Homes?

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.

• The millennial homeownership rate increased from 43% to 47.9% from 2019 to 2020. This is still significantly lower than the homeownership rate for baby boomers at 78.8% and Generation Xers at 77.8%⁵.
• The share of millennials planning to purchase a home increased from 19% to 29% from 2020 to 2021⁶.
• As of Q2 2021, 67% of millennials were actively engaged in trying to buy a home. This marks a 10% increase from Q2 2020⁶.
• Adults ages 35 – 44 are more than 20% more likely to own a home than adults 30 and younger⁵.

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.

Homeownership By Generation

To better understand the home buying trends of millennials, we can compare them with previous generations.

Younger Generations Have The Most First-Time Homeowners

When we look at generational home buying trends, we see that younger generations have higher rates of first-time homeownership.

• 84% of Generation Z homeowners were first-time home buyers in 2021⁶.
• 73% of millennial homeowners were first-time home buyers in 2021⁶.
• 57% of Generation X homeowners were first-time home buyers in 2021⁶.
• 20% of baby boomer homeowners were first-time home buyers in 2021⁶.

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.

Younger Generations Are More Optimistic About Homeownership

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.

• 30% of Generation Zers are currently saving to purchase a home, 8% expect to inherit a home in the future and 7% don’t expect or plan to ever own a home⁷.
• 33% of millennials are currently saving to purchase a home, 7% expect to inherit a home in the future and 13% don’t expect or plan to ever own a home⁷.
• 23% of Generation Xers are currently saving to purchase a home, 5% expect to inherit a home in the future and 31% don’t expect or plan to ever own a home⁷.
• 10% of baby boomers are currently saving to purchase a home, 4% expect to inherit a home in the future and 61% don’t expect or plan to ever own a home⁷. 

The majority of baby boomers don’t expect or plan to become homeowners, while only about one-tenth of millennials feel the same.

Millennials Purchase The Cheapest Homes

Generation Z’s median home purchase price was 5% higher than that of millennials. 

• The median home purchase price for Generation Zers in 2019 was $259,000⁸.
• The median home purchase price for millennials in 2019 was $230,000⁸.
• The median home purchase price for Generation Xers in 2019 was $283,000⁸.
• The median home purchase price for baby boomers in 2019 was $325,000⁸. 

As of 2019, the median home purchase price for baby boomers was almost $100,000 more than the price for millennials.

Can Millennials Afford To Buy Homes?

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.

• As of Q2 2021, 71% of millennials can afford less than half of the homes on the market⁵.
• The average U.S. down payment is almost $62,000, though 40% of millennials expect it to be less than $10,000¹⁰.
• 47% of millennials surveyed say they have less than $10,000 saved, while 14% of millennials surveyed say they have nothing saved¹⁰.
• In 2020, the only large U.S. city where millennials could afford a down payment with less than two years of saving was Detroit¹⁰.
• 44% of millennial renters say not having enough money for a down payment and closing costs is a major obstacle to homeownership⁸.
• 35% of millennial renters say not being able to afford a monthly mortgage payment is a major obstacle to homeownership⁸.
• 29% of millennial renters say not having an established credit history to qualify for a loan is a major obstacle to homeownership⁸.
• 77% of millennials believed renting was the more affordable housing option for them in April 2019⁸.
• 43% of millennials are very concerned about their financial debt⁹.

Expensive housing prices and a lack of established credit history were major obstacles that stood in the way of millennial home buyers.

Millennial Home Buying Statistics By Location

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.

• States with the highest share of millennial homeowners in 2019 were Utah (59%), South Dakota (58%) and Oklahoma (57%)¹¹.
• States with the lowest share of millennial homeowners in 2019 were California (30%), New York (30%) and Texas (39%)¹¹.)
• 71% of San Jose, CA home buyers were millennials in 2020, making it the metropolitan city with the highest share of millennials. Other metropolitan cities with a high percentage of millennial home buyers included Boston (59.09%) and Denver (59.07%)¹².
• The citywide share of millennial homeowners was lowest in San Diego (22%), San Francisco (25%) and New York (26%) in 2019¹¹.)

“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.”

Millennial Living Arrangement Demographics

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.

Millennial Home Buying Statistics By Race

White millennials are most likely to be homeowners compared to Hispanic and Black millennials.

• 53% of millennial homeowners are white, 35% are Hispanic and 21% are Black¹¹.
• 29% of white millennials are saving to purchase a home, 38% aren’t saving and 14% don’t expect or plan to ever own a home⁷.
• Of millennials who are people of color (POC), 37% are saving to purchase a home, 31% aren’t saving and 14% don’t expect or plan to ever own a home⁷.

Between POC and white millennials, the former are more likely to be saving to purchase a home.

Millennial Living Arrangement By Gender

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.

• 42% of millennial women live with a spouse compared to 33.1% of millennial men¹³.
• 7% of millennial women live alone compared to 9.1% of millennial men¹³.
• 7% of millennial men live at home with their parents compared to 13.2% of millennial women¹³.
• 6% of millennial women live with an unmarried partner compared to 12.3% of millennial men¹³.
• 6% of millennial women live with a roommate compared to 8.2% of millennial men¹³.

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.

Millennial Attitudes Toward Homeownership

Analyzing the attitude of millennials toward homeownership helps us understand why millennial home buyers are becoming more common. 

• 51% of millennials say buying a home is an important life goal for them⁹.
• 43% of active millennial home buyers expect to find a home within three months, compared to 11% of active millennial home buyers who expect it to take over a year to buy a home¹⁰.
• As of 2021, 34% of millennials expect housing availability to ease up. That marks almost a 10% increase from millennial expectations in 2020⁶.
• Millennials seeing more homes for sale increased from 35% to 36% from 2020 to 2021⁶.
• The share of millennials who are looking to buy a newly built home is 38%⁶.

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.

Millennial Real Estate Trends

While millennials are optimistic about home buying, the competitive housing market poses a challenge.

• The primary reason that 34% of active millennial home buyers failed to buy a home in Q2 2021 was because of high home prices⁶.
• 46% of millennials are the head of their household as of 2019¹¹.
• 67% of millennials are spending 3 or more months searching for a home as of Q2 2021. That marks an 11% increase from the previous year⁶.

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.

Sources:

¹IBM & National Retail Association, 2022

²Deloitte, 2021

³Statista, 2021

⁴IBM & National Retail Federation, 2020

⁵U.S. Census Bureau, 2022

⁶Housing Trends Report, Q2 2021

⁷Morning Consult, 2020

⁸Freddie Mac, 2021

⁹Morning Consult, 2019

¹⁰Point2Homes, 2020

¹¹U.S. Census Bureau, 2019

¹²LendingTree, 2021

¹³U.S. Census Bureau, 2021