Despite being the largest cohort of potential homebuyers in the country, Millennials are lagging behind other generations in purchases.
That applies to Baby Boomers now – who are snatching up the few homes for sale thanks to home equity and greater savings – and Boomers when they were the same age as Millennials today. Just over 50% of Millennials owned a home in 2022, compared with 56.5% of Boomers in 1990 and 58.2% of Gen X in 2006.
Even the youngest generation, Gen Z, is tracking ahead of Millennials in homeownership at the same age.
A combination of forces has made it difficult for Millennials to become homeowners. Ongoing bouts of economic uncertainty in 2001, 2008, and today have hindered their earning potential, and many are saddled with student debt. Today’s high rates and home prices aren’t helping either.
“Millennials have been financially unlucky. Their parents had a more straightforward financial journey,” said Redfin Chief Economist Daryl Fairweather. “The oldest millennials entered the workforce during the 2001 recession. Then came the 2008 financial crisis, with many millennials in their first post-college job.”
Millennials are ready to sacrifice and compromise in order to own a home.
They overwhelmingly would relocate to a more affordable area, either out of a state or in a less desirable area of their current city, and have no problem buying fixer-uppers. They’re also the most likely cohort to buy a home at auction or sight unseen.
Many Millennials entered their 30s, a prime homebuying age, during the housing boom of the last two years and face high competition from older, richer buyers and real estate investors. But their biggest problem is the stock shortage. Builders simply haven’t produced enough homes to accommodate the group, which numbers more than 72 million.
Single-family starts increased 2.7% in March, but are still down 27.7% YOY. Builders have expressed concern over the softening market, so it’s possible they’ll slow production again rather than make risky bets.
“With demographic trends, we knew this was coming,” Nicole Bachaud, a senior economist at Zillow, told Business Insider. “And still, you look at new construction trends: Up until 2021, new construction has been way down since the end of the Great Recession.”
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