CURBED's Jeff Andrews takes a look at a new report from the Urban Institute that dives into why the millennial homeownership rate remains stagnantly below that of other generations. For millennials ages 25 to 34, homeownership is 8% lower than baby boomers at that age, and 8.4 points lower than Generation X.
The Urban Institute’s report concludes that preferences toward homeownership among millennials have likely had an impact, but “might not have changed as significantly as some have suggested.” The report suggests that their preference for where to live is having a bigger impact than their views on homeownership itself.
Among Andrews' key findings:
Millennials like living in high-cost cities where homeownership is out of reach. “Millennials prefer to rent” because of their freewheeling, wayward lifestyle is an oft-peddled narrative. The Urban Institute’s report concludes that preferences toward homeownership among millennials have likely had an impact, but “might not have changed as significantly as some have suggested.” The report suggests that their preference for where to live is having a bigger impact than their views on homeownership itself.
Millennials are waiting longer to get married and have childrenHome purchases historically accompany entry into a new stage of life, such as having children or retiring. Millennials have been slower to pass through these stages of life than other generations, beginning with moving out of their parent’s house.
In 1990, 26 percent of 18-to-34-year-olds lived with their parents. In 2015, this share had risen to a whopping 35.5 percent. Similar trends are present in marriage. In 1990, 52.3 percent of 18-to-34-year-olds were married. In 2015, it was just 38.5 percent.
Student loan debt, tight credit make homeownership financial unfeasible. Buying a home used to be the largest expense a household would make in their lifetime, but over the last 20 years student loan debt has ballooned, loading millennials up with debt before they reach prime home-buying age.
At the beginning of 2003, outstanding student loan debt totaled $241 billion in the United States, according to the Federal Reserve Bank of New York. In 2018, it’s $1.4 trillion. Research from the Fed concluded that 11 to 35 percent of the decline in homeownership for 28-to-30-year-olds between 2007 and 2015 was a result of student loan debt.
