Millennials are vastly different from previous generations, and it has changed society in a multitude of ways. Their impact on the housing market is no exception, with the growth rate of the housing market slowing down significantly. In 2019, Millennials are between 22-39 years old. Despite their young ages, Millennials highly associate buying a home with the white picket fence “American Dream” that most previous generations have also strived to attain. However, only about a third of Millennials between 25-34 own a home, whereas half of Baby Boomers and Generation Xers owned a home at the same age.

Why is this the case? Most Millennials do not get married until they are in their late 20’s to early 30’s, which is a substantial difference from their parent’s generation, the majority of whom were married with children by their mid to late 20’s. By not being a wedding-driven group, there are also less that are attempting to start families, a factor that heavily increases a person’s likelihood to purchase a home. Rather, Millennials are comfortable living with their parents in basements and bonus rooms, with nearly a third of them still living at home by age 34. Baby Boomers are less likely to kick their kids out post-college. If and when they do, the ever-social Millennials are moving in with several roommates to cut the cost of living.

Despite carrying significantly more debt than previous generations, the percentage of millenials that are purchasing homes are, surprisingly, more likely to spend more than the average on their first home. With most first-time buyers spending around $150k on a starter home, Millennials are spending roughly double that. This is likely due to the fact that they do not want “fixer-uppers,” but opt for more specific must-haves in a home to avoid dealing with renovations and other problems. They are also looking outside of the city and into more suburban areas, since cities have steadily become more expensive and are associated with renting rather than buying.

So they’re not buying as much as previous generations: Who cares? At the very least, Millennials are at risk for having less financial security later on in life by waiting to purchase a home. Homeownership is a touchstone of being prepared for retirement, so purchasing at age 50 and 60 is not going to make for a stable 30-year retirement fund. Despite all the differences between Millennials and older generations, the largest has to do with the fact that younger generations are graduating college with an average amount of $42k in student loan debt and an average starting income of about $35k. This forces them to give up a high percentage of their paycheck to paying off student loans, leaving little to be saved. Simply put: Millennials are gathering wealth more slowly than ever before.


By: Brigid Buckley