A recent MReport article discusses the differences between generations who are homeowners. According to Apartment List’s 2021 Millennial Homeownership Report, it is predicted that millennials are going to own the smallest percentage of homes. The report stated that by the age of 30, roughly half of baby boomers owned a home. 48% of gen Xers were homeowners at age 30. Currently, only 42% of 30 year old millennials are homeowners, and that percentage is expected to drop. Studies have shown that many millennials prefer to rent instead of purchasing a home. In 2018, 11% of millennials reported that they never saw themselves buying a home. In 2019, that number rose to 12%. In 2020, 18% of millennials reported that they believe they will continue to rent instead of becoming a homeowner. According to the article, affordability is a major factor keeping millennials from pursuing homeownership. Additionally, the rise in home prices due to the COVID-19 pandemic has discouraged this generation even further. Roughly 63% of millennials reported that they did not have enough money for a down payment on a home.
WHY ARE MILLENNIALS RENTING INSTEAD?
While millennial homeownership is increasing, it still lags behind previous generations. After the Great Recession, over 50% of home purchases were by first-time buyers. Experts state that in the last three years, the amount of millennials purchasing their first home grew from 31% to 33%. This is a significant decrease for such a short period of time. The MReport stated, “Affordability and the perception of affordability continue to hinder millennials from homeownership. Although interest rates recently dropped to historic lows, down payments were and continue to be a huge hurdle. In fact, 74% of millennials who said they’d never buy cited overall affordability as the reason, compared to 34% who prefer the flexibility of renting and 32% who didn’t want to deal with unforeseen maintenance and expenses”.
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Click here to read the Apartment List’s 2021 Millennial Homeownership Report
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