Published: April 14, 2023 | By: Fortune
More millennials finally own their homes than rent, a milestone that’s taken a bit longer for this cohort than previous generations.
Approximately 52% of millennials (typically defined as those turning ages 27 to 42 this year) owned a home by the end of 2022, according to recent research from RentCafe based on Census and survey data from the Integrated Public Use Microdata Series (IPUMS) project, part of the Institute for Social Research and Data Innovation at the University of Minnesota.
The number of millennial homeowners hit 18.2 million in 2022, growing by 7.1 million in the past five years alone. But despite the progress, baby boomers are still the largest share of homeowners in the U.S., with 32.1 million owning their own homes— nearly double the rate of millennials. About 24.4 million Gen Xers are homeowners. This does make sense, considering these older generations have had more time to accumulate wealth.
But thanks to the Great Recession’s economic headwinds and widespread student loan debt, it’s taken millennials a bit longer than previous generations to cross the threshold as a homeowner majority generation. In 2022, the average millennial was 34. When Gen X reached this same milestone, their average age was 32. Boomers achieved majority homeownership as a generation at the average age of 33.
Despite the gains though, many potential homebuyers are struggling in the current market. Home prices may be down from their peak in fall 2022, but higher mortgage prices are causing a lack of inventory as current homeowners fear giving up their historically low interest rates, according to Redfin data.
“One thing that’s true almost everywhere: It’s difficult to find a desirable, well-priced home for sale,” Taylor Marr, Redfin’s deputy chief economist, said recently. The median asking price of newly listed homes was $392,225 as of March 31, up 1.4% year over year.
That price point, however, is still unaffordable for many Americans. About 61% of them feel priced out of the current real estate market, according to a December 2022 survey by the Harris Poll of nearly 2,000 U.S. adults. That jumps to 69% among millennials—and more than half (56%) believe the dream of owning a home is dead, Harris’s survey found.
So while millennials have certainly made strides in becoming homeowners, the pace at which they’ve purchased homes over the past five years is not likely to continue. That leaves about half of this generation still renting, and Gen Z is quickly coming up behind.
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