Millennials saw the largest increases in homeownership of their lifetimes between 2019 and 2021, according to a Washington Post analysis of new Census Bureau data.
Millennials shut out of the housing market, again
November 30, 2022 at 6:00 a.m. EST
But that tide abruptly turned in 2022. Rising prices, decreasing inventory and high mortgage rates shut out younger buyers. The median age of home buyers skyrocketed to 53, the highest on record, according to a survey from the National Association of Realtors (NAR).
Millennials have always lagged behind other generations in homeownership. They started their careers in the shadow of the Great Recession, when highly paid work was hard to find. Lower earnings, high student debts and reduced wealth have followed them ever since.
Millennials less likely to own their homes
Percent of each generation living in a home that they or their spouse/partner own at each age group, 1960-2021
Aged
18-24
25-34
35-44
45-54
55-64
65-74
75+
80%
Baby
boomers
(1946-64)
Gen X
(1965-80)
Silent
generation
(1928-45)
40
Millennials
(born 1981-96)
0
Millennials less likely to own their homes
Percent of each generation living in a home owned by themselves, their spouse or their partner at each age group, 1960-2021
Aged
18-24
25-34
35-44
45-54
55-64
65-74
75+
80%
Baby
boomers
(1946-64)
Gen X
(1965-80)
Silent
generation
(1928-45)
40
27% of millennials (born 1981-96) lived in a home they or their partner owned at age 25 to 34, compared with 40% or more in previous generations
0
Millennials less likely to own their homes
Percent of each generation living in a home owned by themselves, their spouse or their partner at each age group, 1960-2021
Aged
18 to 24
25 to 34
35 to 44
45 to 54
55 to 64
65 to 74
75+
80%
Baby boomers
(1946-64)
Silent
generation
(1928-45)
Gen X
(1965-80)
60
40
27% of millennials (born 1981-96) lived in a home they or their partner owned at age 25 to 34, compared with 40% or more in previous generations
20
0
Millennials less likely to own their homes
Percent of each generation living in a home owned by themselves, their spouse or their partner at each age group, 1960-2021
Aged
18 to 24
25 to 34
35 to 44
45 to 54
55 to 64
65 to 74
75+
80%
Baby
boomers
(1946-64)
Silent
generation
(1928-45)
Gen X
(1965-80)
60
40
27% of millennials (born 1981-96) lived in a home they or their partner owned at age 25-34, compared with 40% or more in previous generations
20
0
Millennials reach major milestones including marriage, children and homeownership later.
When members of previous generations moved into rentals, many millennials stayed in their parents’ homes. When previous generations purchased their own homes, millennials moved into rentals for the first time.
Millennials more likely to live with parents, rent after age 24
Percent of each generation that lived in a parent’s household or in a rental at each age group, 1960-2021
Lived with parent
Aged
18-24
35-44
45-54
55-64
65-74
75+
25-34
50%
Millennials lived with their parents more often than previous generations...
25
Gen X
Baby
boomers
0
Silent generation
Rented
35-44
45-54
55-64
65-74
75+
18-24
25-34
50%
...and were more likely to rent once they moved out
Gen X
25
Boomers
Silent
0
Individuals living with a parent who rents are
included in “lived with parent” and excluded
from “rented.”
Millennials more likely to live with parents, rent after age 24
Percent of each generation that lived in a parent’s home or in a rental at each age group, 1960-2021
Lived with parent
Aged
18-24
35-44
45-54
55-64
65-74
75+
25-34
50%
Millennials lived with their parents more often than previous generations...
25
Gen X
Baby boomers
0
Silent generation
Rented
35-44
45-54
55-64
65-74
75+
18-24
25-34
50%
...and were more likely to rent once they moved out
Gen X
25
Boomers
Silent
0
Individuals living with a parent who rents are included in
“lived with parent” and excluded from “rented.”
Millennials more likely to live with parents, rent after age 24
Percent of each generation that lived in a parent’s household or in a rental at each age group, 1960-2021
Lived with parent
Rented
Aged
18-24
35-44
45-54
55-64
65-74
75+
35-44
45-54
55-64
65-74
75+
25-34
18-24
25-34
50%
Millennials (born 1981-96) lived with their parents more often than previous generations...
...and were more likely to rent once they moved out
40
Gen X
30
Boomers
20
Silent
Gen X
(1965-80)
10
Baby boomers
(1946-64)
0
Silent generation
(1928-45)
Individuals living with a parent who rents are included in “lived with parent” and excluded
from “rented.”
Millennials more likely to live with parents, rent after age 24
Percent of each generation that lived in a parent’s household or a rental household at each age group, 1960-2021
Lived with parent
Rented
Aged
18-24
35-44
45-54
55-64
65-74
75+
35-44
45-54
55-64
65-74
75+
25-34
18-24
25-34
50%
Millennials (born 1981-96) lived with their parents more often than previous generations...
...and were more likely to rent once they moved out
40
30
Gen X
Boomers
20
Silent
Gen X
(1965-80)
10
Baby boomers
(1946-64)
0
Silent generation
(1928-45)
Individuals living with a parent who rents are included in ‘lived with parent’ and excluded from ‘rented.’
Younger, first-time home buyers seemed to get a shot in 2021. Pandemic relief boosted savings for a down payment. Rents rose alongside home prices, and rock-bottom mortgage rates made it cheap to borrow money. Millennials moved into their own homes at the fastest rate ever seen for their generation.
“There was a life cycle component to leaving a parent’s household, renting and buying, and the timing for millennials may have been delayed compared to Gen X,” said Carlos Garriga, senior vice president and director of research at the Federal Reserve Bank of St. Louis. But in 2021, he said, “the millennial generation was catching up.”
That abruptly changed the next year. By mid-2022, the share of homes purchased by first-time buyers plummeted from 34 to 26 percent, the lowest level in at least four decades. The median age of home buyers shot up from 45 to 53, the oldest since NAR started collecting data in 1981.
“First-time and younger buyers in 2021 still faced increasing home prices, but we did not see mortgage rates climb to the same level that we have in 2022,” said Brandi Snowden, director of member and consumer research at NAR.
Mortgage rates began a rapid ascension in 2022. The average rate for a 30-year fixed mortgage has more than doubled in the past year, according to Freddie Mac, peaking at 7 percent in early November. Higher mortgage rates can translate to paying hundreds of dollars more each month to borrow the same amount of money.
A 30-year fixed mortgage for a $450,000 house would cost:
$545,000 in July 2021
Average mortgage rate: 3%
$360K
principal
$185K
interest
$720K in July 2022
Rate: 5.3%
$360K
$360K
$952K in November 2022
Rate: 7%
$360K
$502K
Assuming a 20% down payment. Does not including
closing costs, taxes, insurance or fees. Rates
reflect the first week of the month.
A 30-year fixed mortgage for a $450,000 house
would cost:
$545K
in July 2021
Average rate: 3%
$720K
in July 2022
Rate: 5.3%
$952K
in November 2022
Rate: 7%
$360K
principal
$360K
$360K
$185K interest
$360K
$502K
Assuming a 20% down payment. Does not including closing
costs, taxes, insurance or fees. Rates reflect the first week
of the month.
A 30-year fixed mortgage for a $450,000 house would cost:
$545K in July 2021
$720K in July 2022
$952K in November 2022
Average mortgage rate: 3%
Rate: 5.3%
Rate: 7%
$360K principal
$360K principal
$360K principal
$185K interest
$360K interest
$502K interest
Assuming a 20% down payment. Does not including closing costs, taxes, insurance or fees.
Rates reflect the first week of the month.
According to Snowden, already high prices, low housing inventory and rapidly rising mortgage rates in 2022 “may have caused would-be buyers to delay homeownership.”
High mortgage rates also reduce the number of homes on the market. Homeowners are more likely to stay put when buying a new home, which means switching to a mortgage with a much higher interest rate.
The homeowners that do move get a financial boost from the increased value of their old home. But rising prices put first-time buyers in a worse position to compete for the shrinking number of available homes.
“Anybody who already owned a house did very well,” said Gray Kimbrough, an economist at American University. “The problem is, if you go from renting to buying in a really expensive market, you don’t have the advantage of all the equity other people built up by happening to own a house in a market that got a lot more expensive.”
There is little respite in sight for those hoping to buy their first home. The housing market is cooling, but mortgage rates are expected to remain high as the Federal Reserve raises borrowing costs to combat inflation. And the high costs of rent, food and other necessities make it more difficult to save for a first-time down payment.
“[For] people who aren’t able to find appropriate housing, it’s a lot harder to change a job, to get married, to have kids,” Kimbrough said. “And because we’ve made homeownership primarily for people in their 50s, 60s, 70s, 80s, it’s really hard for people who are earlier in their lives to move on to the next life stage.”
About this story
Data on homeownership, renting and living with parents comes from the decennial census (1960-2000) and the American Community Survey (2007-2021). Microdata from 1960-2019 was accessed through IPUMS USA, while 2021 microdata was accessed through the R package tidycensus.
Traditionally, homeownership and rentership are measured on the household level, based only on the characteristics of the householder (the primary person who owns or rents the home). However, this story focuses on the living conditions of individuals to better describe the experiences of entire generations and to more accurately capture trends related to age. The story focuses on individuals in one of three groups: those who live in a home that they, their spouse or their unmarried partner own; those who live in a home owned or rented primarily by one of their parents; or those who live in a rented home where their parent is not the householder.
Data on the median age of home buyers and the percent of first-time home buyers comes from the National Association of Realtor’s Profile of Home Buyers and Sellers.