Millennials have finally reached a significant milestone as more than 50 percent of millennials now own their homes, according to the latest data from the Census Bureau, Apartment List writes in the fourth installment of their annual Apartment List Millennial Homeownership Report.
“For a generation whose identity has been shaped by a tumultuous relationship with the housing market, homeownership has been a lofty goal, growing exceedingly expensive and competitive compared to when their parents were coming of age.
“But today the median millennial is a homeowner, with the latest millennial homeownership rate standing at 51.5 percent,” Apartment List economists say in the report.
Highlights from this year’s report:
- Nationwide, millennials have finally passed 50 percent homeownership, but they have purchased homes slower than previous generations. For instance, when Gen X was the same age as millennials today, their homeownership rate was 58 percent.
- Homeownership varies greatly by location. In Phoenix metro, the millennial homeownership rate is 51 percent, just shy of the national average. In general, millennials own more homes in the nation’s smaller markets, particularly those in the Midwest and Great Lakes regions.
- Millennials who continue to rent are getting priced out of homeownership by rapidly rising prices. In our latest survey, 25 percent of millennial renters say they will rent forever, and two-thirds have no money set aside for a down payment.
Impact of the Great Recession of 2008
The report says the most important factor in millennial home purchase was the Great Recession, “which suppressed homeownership across all generations but was particularly damaging to millennials, whose early career trajectories were shaped by a historically unstable economy.
“During the economic recovery that followed, many millennials were drawn to centrally located jobs in cities where starter homes became increasingly scarce and expensive. While many millennials purchased homes during these years, others spent more time living at home or in rentals, delaying major life events like homeownership, marriage, and childbearing when compared to earlier generations,” the economists write.
The Growing Importance of the Multifamily Industry
The report points out that many millennials will continue to rent, as housing is in short supply and prices are high.
“This highlights the growing importance of multifamily housing, the industry sector that rebounded fastest after the Great Recession and has continued to receive steady investment over the past year even as rising interest rates tempered single-family development.
“The record number of new multifamily units currently under construction are expected to bring some relief to the rental side of the housing market this year and beyond. Historically, the vast majority of these units have been built for rent, but as YIMBY (Yes In My Backyard)-backed zoning reforms and densification slowly gains traction, we may see more of them built for sale in the years ahead.
“It is possible that if attitudes towards homeownership shift to de-emphasize single-family homes, multifamily could provide an alternate path to homeownership as Gen Z reaches their homebuying years,” the Apartment List economists write in the report.
