If one were to picture what the American dream means to most Americans, some obvious elements include a successful career, a happy family, and of course, homeownership. The idea of homeownership as a symbol of success is so deeply ingrained in American culture that it is rarely questioned. However, in recent years this has shown signs of change, with millennials, often defined as adults born between 1980 and 1999, entering the housing market later than older generations. For some, that may be a lifestyle choice, but for the majority, the reason is much more trivial: Today’s housing market is substantially different than the housing market earlier generations had to enter. The shortage of newly built homes has led to a highly competitive market with
. Millennials not only have to put down higher down payments, but they also
in the process. In 2022, homeownership among 34- to 44-year-olds was still
.
Why do millennials struggle with homeownership?
Unsurprisingly, young adults between 24 and 32 years struggled to find the right property to purchase, understand the homebuying process, and save up for down payment
more than any other age group. A growing number of millennials have
given up on homeownership in recent years. The majority
cites affordability as the main reason, though some say home maintenance costs, the flexibility of renting, and the financial risk of homeownership also play a role. Another reason millennials may take longer to enter the housing market is that
student debt has prevented them from saving for a mortgage down payment. Approximately two-thirds of young adults say that they
have no savings for a down payment. However, that does not mean that millennials are uninterested in becoming homeowners eventually. Homeownership among millennials has increased substantially in recent years, and an
overwhelming share of new homeowners in cities such as San Jose, Boston, Denver, Minneapolis, and Buffalo were millennials in 2022.
What do millennials look for in a home?
Different stages of life suggest different priorities when looking for a home. Younger millennials in the age group between 24 and 32 are at the start of their careers, making the
proximity of their home to their job more important than it is for other generations. Other important factors when shopping for a home include the quality of the neighborhood, affordability, and convenience to friends and family. For older millennials between 33 and 42 years, who are more likely to be parents, the availability of schools stood out as a factor with a higher importance than other age groups.
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