Half of Millennials Are Finally Homeowners

Congrats to millennials! Slightly more than half, or 51.5%, of those born between 1981 and 1996 now possess the keys to their kingdom or at least their own home, according to the latest Census Bureau data reported in Apartment List’s 2023 Millennial Homeownership Report. 

But for many it took a long time to achieve that goal; certainly longer than their parents. The longer time span continues a trend of the last three generations, all of whom bought homes slower than the generation that preceded them.

In fact, millennials made the slowest transition from being renters to homeowners. By age 30, 42% of millennials owned homes, compared to 48% of gen Xers, 31% of baby boomers and nearly 60% of the silents or silent generation.

But the flip side of the 51.5% homeownership number is that an almost equal number or slightly fewer haven’t yet made the transition, according to the Apartment List Report.

A handful of reasons account for the longer, drawn-out switch from being renters to buyers. The most significant was the Great Recession, which proved especially hard on millennials, who experienced career challenges due to the unstable economy. As the economy recovered, many millennials found jobs in cities where starter homes were scarce and expensive. Some plunged in and bought if they could, but others lived at home or rented. 

Then, the big wallop of COVID-19 emerged, which widened the gap between millennial homeowners and renters. Those who could buy early on experienced lower mortgage rates. Those who didn’t but looked or sat on the sidelines witnessed inventory shortages, rising prices, and soaring mortgage rates. The possibility of buying became tougher.

The result, the report found, is a have-and-have-not generation with almost equal numbers owning and not owning. Some renters even say they expect to rent forever, according to the Apartment List Report. The jump in “forever renters” between 2019 and 2020 reflects the effect of the pandemic when homeownership became more unaffordable. The prime reasons are lack of savings for a downpayment.

Those who are more likely to buy are heading away from dense, expensive cities and toward smaller, more affordable ones, which they’ve been able to do in part because of greater remote work opportunities, a temporary pause in urban vibrancy and a yen for more space. That is even more of a reality if they favor non-metropolitan areas and smaller markets with fewer than 1 million residents. For example, Grand Rapids, Mich. Metro, reflects a millennial homeownership rate of 63% versus Los Angeles at a much lower 27%.