Millennials are the nation’s largest generation, and by sheer volume they are purchasing more homes than any other group, Apartment List research reports.
The Census Bureau even credits them with driving a recent upward trend in homeownership nationwide. But despite some positive trends recently, long-term data show millennials remain well-behind previous generations when it comes to owning homes. (Millennials were born from 1981-1996, making them 28 to 43 today. Those in Generation Z were born from 1997-2012, making them 12 to 27 years old today.)
Much of the reason for the lag in millennial home ownership is tied to the 2008 housing market collapse, which happened right as they were entering the work force.
Also, when the economy recovered, and many millennials were drawn to jobs in centrally-located cities, some found that renting apartments made more financial sense than buying starter homes that were becoming increasingly scarce and expensive.
Some research points:
- Millennial homeownership is growing slower than that of previous generations.
- Millennials are finding the most success in smaller, Midwestern housing markets.
- Millennials in large metros are less likely to own homes.
- Gen Z homeownership is keeping pace with millennials, for now.
- Gen Z and millennials are living with their parents longer.
As millennials grapple with the housing market into their 40s, the next generation is also getting old enough to start buying homes. As of 2023, 8 percent of Gen Z adults own a home, and so far, their homeownership rate is trending in line with millennials through their mid-20s.
What does this mean for the future?
“We’re already seeing the housing market adapt to these homeownership trends. Anticipating that millennials and Gen Z’ers will still want to live in single-family homes even if they can’t afford to buy them, the “built-for-rent” sector is booming.
“Nearly one in 10 new single-family homes in 2023 were built to be rented instead of owned. Similarly, the past year has seen a flood of new multifamily units hit the market, which has helped moderate the cost of renting relative to owning.
“One source of optimism for Generation Z and prospective first-time homebuyers is that the housing market is finally drawing widespread attention from policymakers, at every level of government,” writes Rob Warnock, senior research associate at Apartment List, in the report.