Millennials — those between ages 26 and 41, also sometimes called Generation Y — now represent the biggest population cohort in America. And while lots of them dream of homeownership, many find themselves priced out of the housing market. In fact, nearly half of millennials who do not yet own a home are pessimistic that they may ever be able to, according to a recent study on the generation by Opendoor.
Here, we take a closer look at the 2022 Millennial Homebuying Trends Report to learn more about this important demographic’s homeownership preferences, challenges and trends.
Millennials and homebuying
It’s clear that millennials who want to own a home face many hurdles, especially compared to older generations. A 2022 report by the National Association of Realtors reveals that Gen Y represents the largest share of homebuyers in the country, at 43 percent. That includes the biggest percentage of first-time purchasers as well.
However, 28 percent of Gen Y buyers had to delay saving for a down payment or purchasing a home for more than five years due to outstanding debt. They are also the most educated group of homebuyers, according to NAR, and younger millennials in particular had the highest share of student loan debt at 45 percent. The sacrifices millennials make to buy a home include spending less on entertainment, clothes and vacations; picking up a second job to earn extra income; and moving in with family or friends to save on rent.
What is an ‘unmortgaged millennial’?
“Unmortgaged millennials want to own a home, but they feel like the odds are stacked against them,” says Beatrice de Jong, consumer trends expert for Opendoor. Fact is, plenty of millennials have never owned a home. This study takes a magnifying glass to the generation, coining the term to refer to millennials who have yet to become homeowners, despite being at prime buying age. “We came to this term when trying to figure out how to classify this group,” says de Jong.
What millennials want — and don’t want
As it turns out, millennial desire to own a home is strong. The report contains some interesting findings, including:
- 69 percent of millennials would prefer homeownership to renting
- 54 percent want a home to raise a family in
- 51 percent yearn for better living conditions
- 50 percent are tired of paying rent to a landlord
- 62 percent are willing to relocate more than 50 miles away to purchase a home, with 1 in 5 prepared to move more than 500 miles away
- 52 percent have felt an increased urgency to own a …….