Millennials Are Underperforming in Today’s Housing Market, and It’s Not Hard to Understand Why

Millennials currently make up the largest generation of Americans, and many are reaching their peak ages for homebuying, but despite a rising national homeownership rate, first-time buyers are lagging behind. The average age of today’s first-time buyers is 36, the oldest reported since the National Association of Realtors (NAR) first started collecting data on the age of U.S. buyers in 1981. 

Not only are entry-level buyers getting older, but they’re also few and far between. The annual share of first-time primary residence buyers is at 26% compared to a historical average of 40%. Affordability obstacles caused by record high home prices and fast-rising mortgage rates are creating a roadblock for many budget-conscious young buyers, and an inventory shortage is another major deterrent, NAR reports.

So with that bleak picture, where is the homeownership rate for those under 35? (Census provides a consistent reading of the homeownership rate by age, though this does not match directly to generations.) When looking at the Census homeownership rate data, there have been positive reports that the rate improved for those under 35. This is true. From 2021 to 2022, the homeownership rate did improve. However, if one compares the homeownership rate from 1982 to today and then separates the data by generation, it tells a less positive story. For baby boomers and Gen Xers, the average homeownership rate for those under 35 was 39.7%. There has yet to be a year that millennials have reached that number.

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