A new report from the Urban Institute asks why Millennial homeownership rate is so low, and what can be done to raise it.
Despite being the largest generation in American history, Millennials' homeownership rate is about eight to nine percent lower than Baby Boomers and Generation Xers when they were the same age. The Urban Institute's report attributes this to a variety of factors, including Millennials' greater racial and ethnic diversity than other generations, as minority households are notably less likely to be homeowners than whites. Parental homeownership was also found to be an important factor in Millennial homeownership: the homeownership rate for Millennials whose parents were homeowners is 31.7 percent, 17.3 percent more than those whose parents were renters, MarketWatch reports.
“Homeownership has historically been the best way to build wealth,” says Laurie Goodman, the vice president of the Urban Institute center. “You look at the average wealth of homeowners – they’re more affluent to begin with, but homeownership for most Americans is the way to build wealth.” Wealth matters in ways that earning power, jobs and wages, does not. If this path forward is cut off, it will reshape the American economy. And it may make many younger people feel they have it worse than their parents, in a cruel distortion of the American Dream.