The NAR 2022 Generational Trends report indicates 48% of all homebuyers were millennials.
Millennials hold the most education, with 84% of younger millennials holding at least a bachelor’s degree.
Student loan debt was cited as the biggest barrier to saving up for a down payment for both younger and older millennials.
As the largest generation in US history, millennials (born between 1980–1998) are a topic of endless fascination and debate. The generation has been accused of making once popular things obsolete, like cereal and American cheese – but are starter homes in that category?
But according to the National Association of Realtors Home Buyers and Sellers Generational Trends Report, millennials comprise the largest share of homebuyers out of any generation. In 2022, 43% of all buyers were millennials.
While some millennials may have found it previously difficult to get their collective foot in the housing door, they’re now catching up with other generations. NAR’s report provides additional insight into the obstacles facing aspiring-homeowner millennials and they are overcoming them.
Out of all generations of homebuyers, millennials are collectively the most educated. The NAR report found that 84% of younger millennials (23–31 years old) who bought a house have earned a bachelor’s degree or higher, as have 77% of older millennial homebuyers (32–41 years old).
That higher education may have correlated with older millennials’ buying power — they had the second-highest income of any generation surveyed, with a median $110,300 in household income — but it also has created a savings burden for millennials, who said student loan debt and the high cost of rent were the two biggest expenses that delayed their down payment or other home purchase savings goals.
To generate a down payment and cover closing costs, many buyers save money; 61% of all buyers saved up for their down payment. Millennials relied even more heavily on savings than most buyers, with 72% of older millennials and 86% of younger millennials saving up for their down payment. And despite their efforts, millennials said saving money was more difficult when they had more debts to pay.
“23% of all buyers reported having student loan debt with a median amount of $30,000,” NAR’s report claims. “Younger Millennials had the highest share of student debt at 45%, with a median amount of $28,000.“
Other expenses that delayed millennial savings included credit card debt, car loan payments, childcare, and health care costs. Younger millennials said these expenses delayed their home purchase journey an average of 3 years, while the median delay stretched to 4 years for older millennials.
Millennials also leaned on gifts from family members and friends to help them make their home purchase dream a reality, according to the study.
The bottom line
Since 2014, millennials have bought more houses than any other generation, NAR finds. No small feat, millennial purchases continue to increase despite delays caused in part by student debt, increased rent prices, and other macroeconomic headwinds facing the largest generation.
This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice. Opendoor always encourages you to reach out to an advisor regarding your own situation.
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