Guiding You Home

Millennials, the largest generation in history, have finally entered prime home-buying age (25-40). However, they are not flocking to homeownership in nearly the same fashion as the generations that preceded them. Despite large increases in Millennial homeownership over the past decade (from 30% in 2011 to 48.6% in 2021, they still lag far behind every other generation. Gen X, those of us aged 41-56, outpaces the Millennial Generation by over 20% when it comes owning homes. For the Silent Generation, those 76 and older, the homeownership rate stands at 78%, while the top prize goes to the Boomers of whom 78.5% own their own home. Even when controlling for age, Millennials lag behind. Among older Millennials who have hit age 40, 60 percent own homes. At that same point in life, 64 percent of Gen Xers, 68 percent of Baby Boomers and 73 percent of Silents owned their own homes. And this gap seems set to grow to even larger. A growing number of Millennials (22% as of 2021) say they see themselves as “always renters.” And those who either see themselves owning a home one day, or who are actively planning to buy a home, preparedness is an issue. Down payment savings rates remain shockingly low for Millennials who say they want to buy a home. In 2021, over 60% said they have no savings at all, while only 16% have saved more than $10,000. early two-thirds say they have no savings whatsoever, and only 16 percent have saved more than $10,000 with the average savings being just over $12,000—which represents only 2-3% of the average sales price of a condo in Washington, DC. Two contributing factors to this growing gap, beyond simple differences in demographics and lifestyle among the various generations have been the Covid-19 Pandemic, and the rising interest rate environment. Home prices soared during the pandemic, while inventory plummeted to new all-time lows. This lack of supply, significantly higher prices, and the shocking rise in interest rates over the past 12 months, are making matters worse. Today, 70% of Millennials say they simply cannot afford to purchase a home. While the current environment seems hostile to homebuyers—especially first-time buyers, there are ways to mitigate the factors standing in your way. Planning and saving are vital if your plan is to purchase a home one day. There are also many assistance programs, both public and private that offer financial help to first-time buyers. These range from tax incentives, from cities and states to grant programs run by individual lenders. If you’re thinking about buying, but are worried that you can’t afford it, there may be programs available that can help you close the gay and get you out of your apartment and into your own home. Interested in learning more? Just Ask James. Source: Apartment List Rental Survey