45% of Millennials are now homeowners. Find out how your generation stacks up

Buying a home has long been part of the American dream. For millennials in particular, the Great Recession hit just in time for the oldest among them to be forced to delay jumping on that train until early in life.

Fortunately, mortgage rates fell into the 5% range immediately after the housing crash and remained low throughout the recovery, giving this generation and others a chance to catch up on their home-buying goals as Housing was still relatively cheap.

But since the COVID-19 pandemic, everything is more expensive and many millennials feel like they’ll never achieve their financial goals. If you’re a millennial, the good news (or maybe the not-so-good news) is that if you haven’t started your home buying journey, you’re hardly behind.

Let’s see what that looks like and how other generations compare.

Generational trends in homeownership

It is probably not surprising that baby boomers (born between 1946 and 1964) are the most likely to be homeowners. After all, they’ve been in the workforce longer than almost anyone, and if they’re not yet retired, they may be working in higher-level jobs with high incomes for their field. In short, they can afford to be owners, even today.

Currently, 74% of baby boomers own their own home. But this generation reached a 50% ownership level in the mid-to-late 1980s.

The silent generation (born between 1928 and 1945) had strong levels of homeownership well before data collection. Only recently have they started to see their homeownership rates decline. For 2023, this figure was 70%.

This generation is likely experiencing a decline in homeownership due to the transfer of wealth to younger generations as they form multigenerational households or outright sell their homes to move into senior housing.

Generation X (born between 1965 and 1980) finally saw half of their population reach their homeownership goals around 2005, just in time for the Great Recession. But they have largely managed to keep their homes despite all this chaos. Today, their homeownership rate is 65%.

Millennials (born between 1981 and 1996) have not yet reached their 50% threshold, but this should happen soon. They are currently 45% owners in 2023, but showing a strong upward trend. They are determined to buy a home, it seems, despite current market conditions.

Generation Z (born between 1997 and 2012), surprisingly, can already consider 8% of its population as owners. A few acquired property very early.

Data source: Apartmentlist.com.

Where are millennials buying homes?

According to a study by ApartmentList.com, millennials are buying in cities of all sizes, but are experiencing most of their success in areas with low populations.

In fact, non-metro areas have the highest millennial homeownership rate at 50%. Metro areas with fewer than 1 million residents still have a high millennial homeownership rate, at 44%, roughly equal to the national average.

From there, the picture gets bleaker, with millennials living in cities with populations between one and five million owning just 41 percent of the time. And in cities with more than five million people, millennials own only 33% of the time.

Millennials have done well in the Midwest, with cities like Minneapolis, Grand Rapids, Cincinnati, Louisville, Indianapolis and St. Louis boasting homeownership rates of 50% or higher.

Home Buying Tips for Every Generation

Buying a home today is extremely difficult, and it will likely become even more difficult now that rates are expected to fall further. People who have been on the sidelines might just be ready to re-enter the fray. So, to stay competitive in the real estate market, keep these tips in mind.

Get a pre-approval letter before shopping

Some markets still have multiple offer situations on the best homes, and you don’t want to be caught empty-handed if you’re in one of them. Talk to a mortgage lender – or a few – and get fully pre-approved before you shop. So if you make an offer, you look like a serious buyer.

Be Prepared for the Expenses of Buying a Home

You’ll need a lot of money to buy a house, even if you get a loan. Unless you’re using a specific first-time homebuyer program, you’ll need at least 3.5% of the sale price for your down payment, plus significant additional cash for down payments. closing costs, prepaid items, home inspections and moving costs. Your lender will be able to give you a rough estimate of how much money you will need to bring to closing.

It will be a marathon, not a sprint

Unless you’re incredibly lucky, you’ll likely spend weeks or months viewing homes. You can speed up the process by knowing what you’re looking for: Online real estate listings can give you a real idea of ​​what to expect in your price range. Wait until you’re pre-approved to start looking online, though, or you risk setting yourself up for big disappointment if you start looking in the wrong price range.

Regardless of your age, owning a home can give you a sense of security and allow you to create generational wealth to pass down to your children or other family members. It’s not for everyone, but if it is for you, be patient and make careful decisions about this important purchase.