Study Finds Most Millennials Are Nowhere Near Owning a Home

Bryan Michalek | May 31, 2017
Font Size

The house, the home, the American Dream. It's a life plan that several generations have had in mind since the 1950s.

We set homeownership as a benchmark for progress and success in our own lives. Owning your own place becomes that huge transitional step that transforms you from the malleable and inexperienced youth into the confident and established adult. For millennials, this dream should be on the horizon -- but unfortunately many haven’t even prepared to save for this hugely important buy.

Though the idea of buying and owning a home remains largely popular, home ownership has declined with the rise of Millennials. According to a study by Apartment List, 80 percent of Millennials (those born between the years of 1982 and 2004) want to own homes. Sadly, 72 percent cannot currently afford to do so.

The study also found that Millennials are preparing to wait longer to buy a home, and are often postponing the purchase for 5 years or more.

The study also looked at current savings rates and found that most people would need at least a decade to save enough money to buy a home. Millennials are also dramatically underestimating the requirements for a down payment, with many being off by 50 percent or more, the study found, adding that young adults more often say they want to live in metropolitan areas, which typically are much more expensive.

As the U.S. comes to terms with the inevitability of this housing problem, many are looking for a reason to explain the situation. 

Tim Gurner, an Australian real estate mogul, caught flack after he blamed Millennials' poor savings on the increase of splurge spending. During an interview on CBS's 60 Minutes, he said, “When I was buying my first home, I wasn’t buying smashed avocado for 19 bucks and four coffees at $4 each."

Gurner also mentioned that “The expectations of younger people are very, very high.” 

“They want to eat out every day, they want to travel to Europe every year," he added.  

That criticism wasn’t taken well, with many people ridiculing the idea and blaming the situations on health care, rent, and student loans.

While outside factors may be one reason behind the drop in home ownership, it doesn't fully explain why 68 percent of Millennials have less than $1,000 in savings, with 44 percent saying they have nothing saved at all. It's a problem that some say could affect a person for the rest of his or her life.

Self-made millionaire David Bach warns, “If millennials don’t buy a home, their chances of actually having any wealth in this country are little to none. The average homeowner to this day is 38 times wealthier than a renter.”

It remains to be seen how Millennials will grapple with the difficult task ahead. But if the housing market is to remain stable, the country needs people who not only want to own a home, but can actually buy one.

mrc merch