The Rise of Millennials and Decline in Home Ownership

Millennials (those born between the early 1980s and late 1990s) are the largest generation in U.S. history, but this sector of the population, unlike their parents and grandparents, are not as quick to settle down. Renting is the new norm for millennials not buying homes. We take a look at the reasons why millennials and home ownership are not a done deal.

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1. Millennials are leaving home and getting married later in life

According to a new report by the Urban Institute, who have conducted research into millennials home buying trends, leaving home and getting married are two milestones that frequently lead to buying a home. But for this age group, they are being delayed until later in life.

More millennials are choosing to live at home with their parents rather than buy their own place. Statistics by the Urban Institute show that in 1990, 26% of 18-34 year olds lived with Mom and Dad. But in 2015, this figure had increased to 35.5%.

Marriage also increases the likelihood of owning a home by 18% according to the researchers. Back in the 1960s, people got married in their early 20s, but with the median age for millennials getting married at 30 years old, home ownership is being put on the back burner.

Since leaving home and getting married are happening later, it follows that so is having children. Having a child is a big life event that increases the chances of your buying a house by 6%, according to the researchers. But many millennials are happy to reproduce later or not at all.

2. Student debt is making it difficult to get a mortgage

Why are millennials not buying homes? A major reason is because they’re saddled with large amounts of student debt. The higher the debt, the researchers at the Urban Institute found, the lesser the chances of home ownership. For example, if a millennial’s debt went from $50,000 to $100,000, their chance of home ownership declined by 15%.

Trying to service a mortgage while paying off a student loan is difficult unless you’re earning a sizeable wage, and even then you may not qualify for a loan. After the Global Financial Crisis, banks tightened their lending criteria so large debts, like a student loan, are directly affecting millennial credit scores.

3. Rent in pricey locations

Millennials are also renting, not buying, in pricey inner city locations because they don’t want to live way out in the suburbs where they have fewer job opportunities. This means it’s harder for them to save up for a down payment on a home because a large portion of their paycheck goes to rent. The trendy locations they want to live in are also out of their reach to buy in because house prices have risen since the financial crisis. Indeed, the rise in house prices is one of the key reasons that inflation for millennials has been higher than for other generations.

When weighing up renting vs. buying, millennials are choosing renting as their best housing solution because it’s cheaper. They’ve also witnessed firsthand during the financial crisis how owning a home is not always the best option for investing your money.

4. Renting is more their style

For millennials, renting instead of buying allows a more flexible lifestyle. Millennials enjoy less job permanence, so it’s much more attractive to rent an apartment than take out a mortgage.

Owning a home can also take up valuable spare time (and money) in repairs and maintenance. An upside of renting that millennials love is having a landlord to pass home maintenance issues onto and not having to worry about those extra costs.


With millennials delaying marriage and children and dealing with high student debt and high house prices, it’s not surprising that they’re weighing up renting vs. buying and choosing renting as a more viable option.

Author’s Bio:

Angela Pearse is a blogger for Zumper who frequently combines travel with freelance writing. She’s passionate about Art Deco hotels, historical novels, Netflix, hiking, and healthy living.

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