Millennials are the biggest generation in the U.S., with over 72 million people.
But when it comes to buying homes, they’re facing some serious challenges.
The average age for first-time homebuyers has climbed to 38, up from 35 just last year, according to the National Association of Realtors.
So, what’s holding millennials back, and what can they do to finally buy a home?
Why Millennials Haven’t Bought Homes Yet
Most millennials dream of owning a home. In fact, 71% say it’s a big part of the American dream, according to a Bankrate survey. But many feel stuck because of:
- High debt: About 36% have student loans, and 61% say those loans stop them from buying a house. Credit card debt doesn’t help either.
- Low incomes and high living costs: Many millennials are still catching up after the 2008 financial crisis and the recent pandemic.
- Skyrocketing home prices: Back when Gen X turned 30, the average home price was $279,843. Now? It’s around $416,880, according to Realtor.com.
Is It Better to Rent or Buy?
For many millennials, renting is the cheaper option right now, especially in big cities.
Plus, renting gives flexibility, which is important for remote workers or those who don’t want to settle in one place.
But buying has its perks, too:
- Predictable payments: With a fixed mortgage, your monthly payment stays the same.
- Building equity: Instead of giving money to a landlord, you’re investing in your own future.
If you’re deciding between renting or buying, take a close look at your budget.
Compare costs like rent, mortgage payments, and extra expenses like maintenance or homeowners association (HOA) fees.
How Millennials Can Afford a Home
Buying a home might seem tough, but there are ways to make it work:
- Look for down payment help: Many programs can assist first-time buyers.
- Save smart: While 20% down is ideal, most first-time buyers put down just 9%.
- Build financial strength:
- Pay off as much debt as you can.
- Boost your credit score.
- Save for emergencies and your down payment.
The Bottom Line
Buying a home takes time, planning, and patience. But it’s not impossible.
Even with today’s higher mortgage rates, homeownership is still a smart move for millennials who are ready to settle down and invest in their future.
Start small, build your savings, and explore the programs that can help you finally make your dream of owning a home come true!