Debt and Rent Burden Keeping Millennials From Homeownership

Research from the Urban Institute finds that economic hurdles, not just lifestyle preferences, are stopping millennials from buying homes.

1 minute read

July 23, 2018, 9:00 AM PDT

By Elana Eden

Young Family

Gareth Williams / Flickr

Across the U.S., the decline in homeownership among millennials compared to generations past is marked: "For millennials, ages 25 to 34, homeownership is 8 percentage points lower than [it was for] baby boomers at that age and 8.4 points lower than Generation X," Jeff Anderson reports for CurbedA new report from the Urban Institute asks why this crucial American wealthbuilding strategy appears increasingly unavailable to a generation of young adults, and found that a confluence of debt burden and high housing costs are keeping it out of reach.

In many cases, moving to urban centers for access to good jobs turns out to be a trade-off in terms of a cost of living. In many major cities, rents far outpace incomes and the supply of affordable housing is constrained, making it difficult to save enough to buy a home.

The report also finds that the burden of student debt—which today comes to nearly $1.5 trillion—could account for up to a third of the decline in millennial homeownership. "Buying a home used to be the largest expense a household would make in their lifetime, but over the last 20 years student loan debt has ballooned, loading millennials up with debt before they reach prime home-buying age," Anderson explains.

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