Debt and Rent Burden Keeping Millennials From Homeownership
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 Curbed. A 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.