Millennials Are Buying Homes In Much Tougher Market Than Their Parents

Millennials make up the largest market of home buyers, but they have much harder circumstances in getting there than other generations have had.
Posted at 9:15 PM, Feb 02, 2022

Many say millennials aren’t buying homes because they aren’t willing to sacrifice, but it may be more complicated than that, especially in today's market.

Homes that wouldn't exactly make someone's wishlist originally are becoming the norm for some buyers.

"It doesn't matter if the home needs repairs or if it's move in ready, they're still giving top dollar," Tashbina Rivers said.

Rivers is a realtor navigating the Atlanta market, where inflation has caused housing prices to rise 9% since 2020. It's the hottest metro in the country, according to Redfin. 

"People are overbidding as much as $50-70K for a home, and then you have the cash investors that are taking over to corporate investors... where millennials sometimes don't even have a chance," Rivers said.

Millennials continue to make up the largest share of home buyers, but they are buying homes later in life than their parents, with the average first time-buyer being about 33 years old. But there is no one reason for this.

First, millennials are coming to the table saddled with student loan debt. According to the Education Data Initiative, more millennials carry student loan debt than any other generation — about $38,000 per borrower. 

They're also renting a lot longer and the cost is much higher, with the average cost of a rental in 2021 being $1203, according to the U.S. Census. In 1981, the year the oldest millennials were born, it was about $271. Adjusting for inflation that’s still only about $831 today.  

"If you have student loan debt and you're facing rising rents as well, it's hard to get your debt to income ratio and check with all of those pressures against you financially," said Jessica Lautz, vice president of demographics and behavioral insights at the National Association of Realtors.

Millennials are also getting married later in life. The median age now for marriage is about 29 for women and 30 for men. In 1981, 73% of home buyers were married couples compared to 60% today. 

Be it dual income or the need to for a larger living space, marriage seems to increase the likelihood of being a homeowner. 

On top of that, millennials today are competing in a so-called seller's market, with less to pick from and higher costs.  

According to, active listings were down 28% in Sept. 2021 compared to the year before.

"Home prices were rising at a double digit pace, and there is a lot of competition for a very limited number of homes on the market," Lautz said.

This is because low interest rates lasted much longer than expected, plus pandemic era work-from-home life allowed people to live where and how they wanted, scooping up homes in areas with more space and lower costs of living. 

Millennial Michael Stanley says he'd been an homeowner before and knew the steps he needed to take.

"I wanted to do some of the things that I, at least at the time, had the understanding needed to be done to position myself for homeownership, starting with, you know, my credit," Stanley said.

Still, navigating this market was tough. 

"Inventory was low again," Stanley said. "I tried a few different things. I looked at land and looked at the possibility of actually building on top of that. I looked at buying an older home and renovating that, and then there was a scenario where I was looking at homes in low-buy areas, areas essentially primed for gentrification. That was where really where I found my niche."

He turned to Rivers for help, joining the 88% of people who purchased in 2021 who used an agent.

Realtors say millennials looking to purchase have to be ready to go big in order to go home.  

"I would just say, you know, think big and stay positive and just be ready to ready for this fight," Rivers said.