The Market Is Harder For Millennials Than It Was For Boomers: Report
![The Market Is Harder For Millennials Than It Was For Boomers: Report The Market Is Harder For Millennials Than It Was For Boomers: Report](https://i2.wp.com/assets.inman.com/wp-content/uploads/2023/03/hero_image-13-1024x576.png?w=780&resize=780,470&ssl=1)
A new report in “The Wall Street Journal” found that baby boomers had an easier time navigating real estate market challenges in the 1980s than millennials do today.
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Millennials face a more difficult homebuying landscape than baby boomers did in the 1980s.
That’s according to a new report from The Wall Street Journal that found a combination of low supply, high demand and high home prices has created headwinds that are stronger than those faced by baby boomers during the time that they were first navigating the housing market.
The result is that fewer young millennials own homes today than baby boomers did at the same age. The income required to qualify for a mortgage is higher than ever. The age of first-time and repeat buyers is going up, and agents are selling fewer homes.
Just 12 percent of consumers believe it’s a good time to buy a house, according to a long-running survey by the University of Michigan that tracks consumer sentiment. That’s even lower than in September 1985, when 15 percent of consumers thought it was a good time to buy.
The income required to afford the typical single-family home with a 20 percent down payment has more than doubled since January 2021, rising by 125 percent to $110,544 in June.
The median single-family home rose to $432,700 in June. Typical monthly payments now take up 26.8 percent of families’ incomes.
Interest rates were far higher in the 1980s, but buyers were more likely to take advantage of ways to avoid paying them, the WSJ noted. Boomer buyers more readily obtained adjustable-rate mortgages or assumable mortgages than buyers today, the report said.
Meanwhile, the typical first-time homebuyer is now six years older than in 1984, when they were 29 years old, the WSJ reported, citing data from NAR.
Nearly 60 percent of baby boomers owned a home by age 33, according to the Federal Reserve Bank of St. Louis. Among millennials, it’s about 40 percent. (The overall homeownership rate is slightly higher today than it was at the time.)
The high prices are in large part due to a lack of available housing supply, as restrictive zoning policies and homeowner pushback to reforms that would make it easier to add more housing have made it difficult for the private sector to meet growing demand.
Existing home sales are selling at an annual rate of 3.89 million. That would be down slightly from 4.09 million in 2023.
According to recent comments from NAR Chief Economist Lawrence Yun, however, better days may be on the horizon for frustrated young buyers.
“Homes are sitting on the market a bit longer, and sellers are receiving fewer offers,” Yun said last month. “More buyers are insisting on home inspections and appraisals, and inventory is definitively rising on a national basis.”
Email Taylor Anderson