Millennial homeownership increasing but not keeping pace with the past generations
Census Bureau data shows that 52% of American millennials age 27 to 42 now own homes.
“Millennials have always struggled to buy homes, facing incredible house price appreciation,” said Rob Warnock with the online data center Apartment List. “But at the same time, across the country, there are more millennial households that own homes than rent them.”
The data was broken down in a report, released Tuesday by Apartment List.
Of course it’s a lot harder to buy a home in San Diego than in the rest of the country. Here, millennial home ownership has also increased. But only 34% of them own homes in San Diego, putting it near the bottom of the nationwide standings.
“San Diego has the fourth lowest millennial homeownership rate, according to the latest data,” Warnock said. “So it has been growing but San Diego is there with the other California metros. You know, one of the most competitive, imbalanced, unaffordable housing markets in the country.”
Only Los Angeles, San Francisco and San Jose have lower millennial homeownership rates.
One thing census data also revealed is that home ownership is now at a lower percentage than it was for that age group in past decades. Warnock used the example of millennials.
“Their home ownership rate is about five percentage points lower than Gen X was when they were in their 30s. And it’s about seven percentage points lower than Baby Boomers, when they were in their 30s,” Warnock said.
A recent study of homeownership in Europe, conducted by UC San Diego researchers, shows home ownership is seen as a shield against inflation. A history of high inflation in some countries has led to higher homeownership rates there.
“If people think that real estate is a good inflation hedge then they’re more likely to be a homeowner because they want to protect themselves from that high inflation,” said UCSD economics professor Alex Wellsjo, co-author of the study.
Warnock said homeownership is a good hedge against inflation and in America it’s the primary vehicle for creating family wealth. But more and more, finding a down payment and paying a mortgage is financially out of reach.
“For millennials who do not own a home, we surveyed them,” Warnock said. “And we find an increasing share of them say, ‘I'm never going to own a home. I just can’t afford it.’”
Seventy-three percent of baby boomers in San Diego own their own home. That’s more than double the rate for San Diego millennials and five percentage points lower than the national average.