Millennials have a notoriously low homeownership rate, which despite inching upward in recent years, is far lower than the rates of previous generations at the same age. The Urban Institute finds that a variety of factors contribute to depressed homeownership among young adults, including a propensity to delay marriage, increased student loan debt, lack of affordable housing, and geographic preferences. According to the latest data from the U.S. Census Bureau, the national homeownership rate is 63.9 percent. For millennials, the homeownership rate stands at just 39.5 percent.
Recent evidence shows that millennials are fleeing large, more expensive cities for more affordable, smaller locales. While millennials helped boost urban growth after the Great Recession, in recent years, the population of older millennials and younger Gen Xers has declined in these cities. The COVID-19 pandemic may continue to fuel this trend as dense city living becomes less attractive. Additionally, the economic and financial uncertainty that many Americans now face will make buying a home in pricey, large cities less feasible.
While the millennial homeownership rate is lower overall when compared to older generations, the rate varies widely across cities and states based on cultural factors, as well as living costs and job market conditions. At the state level, the Midwest claims the highest rates of millennial homeownership—Iowa and South Dakota have the highest homeownership rates among millennials in the country at 53.7 and 51.5 percent, respectively. Conversely, Hawaii, California, and New York have the lowest millennial homeownership rates—all below 30 percent.
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