The Millennial Housing Crisis: Priced Out, Debt-Ridden, and Dreaming of Homeownership
As most know, home prices have skyrocketed, creating a lot of equity-rich individuals. Sellers love this market, and buyers who cannot wait continue to buy. What about those who want to purchase a home but have been priced out from owning a home? Most millennials face this fact, as 1 in 5 say they will never own a home. Millennials cannot afford homes, and many have moved back in with their parents. According to a survey by Propertymanagement.com in December 2022, 1 in 4 millennials live with their parents, and 1 in 8 millennials moved back in with their parents this year. Those who do not live with their parents are rent-burdened, meaning they are spending 30% or more of their total wealth on rent. Why are millennials having such a difficult time in this market environment?
Home prices are increasing at high-speed rates. While part of the reason for this rise has been inflation, low inventory, a long period of very low-interest rates, and increased building costs have also played a significant factor. Another factor in millennials needing help to afford homes is their debt. According to the 2020 Better Money Habits Millennial Report, 75% of millennials are burdened by large amounts of debt. Not only is it hard to get approved when you are already carrying large amounts of debt, but it is also challenging to afford a down payment when you are already making payments. Lastly, most millennials are first-time home buyers, so instead of using the equity they built in their previous home, they need something to offset the cost.
Many millennials will not give up on the dreams of eventually owning their own homes. They work side hustles second jobs, and even receive cash gifts from families to help make it work. The struggle is something that most millennials are facing, but something only a few will be able to get through and fulfill their dreams. I would love to hear your thoughts on this issue. Is this something the readers have noticed as well? What are the struggles that you are facing?
Kyle Camerlinck
561-371-5143
