Millennials own far less real estate than their predecessors, and it means an entire generation could have lower lifetime wealth, experts say.
Data from the Federal Reserve shows that when baby boomers reached their median buying age of 35 in 1990, they owned around one third of all U.S. homes, in terms of overall value. But in 2019, with millennials now at a median age of 31, they own just 4% of all U.S. real estate.
That figure is likely to rise by the time the millennial median age reaches 35, but analysts say that the generation is unlikely to hit 30% of market share, or even 20% as Generation Xers did, by that time.
“We’re looking at a generation that will have lower lifetime wealth”, Jenny Schuetz, a housing policy expert at the Brookings Institution, told The Washington Post. “That’s bad news for the economy overall, not just millennials.” Homeownership has long been a traditional builder of wealth to the middle class, she adds.
One problem is that millennials are increasingly being priced out of housing markets. In many parts of the U.S., the median home price is way beyond the average salary. Moreover, millennials have greater debt than previous generations did, and that means many are unable to save for a down payment to put on a home. For example, households headed by people aged under 35 saw their average debt increase from $21,000 in 1989 to $39,000 in 2016. And in that time frame, student loan debt has more than doubled.
Experts say the best step for many millennials may be to obtain financial assistance from their parents.
“Millennials whose parents are sitting on lots of housing wealth will have an easier time paying for college or coming up with a down payment,” said Schuetz.