7 Mind-Blowing Facts about the Millennial Housing Market

Adapted from Steven John June 16, 2019, 10:11 AM for Business Insider

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The housing market looks a lot different today than it did a couple of generations ago.

That's something that more and more millennials, the group between the ages of 23 and 38, are
discovering firsthand every day, whether they're renting their first apartment or already on to their
second purchase of a house.

Why is the housing market so different for millennials compared to the one their parents and
grandparents faced?

In large part it's because of how much housing costs have risen, but it's also because of how much
student debt U.S. student carry. Some 70% of recent university graduates finish school with an average
of $29,800 in debt to repay, plus the inevitable interest; however, some graduate with over $100,000 in
debt.

Faced with these financial challenges, it's little wonder that millennials are buying different types of
homes and in different types of locations than their parents did. And they are buying under different
circumstances, too, often waiting longer, buying before marriage, or living with their parents to save
cash so they don't have to wait years for homeownership.

Here are seven surprising facts about the millennial housing market that put it in perspective.
1. Millennials face house prices 39% higher than their parents did in the 1980s.
Housing prices have soared by nearly 40% in the past 30 years, far outpacing wage increases and
making homeownership much more of a challenge for today's buyers. The increase is even more
dramatic the further back you look: Today's average home price is more than 70% higher than
what a buyer faced in the 1960s.

2. Rent prices are up nearly 50% over the last half century.
While traditionally renting an apartment or house while saving up to buy your own residence
was once a logical approach, since the 1960s, average rent rates have increased by
46%, meaning just affording a rental is harder than ever, let alone saving up to buy.

3. Many millennials turn to 'super commuting' to find homes they can afford.
Super commuters are those who travel more than an hour in each direction to and from home
and work. In order to find homes that they can afford, many millennials are buying homes in the
exurbs and accepting a daily commute of two or more hours.

4. 33 of the nation's top 50 housing markets saw increases in millennial home buying.
Contrary to the misconception that fewer and fewer millennials are buying homes in major
metro areas, the majority of the nation's top 50 housing markets have actually seen increases in
millennial homeownership in recent years.

5. In some markets, homes built before 2012 are selling at close to 50% discounts because they're
too big and spacious for millennials.
Most millennial homebuyers are looking for smaller, more manageable properties than the mini
mansions so popular a generation before. And they like sleek, simple interiors. The result is
a steep drop in the value of many of the homes baby boomers are now hoping to sell as they
downsize after emptying the nest or retiring. In fact, according to the Wall Street Journal, homes
around Scottsdale, Arizona, that are worth millions of dollars are selling at discounts of close to
50% because younger buyers aren't interested in all that space.

6. One in three millennial homebuyers tapped into a retirement account to get cash for the
purchase.
About a third of millennial homebuyers took money out of a retirement account or even took a
loan against the account to pay for the purchase. This trend alarms financial experts, who advise
people to be paying into these accounts during these younger working years, not depleting
them.

7. Nearly two thirds of millennial homeowners have regrets about their purchase.
According to CNBC, 63% of millennial homeowners report some degree of buyer's remorse.
Their most common complaints are miscalculating the hidden costs of the purchase, like
increasing real-estate taxes, and the ongoing expenses the home demands.