Millennials are increasingly looking to settle into homeownership, supercharging the housing market, according to The Wall Street Journal (subscription).
Trend reversal: Until recently, millennials born between 1981 to 1996 spurned home ownership—but since 2019, they have surpassed the baby boomers in number and accounted for more than half of all home purchase loan applications last year. Economists suggest that millennial homebuying demands will remain strong for years to come, although given discouragement about prices and a shortage of homes for sale, some market watchers expect home sales to decline from current levels.
Pandemic sales: The COVID-19 pandemic witnessed a spike in homebuying, concentrating sales that would have taken place over several years into a smaller window. The pandemic economy and the rise of remote work allowed many millennials to trade the expenses of city life for more spacious and economical suburban living. The ability to pause student loan payments, as well as stimulus checks and a booming stock market, gave many first-time buyers a cushion for down payments.
Millennial stakes: The stakes for home ownership may be higher for millennials, who have faced a wider wealth gap than previous generations due to events like the 2008 financial crisis and the subsequent housing market crash. The tightening of credit standards and student debt burdens also inhibited young borrowers in their 20s from reaching their home equity goals.
Racial equity: More Black and Hispanic households are common among millennials than previous generations, although homeownership rates for white households will continue to outpace homeownership rates for nonwhite households in the next decade, according to the Urban Institute. Latino homeownership is growing at a record pace, with the number of Latino homeowners rising to nearly 9 million last year.