PROPERTY
This generation is buying houses at an incredible rate, driving prices ever higher in the process
FOR A LARGE NUMBER OF MILLEN-nials, the generation born between 1981 and 1996, the time to buy a home has never been quite right.
Older millennials were not yet 30 when the financial crisis of 2007-2008 upended the housing market and the U.S. economy, causing the worst downturn in the country since the Great Recession. When younger millennials came of age to buy a home, the housing market was booming, driven by high demand and low inventory, with prices reaching heights that were unaffordable to many.
Despite adverse economic conditions, and tired of waiting for the perfect moment, many got on the property ladder anyway—and their late arrival has shaken up the housing market, according to experts.
“Because of the high cost of living, millennials have had to delay marriage ... [and] having children. There’s been a delay in household formation, though right now the rate of household formation is double the rate of population growth,” Phil Powell, executive director of Indiana University’s Business Research Center, told Newsweek.
“That means there is unprecedented demand for housing and that is why housing prices are going up,” he added.
Millennials, said Powell, “are putting upward pressure on prices and it’s going to continue; it’s not a fad or some bubble in the housing market. This is real, it’s demographic.”
They’re not the only generation keeping prices up. Alejandra Grindal, chief economist at Ned Davis Research, told Newsweek that baby boomers (those born between 1946 and 1964) are also adding pressure. “They are the second-largest age cohort in the U.S., and they’re also driving up demand, partly because they can afford to,” she said. In 2020, millennials overtook baby boomers to become the largest generation in the U.S.
“Compared to prior generations,” she added, “[boomers] also plan on staying in their homes much longer. They don’t want to go to assisted living or nursing care; they want to live in their homes as long as possible. Plus, a lot of them would like to own second homes.”
Older Buyers, Higher Prices
Waiting for a better time to buy a home, in 2022 millennials brought up the average age of a first-time buyer to 36, from 33 in 2021, according to the National Association of Realtors (NAR). Sara Coers, a lecturer in real estate at Indiana University, said this generation waited because “they have been much more tolerant of renting, whereas previous generations were much more insistent upon homeownership.” They have also accepted that they have to pay a much higher price for a home than their parents did.
“They are really the victims of freak circumstances,” Coers told Newsweek. “We overbuilt prior
