Report: The oldest millennials are turning 40 soon, but 58% couldn’t afford a home before they turned 30, and two out of three have no money toward a down payment.
MIAMI – The next time you hear someone griping about “millennials” as a catchall for “young people,” feel free to remind them that the oldest millennials are now nearing 40. They’re old enough to have children and back problems. Unlike their cool Gen Z siblings, they still – gasp! – wear skinny jeans. The youngest millennials are currently about 24 years old – old enough to possibly be on their second or third job out of college.
But that doesn’t mean the generation raised amid the prosperity of the ‘90s is now on solid financial footing. According to the rental website Apartment List, the vast majority of millennials – 58% -– have been unable to purchase a home before turning 30, and nearly two-thirds of those non-homeowners say they have no money saved for a down payment.
More than 18% of millennials surveyed by Apartment List last year say they expect to be lifelong renters – a figure that has nearly doubled since 2018.
And the coronavirus pandemic just seems to be making things harder for aspiring millennial homeowners. Among those who plan to rent indefinitely, 40% say they’ve dipped into their savings or weathered COVID-related income loss in the last year, making homeownership financially out of reach.
Black and brown millennials may have the toughest time buying a home. According to Apartment List, only 20% of Black millennials have purchased a home by their 30th birthday, compared to 51% of white millennials. Hispanic and Asian millennials also trail white millennials.
The pandemic edition of our annual Millennial Homeownership Report finds 18% of millennial renters now expect to “rent forever.” The biggest culprit among “forever renters”? The dreaded down payment, while 1 in 3 value the flexibility.
In Miami, millennials are actually at a further disadvantage. In the South Florida metro area, where the median home price tops $308,000, only 33% of millennials own their own home, according to U.S. Census Bureau data compiled by the home-improvement site Porch. In a separate 2019 survey by Apartment List, only 13% of millennial renters in Miami said they’d be able to save enough for a 20% down payment over the next five years. (And who can say what sort of a wrench 2020 has thrown into that plan?)
Once again, race almost certainly plays a factor. Miami has been identified as one of the toughest cities for people to save money, and almost three-quarters of Black and Latino residents do not have enough savings to cover three months of expenses should they lose their jobs or become unable to work. By one metric, the typical Miamian would need 36 years to save enough money for a proper down payment.
Although Apartment List notes that home prices have risen during the pandemic, it predicts some millennials will take advantage of today’s more remote-friendly work environment and start moving out of major metropolitan areas into more affordable housing markets. While an increasing number of wealthy tech-xiles move to Miami from Silicon Valley, that probably just means more Miamians are on their way out.
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