Did you know that Millennials are the largest living generation by population size? With nearly 80 million Millennials in 2016, and Millennials being anyone age 19-35 during that time, the group should be dominating the housing market.
Fact: Millennials Dominate the Rental Market
Unfortunately, Millennials are way behind when it comes to homeownership. According to data from Pew Research Center, as of 2016, Millennials headed only 28 million households. That’s significantly fewer than their Generation X predecessors (ages 36 to 51 in 2016) as well as their parents’ generation, the Baby Boomers (ages 52 to 70).
According to the latest statistics, in 2016, Millennials headed 18.4 million of the estimated 45.9 million households that rent their home. By comparison, Generation X and Baby Boomers were renting only 12.9 and 10.4 million households, respectively. Of the households headed by a member of the Silent or Greatest Generation, 4.1 million were renters.
Not only are Millennials less likely to own their own homes, Pew Research also found that many still live under their parents’ roof. There are also a large number of Millennials who reside in college dorms, or in a rental home with roommates, indicating that Millennials are relying more heavily on shared income to afford their lifestyle.
So, why is the largest adult population not heading the largest number of households? The answer is anything but simple. Tight real estate inventory, burdensome student loan debt, stagnant wages and skyrocketing rent all contribute to an economic environment that isn’t conducive to homeownership among young adults. However, as the economy improves and more homes (particularly starter home) enter the market, industry professionals are hopeful that Millennials will finally live up to their homeownership potential. Until then, economists and analysts are observing the Millennial population carefully, looking for clues as to how and when (or if?) this massive generation makes the shift to homeownership.
Fact: More Millennials are Living in Poverty
Meanwhile, there’s another issue to contend with. The latest available Census Bureau data indicate that a troubling number of Millennial-run households are living in poverty. In fact, more Millennial households are in poverty than households headed by any other generation. In 2016, it was estimated that 5.3 million of the nearly 17 million U.S. households living in poverty were headed by a Millennial. By contrast, 4.2 million were headed by a Gen Xer and 5 million were headed by a Baby Boomer. It should be noted that the large number of Millennial households in poverty is partly due to the fact that the poverty rate among households headed by a young adult has been rising over the past 50 years while dramatically declining among households headed by individuals 65 and older. Millennials are also more racially and ethnically diverse than other generations, with a greater share of their households headed by minorities. Statistically, minorities tend to have higher poverty rates, according to Pew Research.
Fact: Millennials Head More Cohabiting Couple Households
According to the research, for the past five years, Millennials have headed more households made up of unmarried couples than any other adult generation. By 2016, Millennials were heading 4.2 million of an estimated 8.3 million cohabiting-couple households. This trend reflects a shift in social norms (Millennials are more likely to live with a romantic partner than earlier generations) and attitudes on marriage. According to Pew Research Center, in 2012, among women ages 25 to 29 who were living with a spouse or partner, 37 percent were cohabiting. By contrast, in 1987 – when Baby Boomers were at a comparable age to Millennials – only 10 percent of 25 to 29 year old women in a union were cohabiting.
More Facts About Millennials:
- In 2016, Millennials surpassed all other generations in number of household heads who were single mothers.
- Millennials in 2016 also became the generation with the largest number identifying as multiracial.
- There’s a myth that Millennials are over educated and underemployed. In truth, about two-thirds of Millennials age 25 – 32 lacked a bachelor’s degree in 2014, according to a 2014 NPR special report.
- Millennials make up 42 percent of all home buyers, first-time or not, according to a report from Business Insider and Zillow.
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