Millennials Make Historic Switch From Renter-Majority to Homeowner-Majority Generation
By Alexandra Both, Rent Cafe
MARCH 29, 2023
With 52% of Millennials owning a home, the largest generation in the nation transitioned from renter-majority to owner-majority in 2022.
The number of Millennial homeowners increased by 7 million in the last five years, more than triple the number added by Gen X, who came in second.
Millennials remained the dominant renter generation, with 17.2 million renter households.
Gen Z is now the only renter-majority generation with a 74% share and 4.5 million renters added in the last five years, more than any other age group.
Of the nation’s top 50 largest metros, Richmond, VA, saw the highest jump in Millennial owners — 234%.
The pandemic and the evolution of the real estate market during the last few years didn’t suppress Millennials’ appetite for buying forever homes. On the contrary, most Millennials are now sipping their matchas in their own homes rather than in rentals. In fact, this demographic gained 10.8 million homeowners in the last decade, including 7.1 million in the last five years to reach 18.2 million in 2022. This boost tipped the balance in favor of homeownership and made Millennials an owner-majority generation with a share of 51.5%.
As a result, this demographic (also known as generation Y) passed the renter-majority torch to Zoomers: The Gen Z cohort gained nearly 4.5 million renters in the last five years, leading to a renter share of 74%, while all the other generations lost renters. Clearly, Gen Zers are now coming of age and becoming a significant market for apartment builders, reaching 5.6 million renter households in 2022.
Number of folks who own a home
Number of folks who rent a home
See above: To get a clearer view of generational trends in homeownership and renting across the country, we analyzed IPUMS data for the nation’s 110 largest metros (with populations of 500,000 or more). In more than a quarter of these metros, the number of Millennial owners doubled between 2017 and 2022.
The average Millennial bought their first home at 34 years old, later than their parents or grandparents
Due to housing affordability as well as generational values, homeownership happened later in life for Millennials than for Gen Xers or Baby Boomers. When Millennials became an owner-majority generation in 2022, the average Millennial was 34. Gen Xers reached the milestone in 2003, at an average age of 32. Boomers crossed this threshold in 1987, at the average age of 33.
The idea of the American Dream has begun to distance itself from the picket fence narrative. That’s because Millennials are living by other principles and values than their parents or grandparents. However, despite the growing popularity of the renter-by-choice lifestyle, America’s largest adult generation is now mostly made up of homeowners. Whether they bought a home to start a family or as an investment, this demographic cohort counts 18.2 million homeowners and nearly 17.2 million renters. By comparison, Baby Boomers are the largest group of homeowners at 32.1 million versus 9.1 million renters.
Family support fueled homebuying for Millennials
Between 2017 and 2022, the number of Millennial homeowners increased by a whopping 64% to 18.2 million. The staggering addition of 7.1 million households exceeded the number added by all the other generations combined. Gen X recorded only 1.9 million new owner households in the last five years, while Baby Boomers saw a decline of 354,000 within the same timeframe.
For Gen Z, the total number of homebuyers rose by 1.6 million between 2017 and 2022, representing a 455% jump, the highest among all demographic groups we analyzed. Still, homeownership in the U.S. was dominated by Boomers, who totaled 32.1 million owners, followed by Gen X with 24.4 million owner households.
Millennials, who are now in their prime homebuying years, had several economic factors working to their benefit in the last few years, which helped make their picket fence dreams come true. First, Gen Y reached a historically high median income in 2022: $108,000 per year, up 44% compared to five years earlier. This was the most significant income increase among all generations. Gen Z came in next with a 33% rise in median income, followed by Gen X with 25%. Boomers saw an 8% jump.
Second, many moved back in with their parents during the pandemic or delayed moving out entirely. With work-from-home supporting these decisions, many Millennials saw this period as an opportunity to save for a down payment. As a bonus, 59% of Millennial homebuyers also received financial support from their parents for their mortgage down payment, according to a LendingTree survey.
At the same time, the median home price in the U.S. has been on a steady steep climb ever since the lockdown, going from $322,600 in the spring of 2020 to $454,900 in the summer of 2022, according to the Federal Reserve Bank of St. Louis. However, this didn’t slow the housing market as anticipated.
In 2020, the number of Millennial owners increased by 12.6% compared to 2019. In addition, despite the record-breaking home prices during the pandemic, the number of Millennial homebuyers rose by almost 30% between 2019 and 2022. Only Zoomers had a more impressive rise in homeownership in the last three years (157%), but this is to be expected as this cohort is now coming of age and establishing itself in the job market.