The Millennial Homeownership Rate Is About the Same as it was 25 Years Ago

Somebody asked recently about the homeownership rate among millennials. I’ve posted about this before, but the chart had too little detail to really see what’s going on. So here it is:

You might be surprised that the homeownership rate among young familes is nearly the same as it was in 1994. But you shouldn’t be. It’s true that home prices have gone up a lot in the past couple of decades, but remember two things: (a) prices have truly skyrocketed only in a small handful of hot cities, and (b) mortgage interest rates have declined a lot. Back in 1994 your 30-year loan came with an interest rate of over 9 percent. Today it’s a bit over 4 percent.

When you take mortgage rates into account and look at monthly payments as a percent of income, prices have been steadier than most people think. Here it is nationally:

The average monthly home payment has stayed remarkably stable since 1994. Here are average monthly payments for three big cities:

In order to calculate monthly payments as a share of income, I used income figures that are averages for the whole country since that’s all I’ve got. However, it’s worth noting that average incomes are higher in big cities, so the percentage of income it takes to buy a home is actually significantly less than these charts show. But the important thing isn’t really the absolute percentage anyway, it’s the change over time, and these charts show the change accurately.

Bottom line: Average monthly payments are up about a third in Los Angeles, but down a bit in New York and down a lot in Atlanta. With the exception of a few super-hot cities like San Francisco and Seattle, young buyers today face about the same cost to buy a home as young buyers of 25 years ago. So it’s not that big a surprise that homeownership rates among millennials aren’t really very different than they were among Gen Xers in the 90s.

POSTSCRIPT: Home prices are based on HUD data for the national series and on Case-Shiller indexes for the three city series. I assume a 10 percent down payment. Mortgage rates are from Freddie Mac. Median household income for 25-34 year-olds is from the Census Bureau.


Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

payment methods

We Recommend