5 Ways Millennial Homebuying Radically Differs from Other Generations

You’re not imagining things: Just about half the millennials you know arehouse huntingright now (despite the ebb and flow—though mostly flow—of mortgage rates). They make up roughly 41 percent of homebuyers, according toZillow, and if you’ve talked to any of them, you’ve probably noticed the struggle to find something affordable is all too real. Like their parents, nearly half of millennials are eyeballing larger abodes in the suburbs, but that’s where the comparison ends. Times have changed, and so has the approach tobuying a hometoday, particularly for those born between 1981 and 1996. Here’s how—and why.

As millennials bemoaned the sudden spike in mortgage rates—nearly doubling since the start of the year, though this August they’ve started to drop slightly—many of their parents were quick to say, “Hey, 5 or 6 percent is nothing compared to the rates I paid for my first house!” They’re right:Freddie Mac datareveals an average of 16.63 percent back in 1981. But housing prices overall have skyrocketed since those days (the median home sales price in 2022 is$440,300, compared to $69,400 during this quarter in 1981). Plus, given how many millennials are new homeowners (meaning they haven’t had as much time in a house to make payments on it), they’re the generation with the highest mortgage debt overall, with11 percent more debtthan the average homeowner.