Will millennials ever be able to buy a house?

To find more affordable homes, the younger generations appear willing to take some action, according to the survey. Sixty-nine percent (69%) of millennials and three-quarters of those in Generation Z said they would relocate to another state to afford a property, even if the area itself was less desirable. They are also willing to pay a discount price for a fixer upper.

Why are millennials not buying houses?

Fewer millennials are buying houses compared to previous generations. A 2019 survey conducted by Fannie Mae found that more than half of millennials and Gen Zers (55%) feel that homeownership is financially out of reach. The costs of mortgages, tighter lending standards, and personal financial problems were all cited as contributing factors.

At the top of the list is the high cost of housing. The median existing home price rose to over $350,000—an all-time high—from $329,000 just a few months prior, according to the National Association of REALTORS. Inflation, housing shortages, low interest rates, and the rising costs for building materials all contribute to the rise in the cost of housing.

Next is the high levels of debt many millennials carry. Nearly three-quarters of millennials are saving for future goals and life milestones—which includes saving for a home—according to the Bank of America’s 2020 Better Money Habits Millennial Report. Unfortunately, more than three-quarters of millennials are also struggling with debt, which makes it near impossible to have enough for a down payment on a property.

Finally, tighter lending standards are preventing millennials from entering the housing market. While mortgage rates are low, the standard for lending has tightened significantly since the 2007-2009 recession. Mortgage credit availability dropped in June 2021, according to a Mortgage Bankers Association report. Another indication that lending standards are getting tighter is that the Mortgage Credit Availability Index fell by 8.5% last June.