How exactly do millennials buy a house?

If you believe the hype, millennials will never be able to buy homes. The boomers think it’s because they consume too much avocado toast and designer coffee, but millennials will point out that the reasons are less personal and more systemic.

The median price of a home in the US in 1950 was $7,354. The median household income that year was $3,300. In 2022, the median price of a home varies greatly from state to state, but in California, for example, it is $505,000. The median annual household income in the state is $80,440.

While many boomers could buy a home worth a little more than twice their annual income, millennials think the average home is more than six times their income.

Of course, this doesn’t tell the whole story. Many workers’ incomes are much lower and high rents make it increasingly difficult to save a down payment. A 2020 study reported that there was no longer a single US state where workers with average hourly wages could afford the rent of a one-bedroom apartment (by the definition of “affordable” as no more than 30% of monthly income in rent), and it doesn’t get any easier.

But somehow millennials make it work. In fact, according to a recent report from the National Association of Realtors, they are the fastest growing segment of the home buyer market. So how exactly do they manage it?

They buy later

They have to save the necessary down payment, but they also get married later and later have children, so that the rent/roommate model (as well as the living at home model) continues to work well for longer. Pew research has found that only 46% of millennials are married, compared to the marriage rate of 83% of the silent generation at the same age, the marriage rate of 67% of early boomers of their age, or the 57% of Generation Xers .

They avoid rent

Many millennials will say that high rents are the number one reason they will never be able to buy a home, and it’s true that rent costs in most areas have risen far too quickly to keep up with wages. So for many, the only way to save a down payment is to minimize or avoid that rent. Perhaps that’s why 52% of adults between the ages of 18 and 29 live with their parents. This percentage of adults living at home is quite unusual in the US. It is perhaps telling that the last time it was recorded as (almost) this high was during the Great Depression.

The Wall Street Journal recently reported that many millennials are creating residential communities with friends because it’s simply not affordable to buy a home as a single person. To be fair, this makes perfect sense for many of those who decide to give up marriage and parenthood or put it off indefinitely.

Being single is expensive in many ways, and splitting home ownership with someone else can cut not only your down payment and mortgage in half, but many other living expenses as well. It makes sense, of course, to have a basic legal agreement about what happens when and whether one of you wants to sell.

Another thing that older generations of millennials criticize for is using the “Bank of Mom and Dad” to get a down payment, but the reality is that for many average-salaried people, it just isn’t practical to use the ridiculous save amounts needed to climb the housing ladder in some cities.

There are pros and cons to using a gift from parents or other relatives as a down payment on a house, but it is certainly becoming more common. And it’s not just the very rich who help their children. In fact, it becomes a way for middle-class families to “advance” a legacy. Parents who have finally paid off their 30-year mortgage and who are happy to downsize the family home after the family leaves the nest often use the proceeds to help their children enter the housing market. It’s really the only way some of them will ever make it happen.

Millennials were never really kept out of the housing market by avocado toast and lattes. The picture was always bigger than that and the problems more systemic. But they make it work. In one way or another. This means that the market for retail housing is still very much alive for the time being.

Karen Banes

About the author

Karen Banes

I am a freelance writer specializing in online business, personal finance, travel and lifestyle. I also work as a hired content creator, helping brands and companies tell their stories, grow their audience and reach their ideal customers. I have lived, worked and studied in six countries on three continents. Visit my blog to learn how to run your own (very) small business on your own terms. You can also contact me on my website or follow me on

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