Millennials are finally catching up with older generations in this important measure
Millennials are less likely to own a home than the previous two generations — especially in the Bay Area. But that may be starting to shift.
Just 30% of millennials in the San Francisco metropolitan area owned a home in 2023, data from the U.S. Census Bureau shows. That put them far behind the 55% of Generation X and 62% of baby boomers who owned their home — an especially large gap compared with most other large metro areas.
But older millennials are starting to catch up with their predecessors. Millennials born toward the earlier end of the generation's 1981-96 range — those in their early 40s — are achieving homeownership at nearly the same rate as Gen X did at the same age, at between 40% and 50%. Gen X is defined as people born from 1965 to 1980.
That thinning gap is true for both the U.S. and California specifically, an analysis of census data by Apartment List shows. But both generations trail baby boomers, who were born from 1946 to 1964. And with home prices and interest rates still high, experts acknowledge that some millennials may feel left out of their peers' recent rise in homeownership.
'It's all going to be shifted later,' said Eric McGhee, a researcher at the Public Policy Institute of California. 'Your first home is going to be later in life than it did before, because it's going to take longer to save up for a down payment. (And) you're going to have a higher income to afford a mortgage.'
The Census Bureau's Current Population Survey doesn't include people who live in institutions such as hospice facilities and nursing homes. That could make some baby boomers' homeownership rate seem somewhat higher than it truly is.
But that generation was indeed much more likely to own a home than Gen X or millennials — especially in the most expensive parts of the country. In the San Francisco metro area, baby boomers are more than twice as likely as millennials to own their home. In the Minneapolis metro area, most millennials are homeowners, and boomers are just 1.4 times as likely as those younger neighbors to own their home.
It takes people in California much longer than those in most other states to own a home, according to a 2023 report by the UC Berkeley Terner Center for Housing Innovation. That wasn't the case before the 1970s, when a wave of restrictive zoning laws in California led to a major slowdown in housing construction — even as its population swelled — and prices began to rise rapidly.
Millennials and Gen X were also hit hard by the 2007-09 recession, causing some members of Gen X to lose their homes and leading to a weaker overall economy for millennials entering the job market, said Rob Warnock, a researcher at Apartment List. In other words, millennials may be catching up, but they're catching up to a generation that had homeownership struggles of its own.
The pandemic was another blow for many millennials, also known as Generation Y. Some were able to buy a home before prices and interest rates surged, leading to a wave of wealth for the generation overall. But many others were left out — and could continue to be.
'Both of those things are true,' Warnock said. 'We see the generation growing (in homeownership). We also see the generation kind of falling behind.'
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