Millennials: We can’t afford down payments

More than half of millennials report they cannot afford a down payment, and that is what is delaying their path to homeownership.

According to a recent report from the the Urban Institute, 53 percent of millennials cannot afford a down payment, while one-third of millennials cannot qualify to get a mortgage. Only 37 percent of millennials became homeowners between the ages of 25-34, compared to 45.4 percent of Generation Xers and 45 percent of baby boomers, who became homeowners at that age.

Millennials are getting married later in life or not at all, which may be impacting their ability to afford to own a home. Those married are 18 percent more likely to be homeowners. The report found that the marriage rate for younger adults has fell 13 percent from 1990 to 2015. Millennials are also more likely to live in urban areas, which generally have higher costs associated with them. Additionally, more millennials have higher student debt. While student loan debt can be hindering many millennials, those who do not obtain higher education don’t fare any better. College-educated millennials are more likely to be homeowners compared to those who have received a high school diploma, but not a college degree.

Diversity among young adults may also be a factor. White, non-Hispanic households have a higher rate of homeownership compared to minorities, and there are more minorities among millennials than previous generations. While Hispanics’ rate of homeownership has increased, the rate of homeownership among every other ethnicity has decreased, including white households. Black homeownership continues to decline more than any other group.