Millennials Redefine Homeownership: Solo and Shared Purchases on the Rise
News Mania desk/Agnibeena Ghosh/21st May 2024
Millennials, often perceived as a generation of renters, have made remarkable strides in homeownership over the past few years, with over half now owning homes. However, they are approaching this milestone in ways distinct from previous generations.
A recent report from personal finance site Bankrate reveals that Generation Y is more likely to buy homes independently or with friends, rather than with a spouse, compared to older generations. A survey of over 1,200 homeowners found that more than 40% of millennials purchased homes on their own, compared to 34% of Generation X and 22% of baby boomers. Additionally, 10% of millennials bought homes with a friend or non-romantic partner, whereas only 1% of baby boomers and 3% of Gen Xers did the same.
Older generations predominantly purchased homes with a spouse or domestic partner, with 70% of baby boomers and 56% of Gen Xers following this traditional path. In contrast, only 47% of millennials bought homes with a spouse or partner, highlighting a significant shift in home-buying behaviors.
These survey findings align with broader trends among millennials, who generally carry more non-housing debt, marry later in life, and become homeowners later compared to previous generations. This new approach is reshaping not only the housing market but also broader aspects of American life.
“Women, especially younger, college-educated women, have also made substantial gains in the job market and have increased their buying power over the last few decades,” notes Bankrate analyst Alex Gailey. This economic empowerment contributes to the trend of single millennials purchasing homes.
Affordability and limited housing supply are major factors driving millennials to explore creative solutions, such as co-buying with non-romantic partners. Housing costs have pushed many young buyers to consider buying homes with friends or family members to make homeownership more accessible. Millennials are also the most likely generation to purchase multi-generational homes, according to the National Association of Realtors (NAR).
There has also been a notable increase in the number of unmarried couples buying homes together. In 2022, 18% of first-time homebuyers were unmarried couples, a significant rise from just 4% in 1985, as reported by the NAR. The primary motivation for co-buying is cost-saving, as two incomes can better manage the high costs of homeownership and provide financial stability.
“The primary drive of co-ownership is cost saving,” says Jennifer Patchen, a real estate broker with Opendoor. “Co-buying allows millennials to buy now, securing an affordable place to live in the present, while setting up a solid investment for the future.”
This trend towards co-ownership and single home-buying among millennials is likely to continue if current economic conditions persist. Generation Z, with members now up to 27 years old, may follow similar patterns. “If we continue to see a rising share of single Americans or Americans marrying later in life in the next few years,” Gailey predicts, “I suspect we’ll continue to see these trends with young future buyers.”
As millennials redefine homeownership, their innovative approaches are influencing the housing market and offering new pathways to achieving financial goals. Whether buying solo, with friends, or as unmarried couples, millennials are demonstrating adaptability and resilience in the face of economic challenges, paving the way for future generations.
