Are Millennials Missing Out On Homeownership?

Over a decade ago, the Great Recession’s impact lingered, and mortgage lenders tightened requirements, responding to a wave of foreclosures. Housing prices fell, yet millennials—aged 13 to 28 at the time—were largely absent from the market. Many were still in school and burdened by rising college debt. However, in the past decade, both home prices and millennial home ownership have steadily increased. What effect has this had on real estate?

In his recent article, Shawn Tully from Fortune discusses how the millennial generation, despite facing economic hurdles, has managed to shift the housing landscape. Although housing was more affordable compared to the previous decade, millennials were hindered by financial instability and, until 2017, were often dubbed the “lost generation” of homeownership. Tully notes, “Millennials had loads of college debt, and many had bad credit,” resulting in limited market participation until just a few years ago. However, by 2021, millennials made a substantial impact, accounting for almost half of all new home purchases. Despite this shift, under-construction rates, high prices, and rising interest rates now appear to be favoring more affluent buyers, such as Gen Xers and Baby Boomers, potentially leading to a decrease in millennial homeownership rates.

This trend raises concerns for housing markets across the U.S., particularly in high-cost states like California, New York, and Florida, where rising property prices continue to shut out first-time buyers, especially millennials. Fortunately, not all millennials are facing these challenges. In Northeastern Pennsylvania, this “lost generation” is establishing itself within the first-time homebuyer market, leveraging more affordable conditions and creating ripples in local real estate.

In Greater Scranton, where absorption rates—the measure of how fast homes sell in a market—stand at 6.34 year-to-date and 5.82 year-over-year, the area is slipping into a seller’s market. Rates of 6 to 9 months indicate balance, while 3 to 6 months reflect a seller’s market, suggesting that millennials’ increased purchasing activity has been a key driver in the area’s real estate shift. Now, millennials are securing homes, establishing roots, and boosting local growth.

As the largest generational group in the U.S., millennials are paving the way toward homeownership, with their stability and family formation aiding in their market participation, especially in areas like Northeastern PA. This trend may bring long-term economic growth to regions they are helping shape, proving that the “lost generation” may be found—one home at a time.