About 75 million Americans born between 1981 and 1996 (the Millennials) are following the Boomer generation (1946 to 1964), albeit with somewhat different attitudes, slower wealth accumulation, and delayed home ownership.

Millennials are reputed to be a generation that is highly educated, self-confident, technologically savvy and ambitious.  Others have reported a tendency to being entitled, narcissistic, seeking constant approval, and lightning-fast promotions up the corporate ladder.  Millennials generally have more respect for the military and financial institutions than the general population does.  That is a surprise, given their families’ rough experience in the great recession.

Thirty-five percent of the U.S. workforce are Millennials, substantially more than the 41 million Boomers, who of course we are heading toward retirement.  The median inflation adjusted income in a Millennial household was $69,000 in 2017.  Earlier generations had more time to develop their career and earn more; Boomer households ($77,600 in 2017), and Gen-Xer households ($85,000 in 2017).  Wages and salaries rose by 3 percent in the 3rd quarter of 2018.

The recent abundance of jobs helps all age groups improve their income, especially those in STEM fields and those with college diplomas.  As well, wages are slowly increasing after years of stagnation.  Among Millennial couples, both usually work, giving the household a boost in saving toward a down payment for a home, or in paying off college debts, a burden that earlier generations suffered lightly.

Among Millennials, 89 percent plan to purchase a home in the future, but student debt holds them back.  In five years, 23 percent of Millennial college graduates without student debt can save enough for a down payment but only 12 percent of those paying off student loans can save a down payment in five years.

Reliance on money from relatives is cited by 19 percent of Millennials as their strategy for amassing a down payment.  Millennials earning $100,000 or more are counting on $50,000 or more from relatives. Millennials earning $25,000 or less expect only $5,000 in help.  The median Millennial has $2,430 in savings and many Millennials have nothing saved.  Their meagre financial assets suggest most Millennials will be unable to buy a house any time soon, even with help from relatives.

Unfortunately, the price of a home is not a static target.  “The CoreLogic HPI Forecast indicates that home prices will increase by 4.8 percent” in the year ending October 2019.  The situation may be even more challenging because Millennials’ favored locations are in places where home prices are escalating more than average.  For example, home prices in San Francisco, Las Vegas and Denver, grew by 8.3 percent, 12.6 percent. and 12.1 percent respectively over one year.

High new home prices and mortgage rates are blamed for a widespread drop in demand.  Mortgage interest rates increased over the past year.  “Shortages of labor and building lots, along with rising regulatory costs, have led to a slow recovery in single-family construction.”  Some believe that home prices in popular markets will decline during 2019, making a near term buy risky.  That could add to Millennials’ reluctance to buy, especially those who watched their family suffer deep declines in home prices during the great recession.

Millennials may still want to buy a home, but there are factors that could make them wait even longer.