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Are Millennials Buying Houses?: Barriers To Housing

Millennials buying houses may seem like an unobtainable goal. However, there are many ways around the obstacles put in front of my generation to buy a house.

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Forge Your Wealth is meant for education and entertainment and should not be used for financial advice.

In a previous post I have brought up behaviors of millennial spending. Millennials are spending more on food prepared by others than retirement and investments. Unfortunately, this has affected our ability to buy houses. So far my generation has a rate of home ownership that is 8% less than generation Xers and the baby boomers. These behaviors are not the only reason millennials are not buying houses. Many circumstances are preventing millennials from buying houses although our behaviors also play a role.

Student Debt

Student debt has increased significantly from previous generations. I keep hearing reasons for this increase from the education system is greedy to colleges are providing more to more people. So let’s break this down a little bit.

Millennials Are More Educated Than Other Generations And We Got More From It

According to the Pew Research Center, 67% of my generation has gone to college. This is comparably higher than Generation X, which had 57% of that generation attend college. It is also much higher than the baby boomers and greatest generation which had 46% and 28% of those generations respectively attending college. That alone shows that there is more demand for higher education and that would raise the price.

I have heard before that the increase in cost does not match the increase in inflation. But there are still many other factors. These include the fact that millennials have more accommodating living quarters than previous generations and more out-of-state goers.

Student Debt Needs To Be Paid

Regardless of whose fault it is for the larger student debt, the debt needs to be paid off. The value of a college degree has increased, but the time required to pay off a degree has not really changed from 10 years. In fact, if anything it decreased. So do the math, higher costs, same time to pay it off, millennials are spending more in the moment to pay off student loans. If we spend more to pay off the loans we will not have as much to save up to buy a house. Therefore, millennials are not buying houses, or at least not as early as previous generations have. Give it a few more years, that should be expected. In fact, the trend that millennials are not buying houses is being reversed now. In fact, most millennials are yet to approach 34, the median age of buying a house.

Fewer Starter Houses

I have previously mentioned how the median price of a house is now over $300,000. Houses have always increased in value, one of the main reasons is that they have gotten larger. These types of houses are not starter houses as much as they are mc-mansions

But there are plenty of starter houses for millennials to be buying, right? Unfortunately, no. There are considerably fewer starter houses available and they in turn are pricey. That is pretty basic supply and demand.

More Mandated Costs

People now have to purchase items and services that were luxuries before. Health insurance is a big one to mention. The Kaiser Family Foundation and Health Research & Educational Trust shows that after mandated health insurance was required by the Affordable Care Act has increased worker contributions to health insurance by 83%. Furthermore, car insurance rates have increased and you cannot have a car without it.


Strangely enough too, renting has increased in cost. I previously brought up that more people in my generation are spending higher than the recommended 30% for residential expenses. There is a lot of blame to go around for this, and some of it is for the millennial generation too. However, most of the blame has to go to the real estate market. Unfortunately, the only residential units that are being created are luxury units. Do you know what luxury means? No, seriously, I would love to know what this word means. Apparently, I would have to spend hundreds more a month, maybe even thousands more for “luxury” each month. Am I stupid or is there a GOOD reason most apartments advertised needs to be a luxury unit?

The only construction for apartments I see anymore have bill boards that say “new luxury apartments under construction.” The only affordable apartments I see anymore seem to have been rooms on top of shops that were transformed for a tenant. Even a building right next to me in which had affordable apartments have been renovated into “luxury” apartments in which now cost hundreds extra.

Whose Fault Is This?

Why is this happening? One is because apparently, my generation, at least at first, does prefer luxury apartments. Sure, millennials say they want affordability, but they also say they want high ceilings, gyms, pet-friendly apartments, social spaces, and walk able distances from great restaurants and bars. I do not think millennials know what is required to be affordable, namely compromise. Sorry fellow millennials, but colleges would not have spent so much for luxury suites if that was not the case.

These are two pictures of apartment complexes. The one on the left is mine and is considered “affordable.” The one on the right is a luxury apartment complex literally half a block from me and the cost is hundreds more than my own. There is next to no difference, in fact I had to quadruple check to make sure they were not from the same company. They are not.

Differences Between Affordable Apartments And Luxurious Apartments

  • Traits of affordable apartments
    • Have basic amenities including kitchen. A dish washer and laundry will not always be among them.
    • Bathroom in private area.
    • Basic floor plan.
    • Bedroom may or may not exist.
    • Little if any view.
    • No real social areas or gyms.
    • May or may not be pet-friendly.
    • Not necessarily close to restaurants nor bars.
  • Traits of luxury apartments
    • Have basic amenities and maybe one or two extras.
    • Bathroom in private area.
    • Basic floor plan.
    • Bedroom may or may not exist.
    • May have a view.
    • Gyms and social areas may be provided.
    • May or may not be pet-friendly.
    • Close to restaurants, bars, and other social areas.

The lists above show that there is very little difference between affordable and luxury apartments. The little difference can add up to hundreds or even a thousand in rent every month. Despite the larger construction of luxury apartments it is almost entirely up to you if they are worth that price.

The second reason, and probably more significant, is zoning laws. My old apartment, one of the only ones worth ~$450/month with utilities aside from electricity is now closed and has had a zoning notice outside the door. Not a health issue, not asbestos, zoning. This is speculation, but I believe zoning is 95% based on how sightly these new projects will be. People hate construction, especially if the construction is not very good on the eyes. Affordability does not care much about looks. Unfortunately, with so many jobs in cities and limited space, real estate has to add the luxury tag to their products just to make a profit.

Apartment Loans

You read the heading right. There are loans people take to rent out apartments. Not to own property, but just to live in someone else’s property. Some of these are given mostly for young people starting in their career like me (no I did not get one).

This is unacceptable. It does not matter whether this is because millennials want to be “close to the action” or because there is no other choice.


The Great Recession of 2008 was one of the toughest financial downfalls in all of history. It was tough. I remember it being tough to get a job when I was in high school and college. Luckily, that was the most I was personally affected. There are many more horror stories I have heard about the Great Recession.

It is debatable if we have truly recovered from the recession, but the economy has grown since then. There was definitely a formation of jobs (the quality of these jobs is debatable). Wages may have stagnated, but they have not decreased. “Affordable” apartments would be hard to afford otherwise.

Despite this fact, the millennial generation definitely had a slump when the oldest millennial started their career.

What Can We Do?

Let’s Assume No One Will Help You

As hard as it is to believe, I do see how external forces make it difficult for millennials to buy houses and I feel sympathy for that. Heck, I was affected by these external forces.

I have heard it all, the government is corrupt, people are greedy. Yes, I know, let’s move on and take control of what is within our power otherwise our efforts will be wasted.

Student Debt

As for college, there is not much we can do to lower the price of college. Most of my generation is out of college. However, there are repayment programs the government implemented to help college students pay off their loans. They had to do one thing right about federal subsidized college loans.

As much as paying off student loans depresses people, they need to be paid off. Some are hoping for student loan forgiveness, the government has implemented some programs to help people pay off their loans with little success. So far individuals have done more to pay off others student loans fully than the government. That may change, but in the mean time, do not count on it. The track record shows that you have less than a 1% chance of the government paying off your student loan and that is assuming you even fit within certain demographics.

Fewer Starter Homes

I know several individuals who have hired people to build starter homes. This can save money depending on what you can do to build the house and the costs of subcontracting. There are risks to this including the house not being up to code, but you can get a starter home for cheaper.

However, there seem to be too many houses, and not affordable ones. But guess what, if the millennial generation cannot buy houses yet, we cannot buy houses yet. My generation is not the group that should worry too much about that. Real estate companies should be worried. If there are too many houses and they cannot sell them, they will have to lower the prices and lose potential profits. Just basic business. Build us houses we can afford, or we will build our own or rent. When that happens those units better be easily switchable to become a rental.

Higher Costs

Unfortunately, there is not much we can do about mandated insurance except find other options that fit within the mandate. I will bring this up in a future post.

As for rent, you need to be creative with your internet searches to find more affordable apartments or network around the area to find them. Usually affordable apartments are not listed on Zillow or Also, you may have to check Craigslist. I know Craigslist may not be the most secure place to find a home, but I have had limited issues with it. Just make sure that no one is scamming you. Whatever you do, do not get an apartment loan.

Final Thoughts

Millennials are not buying houses as much as previous generations. We do not have much of a choice. Ok, we do. We can liquidate our retirement savings or get subprime loans using one method or another. Ultimately, the choices we have make delaying buying a house preferable. This applies to literally everything. Unfortunately, the choices the millennial generations face are not always as good as previous generations. For example, you can always find an affordable apartment, but it may be in an area where gunshots are weekly events. One of my co-workers actually faces that (she was never a victim though). Whatever you say, do not say millennials know nothing about sacrifice. Truth is I am sick of the millennial stereotype. Do not get me wrong, this stereotype exists for a reason, but there are plenty of millennials who display discipline that screams that any worries the rest of the world has are just wasted efforts.

The millennial generation has faced tough times. Millennials are having a hard time buying houses. I have even heard people say that my generation is the only one that has things worse than previous generations. I do not actually believe that. Not because we do not have tough times ahead, but we have been through so many wars and depressions I highly doubt we are the only generation to face such hardships. Ultimately, millennials will forge their wealth despite these hardships.

Author: Papa Foxtrot

Most of my life I was careful with money and learned where I should invest it. I was very lucky to have parents who taught me financial literacy when I was young. Unfortunately, I am very lucky because many people lack the financial literacy I know. The purpose of Forge Your Wealth is to teach people who are just starting out in life how to obtain their wealth or anyone who just realized they may need to learn more to handle their finances. I currently have a PhD in biochemistry, just started a job in industry (will not disclose where exactly for personal and professional reasons) and am currently married to the love of my life. I am one of the lucky few people in America who graduated with no student debts, my wife was not. Over the series of a little over 3 years we paid for our wedding with no debt and paid off her federal student loans.

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