First-time homebuyers are renting for an average of six years before they buy, more than twice as long as in the 1970s, according to online real estate marketplace Zillow.
Plus, the average first-time homebuyer is older — around age 33 — and more likely to be single than in the past, Zillow reported on Monday.
When they finally purchase homes, new buyers are spending a greater portion of their incomes, the report said. In the 1970s, first-timers bought homes that cost 1.7 times their annual incomes. Today, they are choosing homes that cost 2.6 times their wages.
Studies have shown that millennials — young adults born after 1980 — are delaying many milestones, from marriage to having children, “so it makes sense they would also delay buying a home,” Zillow Chief Economist Svenja Gudell said in a release.
But she noted that their lack of homeownership isn’t because they don’t want to own; it has more to do with an inability to save for a down payment while paying high rents and making student loan payments; to qualify for a mortgage in an era of tight underwriting standards; and to find an affordable home amid the sparse for-sale inventory in their price range.
Still, a recent survey by Bankrate noted that millennials with student debt are more likely to put off buying their first homes than they are to postpone marriage, purchase cars or make other major decisions.
Gudell predicted that once millennials begin to have children, they will become homeowners.