A new report by HireAHelper [1]finds that while only baby boomers faced less affordable rent prices than Gen Xers and millennials, buying a home is out of reach for many millennials as income hasn’t been able to keep up with rising home values.
The report states that rent costs for baby boomers, when they were entering the housing market, were equal to 38.1% of monthly incomes. Rent costs equaled 35.9% for Gen Xers and 35.7% for millennials.
According to the report the average home for millennials is worth 6.4 years’ of income, which is a 15% increase from the 5.6 years’ of income for an average home for booth baby boomers and Gen Xers.
Information from HireAHelper shows that home values and the amount of income needed to buy a home have skyrocketed since 1970.
In 1970 it took 5.18 years’ of income to purchase a home, which rose to 6.76 years’ of income by 2010. Home values have nearly doubled during the same time period, going from $97,100 in 1970 to $218,776 in 2016.
“Other obstacles stand between millennials and their first home purchase: the burden of student debt, stricter home lending standards, and a shrinking supply of affordable housing,” the report states. “Overall, homeownership is far less accessible to millennials than it was to previous generations in their early years of adulthood.”
The report adds that fewer millennials are able to graduate from renting to owning, and that 82% of renters view their current housing situation as more affordable than purchasing a home.
Additionally, millennials live in their homes for shorter periods than prior generations. Millennials report moving every two years, on average, which is twice as often as Gen Xers at four years and three times more frequently than baby boomers who stay in a home for an average of six years.
Seventy-three percent of millennials plan to move in the next decade, compared to just 58% of Gen Xers and 43% of baby boomers.