itemprop=description content=Although some unique, pandemic-related economic factors have contributed to the current state of the real estate market, some of the largest structural factors are generational. Baby boomers are increasingly choosing to age in place as they reach retirement, while millennials—now America’s largest generational cohort—are at a peak age for buying their first or second home. Together, these forces mean that more buyers are competing for fewer homes. This intense competition and rising prices have made it especially difficult for young, first-time homebuyers to make a purchase, though some geographic locations prove more favorable to young adults seeking homeownership than others. Researchers calculated the share of all home purchase loans taken out by applicants under 25 years old in 2022, then ranked metros and states accordingly.
Although some unique, pandemic-related economic factors have contributed to the current state of the real estate market, some of the largest structural factors driving the current market are generational.
Despite the residential real estate market showing signs of cooling off after a historic runup during the COVID-19 pandemic, finding a home remains challenging for many buyers. Intense competition and rising prices have made it especially difficult for young, first-time homebuyers to make a purchase.
Even prior to 2022, homeownership interest has been increasing among young buyers in recent years. The homeownership rate for adults under 25 reached 25.7% in 2020, matching a previous peak from the height of the housing bubble in 2005. Although that figure dipped slightly in 2021, the under-25 homeownership rate sat at 25.4% in 2022, well above rates seen in the 1980s and 1990s.
In contrast, high-cost coastal states including Hawaii and California have much lower shares of home purchase loans from young adults. In these areas, would-be young homebuyers face more expensive homes and higher living costs, creating a higher barrier to entry in these real estate markets.
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