Homeownership across America is on the decline for the first time since 2017, and millennials are partially to blame

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• The US homeownership rate has fallen for the first time since 2017, reported Laura Kusisto of The Wall Street Journal. 
• Millennials are partially fueling the trend — younger households have struggled as rising mortgage rates, high home prices, and a low starter home inventory have slowed the housing market, Kusisto said.
• Millennials are buying homes later because down payments are pricier, they’re bogged down paying off student debt, and they’re delaying milestones that precipitate homeownership.
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Millennials are one of the driving forces behind declining homeownership across America.

For the first time in two-plus years, the US homeownership rate has fallen, reported Laura Kusisto of The Wall Street Journal. It decreased from 64.8% in the fourth quarter (near the 65% historic average) to 64.2% in the first quarter, Kusisto reported, citing new data from the US Census Bureau. 

While millennials had been fueling the steady growth in homeownership since 2017, they saw "some of the steepest falls," according to Kusisto — the homeownership rate of households headed by someone younger than 35 fell from 36.5% to 35.4%.

In the last six months of 2018, she said, rising mortgage rates, high home prices, and a shortage of starter homes have slowed the housing market. Essentially, an increasingly expensive real estate market hasn’t left millennials much choice but to delay homeownership.

Back in 2017, Spencer Rascoff, Zillow’s CEO, told Business Insider that "the whole real-estate industry now is characterized by extreme scarcity and inventory." 

Two years later and it’s still a seller’s market, according to Zillow. This causes home prices to shoot up, leaving minimal inventory at the middle and low end of the housing market, Rascoff said.

Read more: Millennials are making 3 key decisions that are wiping out the starter home — and it’s changing what homeownership in America looks like

It’s an endless cycle; as a result of a limited starter home inventory, millennials are renting longer, Rascoff said.

Homes are 39% more expensive than they were nearly 40 years ago, according to Student Loan Hero. And a report by SmartAsset found that the median-priced home outweighs the median income by so much in some cities that it could take nearly a decade for someone with median income to save for a 20% down payment on a median-priced home.

It’s even harder to take out a mortgage for millennials who have student loan debt, which has hit record levels — the national total student debt is over $1.5 trillion and the average student loan debt per graduating student in 2018 who took out loans is $29,800, according to Student Loan Hero.

Fewer 25- to 34-year-olds are also living with a spouse or partner, Business Insider’s Akin Oyedele reported, citing the US Census Bureau. The data suggests that milestones, like marriage, that often precipitate buying a home are happening later.

But it’s worth noting that while the homeownership rate has fallen, it’s about the same as it was a year ago, according to Kusisto.

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See Also:

• 25 of the top ZIP codes where rich millennials are snapping up homes across the US
• The 22 tallest buildings in the world right now, ranked
• American millennials have less money than other generations did at their age — but studies show an alarming amount of them have delusional ideas about their wealth

SEE ALSO: Millennials have been called the ‘brokest’ and the ‘richest’ generation, and experts say both of those are true

DON’T MISS: 5 millennials who became homeowners in their 20s share their best advice for buying your first house

Source: Business Insider – hhoffower@businessinsider.com (Hillary Hoffower)