Millennials Lead the Way in Housing Trends


Millennials have had a big change this decade on home ownership rates. Let's investigate why, in pictures.

Rental Decade

The RentCafe has some interesting stats on Housing Trends for the Decade

US Renters Surpass 100 Million

The number of Americans who rent reached 108.5M in 2018, up from 99.4M in 2010. At the same time, the share of renters now makes up 34% of the general population and is the largest it’s been since 1960, when 36% of Americans were tenants. By comparison, there were 202M homeowners in 2018, up from 189M in 2010.

Renters the Majority Population in 20 Additional Cities

20 U.S. cities made the switch from a homeowner majority to a renter majority in the past ten years, pushing the share of renter-majority cities from 28% to 32%. Renters now make up more than 50% of the population in 82 of the 260 cities we analyzed for this section.

Increases in Number of High-Earning Renters

Nationally, the number of households earning more than 150k per year who rent increased two times faster (+157%) than the number of high-earning homeowner households (+78%) since 2010, as progressively more wealthy Americans choose renting over homeownership.

What About Kids?

Fewer and fewer American families are having children. The number of households made up of families with children has decreased by a noticeable 1.3M since 2010.

Changing attitudes towards child-rearing and affordability issues aren’t only impacting when Americans have children, but also where they live once they do. The decrease in families with children was significantly stronger in the homeowner segment—the number of families with children who own their homes dropped by more than 1 million in the past decade (-5.6%), while the number of renting families with children stagnated (-0.5%).

Renting Increased in Popularity Among Older Households

​The number of aging renter households (60+) went up by 32% in the past decade, while that of aging homeowner households went up by 23%. At the same time, the number of renters under the age of 34 and in the 35 to 59 segments both increased by only 3% and 7%, respectively, while the number of homeowners in these age groups has decreased over the years.

​Millennials Left College Towns for Job Hubs

Most of the millennial population entered the job market this decade, and as the second-largest generation in American history—recently dethroned by Gen Z—they’ve made an impact on the cities they studied and now work in. If in 2010, the first ten cities with the highest share of millennials were college towns, in 2018, they had been replaced by job hubs.

Cambridge is the exception to the rule. The home of Harvard and MIT came in 10th in 2010 but climbed to the top of the ranking in 2018. The rapid growth the city is experiencing explains the trend, as more and more high-technology employers have been fueling its job market.

The above text and charts courtesy of the RentCafe. Let's fill in some additional pieces of the puzzle.

Millennial Definition

PEW defines anyone born between 1981 and 1996 (ages 23 to 38 in 2019) is considered a Millennial, and anyone born from 1997 onward is part of generation z.

With generations defined, we can better explore what's happening.

Homeownership Rate

Annual Homeownership Rate by Age Group

Those figures are from the 2018 Census report Older Buyers Near Pre-Recession Levels.

The rebound starting in 2016 has a simple explanation. All of the millennials were of working age and most out of college.

New Home Sales Highest in 12 Years

It's no surprise New Home Sales Highest in 12 Years

Key Problems

  1. Housing bubble
  2. Attitudes
  3. Student debt
  4. Aging Boomers

Housing Bubble

Despite falling interest rates the housing bubble has been reblown: The Last Chance for a Good Price Was 7 Years Ago.


Millennials have different attitudes towards debt, mobility, and family formation than their boomer parents.

Student Debt

Millennials are also loaded up with student debt. Many of those who would like to buy a home or get married, can't or won't.

Aging Boomers

Some millennials are trapped at home taking care of their aging parents.

And some boomers want to downsize but cannot afford to move where they want to.

These trends, especially secular attitude changes, all put downward pressure on the desire home buying.

Mike "Mish" Shedlock

Comments (23)

Interesting list of cities. I would have expected more in high cost locales but it looks like the opposite is true. Most of the % increase in rent has been in middle or lower-cost cities in the south or midwest.

No. 1-17
Tony Bennett
Tony Bennett

I wouldn't stop at housing.

And I wouldn't stop at millennials.

The past decade has seen a proliferation of a variety of 'rent to own' plans.
Broke millennials (and others) can "purchase" the latest greatest $400 juicer (to impress their friends) thru installment plans.

QVC the King of flex plans. Whatever they are pitching for $59.99 ... or 6 flex pays of $9.99.

Part of reason why economy continues to stagger along ... until the Reset Happens.


I'm a Gen-X who realized well before the white-collar downsizing in the early 1990's recession that if you have kids or a mortgage, then employers can take advantage of you because of debt or some sort of payment obligation. I'm not surprised that millennials have realized this truth after witnessing the dotcom and housing bubbles burst.


Excellent analysis, Mish. I think the lack of affordability/housing bubble is the number one reason. Of course, that in turn originated from financialization and central bank manipulation. So once again, behold the havoc the banking sector, aided by governments, wreaked on society. And it's everywhere you look. Ireland is a stinking, festering mess too.


The hidden bomb in the era of renting, leasing, subscriptions and rent-to-own(most cell-phones plans are the equivalent of rent-to-own) and living without savings is that in a short few months of losing your income you could be homeless, with no transportation, and, worst of all for these day, no smart-phone. Slip down the hole as an irrelevant non-entity wandering the streets. Vagrancy is not that far away for many of these people who live seemingly sound lives now, voluntarily "free of possessions".

At least in the housing bust, it could be years before they managed to evict you from the house you made a few payments on. It's much easier and quicker to boot dead-beats from apartments.

Runner Dan
Runner Dan

"Despite falling interest rates the housing bubble has been reblown"

Correction: Falling interest rates help create a housing bubble.


Always more apartments going up around where I live and some of them are very expensive, all the way up to nearly $5K. Hard to find much for under $1500/mo.

The difference in attitudes is justified. While it bodes poorly for our society, it does make more sense to stay mobile, either stay unmarried or not have kids, and live more for the moment than the future. By the time Millennials are anywhere near retirement age, I expect the US will break into pieces and the dollar will be replaced. Most peoples' plans will have gone out the window, no matter how meticulous they were.

But hey, it was all worth it. We clawed decades of future profits to the present and made some bankers fantastically wealthy. That's what life is all about!


In my career as a CPA my favorite saying was "In God we trust, everyone else we audit." No one audits the Fed, thus, they are now god. Just ask the stock market.


As the generations wax and wane, demand for different types of house change, probably faster than the mixture of the underlying inventory. For example, from 20-30 I looked to rent an apartment near work and fun things to do (and girls), from 30-55 I needed a house to raise a family, and now I need to downsize because I'm rattling around in a big empty house full of memories.

I have the perfect house in mind, but my friend, who is 10 years older than me, laughed when I told him what I'd be looking for - "you and every other 55-70-year-old - we are all looking for the same house". We want to move, but why bother if we are moving into different compromises?

Thus, as the numbers of each age group change, yet the housing inventory variety remains pretty stable, there will be pressures on different house sizes.

I wonder if Shiller took that into account in his analysis?


Another element to housing prices is that they are being used as investment vehicles by the wealthy - running out of places to put their money. Increasingly high end units being brought as supplemental housing, but not as a primary house.


In my area you can figure a house selling price by looking up surrounding rents.

The selling price will be 20 year mortgage month cost + monthly taxes + insurance

Take that cost and add in 2% per year in upkeep(non linear) and you get the asking price.

Inverse 150k house Morgage $1200 month Tax $200 month Insurance $100 month Unkeep $250 month

Not a great investment with capital up front but if you can get financing it’s Dave Ramsey’s wet dream.

Renters are terrible though.


Student debt is key. Can't have housing formation when student are saddled with debt they didn't fully understand taking on at 17 and 18 years of age and this debt i not voidable under virtually any circumstance thanks to bank lobbying effort which got the bankruptcy laws rewritten in their favor. Trump's own Wayne Johnson a senior Education official recently quit saying student loan debt was not workable and ought to be forgiven. He was a Trump appointee.


If we want lower home prices one way to do that would be to remove the mortgage interest tax deduction which simply is a subsidy to the seller of real estate and results in higher real estate prices, the complete opposite of what we should want if we want higher home ownerhip


Getting rid of the MID would achieve the following as per the article:

A 5 percentage-point increase in the homeownership rate An approximate 4 percent dip in average home prices A more than 30 percent decline in the average mortgage balance


It's all about debt. Regardless of how much. If you owe alot, for any reason, and you don't like it, you'll do whatever you can to be free of it. Hard to do when most people need a car (initial cost, pay insurance, maintain $$'s, etc.) to get to that job, have to pay to live somewhere, and eat. Much of this is not counted by the government, who seems to think most people live like kings with all that piddly percentage of savings.... Only in the dreams of gov bean counters. Reality is much, much harsher.


Rent or purchase, they all have to live somewhere. As for "affordability," someone is buying them at the market price. That's what makes a market, I guess.

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