The Evolving Homefront: Millennials Stay Put as Older Buyers Dominate the Market
July 24, 2025
Homeownership in the U.S. is increasingly out of reach for many young adults, leading to significant shifts in housing trends. Nearly one in three young adults now live with their parents, according to U.S. Census Bureau data1 — a trend driven by rising home prices, mounting student loan debt, limited savings and a higher cost of living. Even as demand for housing remains strong, especially among those who postponed moving during the pandemic, affordability issues are sidelining many potential buyers.
While homeownership briefly rose during the era of historically low interest rates, the trend is reversing. The homebuyer affordability index declined sharply as mortgage rates and home prices surged, pushing the first quarter of 2025 homeownership rate down to 65.1% — a notable drop from 67.9% in the second quarter of 2020.2 Millennials, saddled with student loan balances and diminishing emergency savings, are especially hard-hit. The median age of first-time homebuyers climbed to a record high of 38 years in 2024, up from 35 just a year prior,3 reflecting how the market is increasingly pricing out younger adults.
This affordability squeeze fuels the demand for rentals. The share of new renter households climbed nearly 2% in 2024,4 with many young adults turning to the rental market as a more viable option. Renting remains more affordable than buying in many markets, supporting continued growth in both multifamily and single-family rental sectors. The median age of all homebuyers has also climbed, peaking at 56 in 2024, indicating that even seasoned buyers may carry mortgage debt into retirement.5 Adding to the financial burden, half of parents with adult children are providing regular financial support — up from 45% in 2023.6
Key Takeaway
While housing demand may soften due to economic pressures, strong rental demand is expected to continue, particularly among younger adults navigating high costs and limited financial flexibility. The rental market is becoming a more affordable housing alternative as new household formations shift to renters. Affordability challenges, lifestyle changes and demographic trends further support continued rental demand while vacancies decline in the multifamily and rental housing sectors. I expect favorable demographic trends will continue to support the multifamily and single-family rental home markets.
Sources:
1U.S. Census Bureau; as of November 2024
2Federal Reserve Bank of St. Louis – Homeownership Rate in the United States; as of 4/28/25
3,5Copyright ©2025 NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. Reprinted with permission.
4Arbor – Renters Account for Majority of Household Growth; 4/14/25
6CNBC - 50% of parents financially support adult children, report finds. Here’s how much it costs them; 3/25/25
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