Millennial homeownership has hit an all-time low, according to U.S. Census Bureau data. The Census reports that only 34.6 percent of millennials, or those under 35, own a home, compared to an overall nationwide ownership in the low 60 percent range.
To learn more about people's property buying and renting habits, Apartment List, an online apartment rental marketplace based in San Francisco, polled nearly 6,000 millennial renters (ages 18 to 34) for its first Apartment List Renter Confidence Survey that it released in July.
"We wanted to better understand that market and what's driving those stats," said Andrew Woo, data scientist at Apartment List.
The survey went on to ask participants a series of questions, such as "How soon do you expect to be buying a home?" and "Do you feel that your local economy is on the right track?" The findings showed that 74 percent of millennials do want to purchase a home in the future, but 54 percent of them don't expect to do so until after 2018. Those figures dropped even lower when considering specific metro areas. San Jose came in last with only 53 percent of millennials planning to buy in that area, and San Francisco sank toward the bottom as well at 67 percent.
For people who are able to make homeownership work, a few key statistics stand out: age, level of education and marital status.
The older millennials (ages 25 to 34) planned to buy 54 percent of the time in the next three years, compared to the younger set of the generation at 37 percent. Millennials with a four-year, two-year or technical degree were more likely to plan to purchase (77 percent) than those with a graduate degree (72 percent), a high school education/GED (67 percent) or no high school degree (63 percent). And lastly, marital status plays a role, with 52 percent of married millennials planning to buy, compared to the singles in their generation at 41 percent.
When one or all of those factors align, millennials, such as the Shyrs in Mountain View, pursue homeownership.
Alex and Harmony Shyr started looking for a home in Mountain View in May 2013 because they wanted to be closer to their church community. They had been renting in San Carlos, where rent was cheaper, but after a year of marriage and a little time to save funds, they wanted to look at homeownership farther down the Peninsula. Because Harmony joined the workforce after graduating from college in 2007, while Alex attended graduate school and graduated in 2011, the Shyrs had a few years of savings to put toward a down payment and mortgage payments.
With the help of an East Bay Realtor, they toured and put in offers on homes around Mountain View. During the search, they viewed about 10 homes and learned about the process of bidding, especially how to navigate multiple bids on the same property. To combat losing out on homes, they bumped their budget up by $200,000.
"We would be among the top bids, and then to lose it was very emotional," Alex said.
After the heartbreak, they would analyze the numbers once the house closed to see what they would need to bid in the future.
Eventually, during a rushed, tight schedule, the Shyrs closed in July 2013 on a 1,700-square-foot townhouse in the North Whisman neighborhood.
"We closed on the last day possible," Harmony said. "It was really stressful. We signed on Thursday, closed on Friday and moved on Saturday."
Today, they enjoy the three-bedroom home and its backyard fruit trees, but have contemplated how long they will stay in their townhouse. The homeowner association fees that they pay monthly make a single-family home look quite attractive.
A few neighborhoods away, Mountain View renter David Schneider is one of those millennials who are still navigating what homeownership might look like. He has rented in Mountain View for more than two years, and enjoys living with two friends/roommates in the Old Mountain View area. His current location offers him proximity to work, which was his biggest consideration. He doesn't have to fuss with traffic; instead, he hops on his bike and starts the day with sun and exercise. He thinks about purchasing a home from time to time, scanning the local market prices to see if the transition to homeownership would be worthwhile. While optimistically looking, he is also pessimistic about making a huge investment in a home.
"What happens if in the future my job changes, I get married or incur a major cost?" Schneider said. "I think all of these can significantly impact my living situation and I want the ability to respond appropriately if/when any of these occur."
A lot of his uncertainty in purchasing a home comes from graduating during the 2008 financial crisis. He has watched friends struggle to find jobs, receive pay cuts and lose investments. In Mountain View, the median home price for the first half of 2015 was $1.7 million, according to Silicon Valley Association of REALTORSÃ‚Â® from MLSListings Inc. Apartment List found that high rent prices in the Bay Area, such as $2,250 for a one-bedroom apartment in Mountain View, did not allow renters to save up to purchase a home. The local prices have left Schneider with the same thoughts.
"I want to ensure I am able to purchase a home in the area over the next few years," he said. "Not sure if I will, but (I) want the ability to."
This article appeared in print in the Fall Real Estate 2015 publication.