No, Boomers Didn’t Have It Easier Than Millennials When Buying Their First Homes

You might call them an unlucky generation.

Just as they entered the market hoping to buy their first homes, typical mortgage payments soared.

Amid rampant inflation, home prices had shot up more than 60% in four years, and mortgage rates surged to their highest level in recent memory.

No, these young prospective homebuyers weren’t millennials. They were baby boomers, and the year was 1980, when mortgage rates topped 16% and the average monthly home loan payment jumped 34% from a year earlier.

Those figures come from a new Realtor.com® analysis of historical home price, income, and mortgage rate data. They closely correspond with contemporary estimates reported in 1981 by wire service UPI, which called the record surge in mortgage payments “astounding.”

Millennials, perhaps bitter over the economic havoc wreaked by the 2007 global financial crisis just as they entered the workforce, have long complained that “boomers had it easy.”

Houses were cheaper, jobs were plentiful, and college tuition could be paid off with a summer job, according to the common wisdom on Reddit.

But, according to our historical analysis, boomers arguably faced the toughest housing market ever for first-time buyers.

During the years when boomers turned 30, the share of median household income needed to make the typical mortgage payment averaged 33.2%, the highest of any living generation.

In contrast, millennials on average faced the lowest mortgage burdens, thanks to a decade of ultralow interest rates following the Great Recession.

For millennials turning 30, the typical mortgage burden averaged just 22.5% of median income.

That’s lower than the 25.8% average mortgage burden faced by Gen X, and even edges out the 22.6% share paid by the silent generation, based on the available data. (The youngest millennials won’t turn 30 until 2026, and reliable mortgage rate data goes back only to the early ’70s, covering just the tail end of the silent generation’s first homebuying experience.)

Still, within each generation, there have been periods when typical mortgage burdens shot above 30%, as they have done for the past two years.

Today, millennials entering the housing market as first-time buyers have a legitimate right to gripe, says Realtor.com senior economic analyst Hannah Jones.

“Though today's housing market is not the least affordable in history, it is the least affordable in 40 years and suffers from low inventory levels,” she says. “Buyers in today's market face high prices, high mortgage rates, and low levels of affordable inventory, making it exceptionally challenging to purchase a home as a first-time buyer.”

If millennials had it easy, why didn’t more of them buy homes?

It is true that U.S. home prices have consistently outpaced inflation, for as far back as reliable data exists. In 2024 dollars adjusted for inflation using the consumer price index, median home prices averaged $193,429 over the years the silent generation turned 30, compared with $227,737 for boomers, $279,843 for Gen X, and $319,804 for millennials so far.

In other words, inflation-adjusted home prices grew 18% for boomers from the prior generation, 23% for Gen X, and 14% for millennials.

But mortgage rates affect monthly payments to such an extent that for much of the decade leading up to 2022, millennial homebuyers faced lower mortgage burdens than even silent generation homebuyers at some points during the late 1970s, when rates above 7% were standard.

Despite this apparent advantage, it’s clear that many millennials did not buy homes by the same age their parents did. The median age of first-time homebuyers was 35 last year, up from 31 in 2013 and 29 in 1981, according to the National Association of Realtors®.

According to the Berkeley Economic Review, 45% of baby boomers were able to buy their first home between the ages of 25 and 34. As of 2019, only 37% of millennials in the same age range owned a home, the study found.

So if millennials had it easier in the housing market as the mortgage burden data suggests, why didn’t more of them buy homes?

For the oldest millennials, the very phenomenon that delivered ultralow interest rates as they turned 30, the Great Recession, also provided powerful incentives against homebuying, says David Clark, a professor emeritus of economics at Marquette University.

“They got to their 30s at the worst time possible for buying a home. You're coming out of the Great Recession, and you've got a pretty weak labor market as a consequence. They're saddled with some pretty significant college debt. And finally, this was not a smart time to buy a home, when prices were going down,” says Clark.

Following the 2007 financial crisis, home prices continued to fall annually until early 2012, according to the Case-Schiller Home Price Index. With no way to know when prices would stabilize, buying a home during that period would have been incredibly risky for millennials, even if it now seems like a wise move in retrospect.

“You have a caricature of the millennial living in their parents’ basement,” says Clark. “That's probably an overstatement in terms of the typical millennial, but it certainly was something that some had to do, given their debt situation and the weak labor market.”

Although boomers didn’t have the same student loan burdens as millennials, many of them also entered the housing market during a period of high unemployment. The unemployment rate peaked at an all-time high (excluding the COVID-19 pandemic) of 10.8% in December 1982. Unemployment rates averaged 7% over the 1976 to 1994 period when boomers were turning 30.

For millennials, the unemployment rate averaged just 5.6% over the same relative period of their lives—which includes both the lengthy fallout from the Great Recession and the brief but intense disruption of the pandemic. Gen X also saw an average unemployment rate of 5.6% at the same age.

Housing economist Ken H. Johnson believes that millennials may have avoided buying homes for the most rational of reasons: It’s not the most effective way to build wealth.

“On average, in terms of wealth creation, you are better off to rent and reinvest those dollars that you would have put into home ownership into a portfolio of stocks and bonds,” says Johnson, an associate dean in Florida Atlantic University's College of Business. “If you were to do that, then you would be better off in terms of total wealth creation. This would allow both for greater mobility and to better pursue your highest returns.”

Johnson, who has extensively studied the economics of renting versus owning, says that millennials are simply forging a different path to wealth creation than their parents, one based on their dramatically expanded access to equity and bond markets through free trading apps.

“I just think the younger folks are realizing, 'Hey, maybe I need to rent and reinvest. Maybe I need to be able to pick up and move to Atlanta or Washington, DC, on fairly short notice to get the highest salary and best professional advancement,” he says. "And when you put all that together, I'm not surprised the average age for the first-time homebuyer is going up.”