House Hacking & Millennial Housing Struggles

Are you a millennial struggling to buy your first home? You're not alone. The latest data shows that millennials are no longer the largest group of homebuyers, with their percentage of homes purchased dropping significantly in 2022. We’ll look at what contributed to this decline, what the possible outcomes are for millennials if this trend continues, and what millennials can do to get into the housing market to start building wealth.

Millennial Housing Struggles

Millennials are having huge problems with housing right now. For the first time in eight years, millennials are not the largest portion of home buyers. They dominated from 2014 to 2021 but in 2022 they took a big downward spiral in terms of the percentage of homes purchased.

In 2022, they declined from 43% of the homes purchased all the way down to 28%. It's not because millennials suddenly do not want to purchase homes, as many predicted a decade earlier. It's because housing has become unaffordable for a lot of millennials with higher home prices as well as higher mortgage rates.

Millennials have been dethroned by boomers who have a ton of equity and also money to outbid these millennials for housing that's available in 2022. The boomer population increased from 29% all the way up to a whopping 39%. The reason for buying once again is because they have more equity and wealth to outbid these millennial first-time homebuyers. 

Housing Outcome for Millennials

So where is all this headed? I see two possible outcomes. Outcome number one is what a lot of people are predicting, this “Renter Nation” status. It’s where a lot of millennials get locked into apartment complexes and the rent is increasing so much that they're not able to save faster than the rent increase to ultimately be able to save up for that first down payment. This would potentially lock them in as lifetime renters and keep them from building wealth. As we know homeowners have 40x the net worth of renters, $5,600 versus about $255,000 for homeowners.

The potential second outcome that I see and the interesting thing is it involves boomers. Boomers have replaced millennials as the largest buying segment and Boomers have a ton of wealth right now. As boomers begin to pass down their homes and other assets to millennials, millennials could hit bank. Not only could a lot of these Millennials be buying their first home due to this, but they could also be buying their second home and sports car all at once as well.

Housing Advice to Millennials - House Hack

I was having a conversation with a millennial today and here's the advice that I gave them. You've got to purchase a home, even if the interest rate is stretching you a little bit. Find a way to make it work. Marry the home, date the rate, and look to refinance as rates start to come back down. House hack if you have to.

House hacking might not be the most convenient thing, but do as Dave Ramsey says, live like no one else so you can then live like no one else. House hacking is when you rent out either one or multiple bedrooms to a potential roommate. This could be a friend or this could be a complete stranger. Do it because this is a great way to subsidize your mortgage and maybe even get that mortgage reduced down to zero. That also allows you to take advantage of the three big keys in buying real estate.

1. Number one is appreciation. For example, if you put 5% down on the house and the House appreciates 5%, you didn’t experience 5% appreciation. You actually experience appreciation for the value of your home, not just the down payment you made.

2. Number two is a portion of every payment goes toward your principal. It's like a forced savings account so when you refinance or sell the home, you get to collect that money back. Over 15 or 30 years, depending on your mortgage type, your mortgage is completely paid off so you have this free and clear asset.

3. Number three is tax advantages, to your CPA and talk to your accountant, but a lot of millennials aren't aware of all the tax advantages and tax savings that come with buying a home.

If you're a millennial, the current housing market can be discouraging. Don't let home values and rising interest rates stop you from buying your first home and starting building your net worth. Contact us here or at to get started today!


Posted by Matt Curtis on


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