Millennials are taking on bigger mortgages than ever before, and it shows we've been wrong about them for years

Millennials are taking on bigger mortgages than ever before, and it shows we've been wrong about them for years

homeowner mowing housework

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Millennials are desperate to be homeowners, just like their parents before them.

  • Millennials are taking over the mortgage market in the US, according to a new analysis by The generation now holds the largest share of new mortgages by dollar volume.
  • There are two main reasons why: Millennials are buying more homes, and they're making smaller down payments.
  • There's long been speculation that millennials would ditch homeownership in suburbs for big cities. But while their timelines may be different than previous generations, the data show their attitudes toward owning a home are similar.

Homeownership is part of the American Dream, and millennials won't be killing it any time soon.

According to a new report from, millennials are taking over the mortgage market in the US. Home-loan data analyzed by show millennials - defined here as the generation aged 19 to 37 - have purchased a larger share of mortgages than Gen X or Baby Boomers in the US since early 2017.

Now, new data reveal millennials are responsible for the largest share (42%) of new mortgage loans by dollar volume, narrowly surpassing Gen X for the first time, and there are two clear reasons why. Millennials as a group are buying more homes than ever before, and individually, they're making lower down payments, even despite rising home prices, which requires a larger mortgage. To be sure, individual Gen X buyers are still taking on the highest loan amounts.

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The homeownership rate for millennials aged 25-34 is still trailing about eight percentage points behind the homeownership rate for Gen X and baby boomers at the same age, according to a 2018 Urban Institute report. Millennials' attitudes toward homeownership remain positive, however. They've just taken longer to get there.

"Millennials are getting older, with better jobs and deeper pockets, allowing them to expand their collective purchase power, and hence, their footprint in the market," Javier Vivas, director of economic research at said in a press release.

Read more: 5 millennials who became homeowners in their 20s share their best advice for buying your first house

"The stereotype that millennials primarily choose to buy homes and live in large metro areas isn't the reality," Vivas said. "Results show millennials' expansion is more heavily conditioned by affordability than in prior years, so their eyes are set on less traditional secondary markets where homes and jobs are now available and plentiful."

The data show that millennials make up more than 50% of mortgage holders in Buffalo, Pittsburgh, Cincinnati, Milwaukee, Columbus, and St. Louis. The affordability factor in these places is purportedly a huge draw. On average, homebuying costs in these markets represent only 25% of the median income for millennials aged 25 to 34, compared to 31% nationally, the analysis found.


Read more: Millennials have been called the 'brokest' and the 'richest' generation, and experts say both of those are true

While millennials may be buying cheaper homes than Gen X and baby boomers at a median price of $238,000, they're putting down less money up front. The average down payment by a millennial homebuyer on a mortgaged home was 8.8% in December 2018. Paired with rising home prices, it's evidence millennials are taking on bigger mortgages, as a group, in order to put down roots.

But all things considered, millennials aren't approaching homeownership exactly as their parents did, as Business Insider's Hillary Hoffower previously reported. There's been a rise in unmarried millennial couples buying homes together and it's due to economic conditions and a shift in attitudes toward marriage, Hoffower explained.

Homeownership is more important than other major life goals and events, like getting married and having children, to nearly three-fourths of millennials surveyed in a 2018 Bank of America study. Teaming up with a partner, regardless of marital status, can make homeownership more affordable, Hoffower said.