The pandemic is crippling millennials' savings — and that means it's only going to get harder for the generation to buy their first homes

• The pandemic may cause millennials to further delay homeownership by years, a recent Realtor.com analysis found.
• If the average millennial is unemployed without income for six months, it would take them four years to recover their lost savings.
• Millennials have already been struggling to save for a home thanks to the fallout of the Great Recession, student-loan debt, and rising housing costs.

Millennials' path to homeownership just got even bumpier.

The economic effects of the pandemic, including another recession and mass layoffs, have left many people falling back on their down payment savings to cover everyday expenses — not good news for millennials, the largest portion of homebuyers in the US.

A recent Realtor.com analysis found that it would take the average millennial nine months of saving to recover a month's worth of expenses. That means that if they were unemployed with no income for six months, it would take them four-and-a-half years (54 months) to recover their lost savings. Urban-dwelling millennials will likely take the longest time to recover, the report found.

This analysis was based on monthly average millennial household expenses of $3,770 and a post-tax monthly median household income of $4,240. It assumed a savings target of 10% of their take-home pay and that household incomes will return to their pre-COVID levels post-lockdown. It didn't account for the time it will take to reach full employment again or potential pay cuts, meaning the actual time to recover lost savings could be even worse.

It doesn't help that some banks are making their lending criteria more strict, the report stated, requiring higher credit scores and a larger minimum down payment. The millennial median down payment is 8%, per the report, but some banks are now requiring the standard 20% down payment for mortgage approvals.

As Danielle Hale, chief economist of Realtor.com, puts it in a press release, it could all delay millennials' home purchase "by years."

Millennials were already on a delayed road to homeownership

Crippled with student debt and financially behind due to the fallout of the recession, millennials have struggled to save for the skyrocketing cost of housing. First-time homebuyers will pay 39% more than first-time homebuyers did nearly 40 years ago.

But there's more to millennials' slow path to homeownership than rising costs and saving difficulties. They've also been struggling with America's shortage of starter homes. Most newly constructed homes in 2019 were devoted to "upper-tier housing" (homes costing at least $500,000), a pre-pandemic Realtor.com report found earlier this year.

It doesn't help that many of these limited starter homes were scooped up by real-estate investors with all-cash offers.

Fed Reserve data examined in the Economist found that this all leaves millennials owning only 4% of American real estate by value — a lot less than the 32% of real estate value baby boomers owned at their age.

It's worth noting that there's a small gap in the median age of millennials and baby boomers in these two data points — 31 in 2019 for millennials compared to 35 for baby boomers in 1990. But while it's likely millennials could narrow the real estate value gap within the next four years, reported Christopher Ingraham for The Washington Post, it's unlikely they'll even reach 20% of the housing market.

Add the pandemic to the mix, and that seems even more unattainable.