Millennial Home Buyer Report: 2025 Edition

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By Jaime Dunaway-Seale Updated January 13, 2025

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🏚️🐁 What would millennials do to own a home? 🏚🐁

Some millennials are so desperate to become homeowners that 41% would knowingly buy a home with asbestos or pests, such as mice, cockroaches, and spiders.

Barriers to Homeownership | Home-Buying Budgets | Housing Affordability | Offering Over Asking Price | Debt vs. Savings | Down Payment Woes | Effect of Interest Rates | Interest Rates vs. Market Competition | Buying Sight  Unseen | Buying a Fixer-Upper | Millennial Migration | Co-Buying | Homeowner Regrets

Despite the prevailing narrative that millennials are content to live in expensive urban apartments or overstay their welcome at their parents' house, the reality is that many are eager — even desperate — to own their own homes.  

Millennials' desire for homeownership persists in spite of the many obstacles that stand in their way. 

Although 69% of millennials say renting is easier than owning a home, 74% think homeownership is still part of the American dream, and 62% would consider themselves failures if they never achieved it. 

It's been a tough few years for millennial home buyers as a lack of inventory and high mortgage rates have sent prices soaring. But housing forecasts suggest more homes will hit the market in 2025 and slightly improve affordability — offering a glimmer of hope to young buyers.

Millennials, whose wealth lags behind other generations, are motivated to buy a home in 2025 as a way to build their net worth. About 39% say homeownership is a good investment, making it the most common reason to buy among respondents.

Despite the benefits homeownership provides, 74% of millennials say buying a home makes them feel stressed, and 96% have concerns about the process, including:

  • Not being able to find an affordable home (44%)
  • Unexpected or hidden costs (35%)
  • Not being able to afford a mortgage (34%)

To learn more about this cohort of buyers, we asked 1,000 millennials who are planning to purchase a home by the end of 2025 about their plans, anxieties, and compromises they’re willing to make.

We compared this data with previous years to provide a clear snapshot of millennials’ home-buying experience — and the obstacles that stand in their way in 2025.

🔑 Millennial Home Buyer Statistics

  • 96% of millennial home buyers have concerns about purchasing a home, with 44% saying they're worried about finding an affordable home — up from 35% in 2024.
  • 97% of millennials face barriers to homeownership, with the top barriers all financial in nature: homes are too expensive (52%), interest rates are too high (48%), and it's difficult to save for a down payment (44%). 
  • Just 21% of millennial home buyers think it's possible for their generation to afford a home, compared to 52% who thought the same in 2024.
  • The median U.S. home costs about $420,000, but 68% of millennials plan to purchase a home that costs less than $400,000 in 2025 — up from 57% who said the same in 2024.
  • 56% of millennials would still offer over asking price to beat the competition, but that's a significant drop from the 79% who said the same in 2024.
  • More than 1 in 4 millennials (27%) have more debt than savings.
  • 74% of millennials say high interest rates make now a bad time to purchase a home, but 76% say potential rate drops in 2025 would entice them to buy. 
  • 64% of millennials say they'd rather buy in a market with lower interest rates and more competition — nearly double the 36% who'd rather buy in a market with higher interest rates but less competition and more negotiating power.
  • Although 29% of millennials worry they may have to make major repairs on their home, 57% would make an offer on a fixer-upper. However, about 1 in 8 millennial homeowners (13%) regret buying a fixer-upper.
    • Millennials are so desperate to own a home that 41% would buy a home with asbestos or pests, such as mice, cockroaches, and spiders.
  • More millennials would consider buying a home near a cemetery (34%) or a railroad track (26%) than near their ex (25%).
    • 60% of millennials wouldn't consider buying a home near their in-laws, even if it was the only home available in their budget.
  • 81% of millennials planning to buy in 2025 are confident they won't have any regrets, but that expectation doesn't match reality. About 82% of millennial homeowners regret at least one aspect of their first home purchase.

Half of Millennials Say Expensive Homes Are a Barrier to Homeownership

Although some experts predict a more favorable housing market in 2025, buying a home these days is still tough. With perennial problems, such as low inventory, high mortgage rates, and elevated home prices extending into 2025, nearly all millennials (97%) say they face barriers to homeownership. 

Expensive homes are the No. 1 barrier to homeownership in 2025, with little relief coming in the new year. Although home prices are rising at a slower rate than in the past, they're still expected to rise 4% from 2024. 

More than half of millennials (52%) say expensive home prices hinder their ability to buy — up from 46% who said the same in 2024.

High home prices are a significant challenge to overcome on their own, but they're not the only financial obstacle millennials face when purchasing a home. In fact, the most common barriers are all financial in nature:

  • Homes are too expensive (52%)
  • Interest rates are too high (46%)
  • Saving for a down payment (44%)
  • High property taxes (34%)
  • Not enough available homes in their budget (33%)
  • Qualifying for a mortgage (28%)

High mortgage rates prevent 46% of millennials from purchasing a home in 2025, but that's down slightly from 50% in 2024, when it was the No. 1 barrier to homeownership.

With the possibility of rate drops in 2025, however, rising home prices emerge as a greater concern — especially as proposed tariffs on foreign materials and mass deportations could result in higher construction costs and slower home-building activity that could drive up prices in a market already short on supply.

2 in 3 Millennials Can't Afford the Median-Priced Home

In the face of so many financial obstacles, just 21% of millennials think it's possible for their generation to afford a home — a significant drop from 52% who said the same in 2024. 

Those who can afford to purchase a home are doing so on a budget, with millennials seeking some of the most inexpensive homes on the market. 

The median U.S. home costs about $420,000, but two-thirds of millennials can't afford that. About 68% plan to purchase a home that costs less than $400,000 — up from 57% who had the same budget in 2024.

Despite a modest home-buying budget, 67% of millennials say buying a home makes them feel in over their heads financially. It's no surprise another 67% regret not buying a home when prices were lower. 

Millennials' financial woes are often blamed on their own spending habits, with 58% of respondents saying millennials could own a home if they didn't spend their money on frivolous things. More than half of millennials also say their own generation could become homeowners if they were more responsible (58%) or if they tried harder (56%).

Contrary to these negative stereotypes, many millennials are working hard and willing to make personal sacrifices to own a home, including:

  • Working a second job (47%)
  • Buying a smaller home (42%)
  • Buying a home without all of their desired features (40%)
  • Moving to a different city (35%)
  • Moving to a rural area (28%)

1 in 3 Millennials Blame Baby Boomers for the Affordable Housing Crisis

Members of every generation have unique economic hardships when they reach adulthood, but 45% of millennials say their generation has had the hardest time affording homes, while 79% say boomers have had the easiest.

As they came of age during the Great Recession, millennials accumulated more debt and built less wealth than previous generations, making it more difficult to save for skyrocketing home prices

With millennials struggling to find affordable homes, they place the blame squarely on older Americans. One-third of millennials (33%) say baby boomers are most responsible for the affordable housing crisis. 

The expensive U.S. housing market is the result of several factors, but boomers have contributed in many ways. More than half of boomers (54%) say they never plan to sell their home, which has helped fuel a nationwide housing shortage that has increased the cost of existing properties. 

It's no wonder 54% of millennials think the housing market would be better if more boomers sold their homes. 

Frustrated millennials think they could help solve the housing affordability crisis, but despite comprising the largest share of home buyers, 65% think some other generation has more influence over current housing market trends. 

Nearly half of millennials (48%) believe they should be leading housing policy, and 45% believe there would be fewer problems in the world if baby boomers were more like them.

» Learn how millennials can save buying a home with a home buyer rebate

More Than Half of Millennials Would Still Offer Over Asking Price for Their Home

Although 44% of millennials worry they won't be able to find an affordable home, 56% would still offer over asking price to beat the competition in 2025. However, that's down from 80% in 2024 as steep prices deter millennials from busting their budgets on extravagant offers.

At the height of the home-buying frenzy in 2022, about 16% of millennials said they'd pay at least $100,000 over asking price. But that number has declined steadily over the years from 14% in 2023 to 11% in 2024 and a measly 3% in 2025. 

Not only are millennials reluctant to spend big bucks to outbid the competition in 2025, they're also less willing to make smaller offers over the asking price. The percentage of millennials who would offer $25,000 or more over asking decreased by half — from 48% in 2024 to 19% in 2025.

Now, more than 1 in 3 millennials (37%) wouldn't offer more than $25,000 over asking price, and nearly 1 in 4 (21%) wouldn't offer more than $10,000 over asking.

Meanwhile, many millennials refuse to pay above the asking price at all. In 2025, about 16% of millennial buyers would only offer below the asking price — double the 8% who took the same approach in 2024. 

1 in 4 Millennials Have More Debt Than Savings

Overbidding for a home can lead to dire consequences for many millennials who are already in poor financial straits because of staggering debt burdens.

Overall, 73% of millennials have some form of non-mortgage debt, with more than 1 in 3 (38%) owing $10,000 or more.

Although home buyers of all generations have a wide range of non-mortgage debt, millennials tend to have more as stagnating wages and rising living costs have made it difficult to save for the future. 

In fact, millennials have less savings in 2025 than they did in 2024. Today, 39% have fewer than $10,000 saved — an increase from 25% a year ago. What's more, 1 in 12 millennials (8%) have nothing saved.

With their financial reserves diminishing, it's no surprise that 1 in 4 millennials (27%) have more in debt than they do in savings.

Millennials Misjudge Readiness for a Down Payment

Without sufficient savings, it becomes much more difficult for millennials to afford a down payment — with 44% saying it's a barrier to homeownership. 

Just 43% of millennials think they have enough money saved for a down payment in 2025 — a significant drop from 67% who said the same in 2024. 

Yet even those who think they have enough saved still lack sufficient funds. 

About 44% of millennials who say they have enough for a down payment report less than $40,000 in savings, meaning they couldn't put down 10% on the median-priced home of roughly $400,000. They couldn’t even afford a full 20% down payment on a $200,000 home.

In reality, just 32% of millennials have at least the $80,000 needed for a full 20% down payment on the median-priced home of about $400,000.

Despite the stereotype that millennials would sacrifice potential savings on fancy coffee and avocado toast, when faced with a shortfall, 87% of millennials say they'd give up certain lifestyle expenses, such as dining out, to save for a down payment.

Interest Rate Drops May Motivate 3 in 4 Millennials to Buy

Small down payments, combined with a lot of debt, can make getting approved for a mortgage a tough task for millennials. More than 1 in 4 millennials (29%) worry they won't qualify for a mortgage. 

With mortgage rates still hovering around 7%, more than 1 in 3 millennials (34%) worry they won't be able to afford their mortgage payments, even if they do qualify.

Mortgage rates eased slightly in September 2024, sparking widespread optimism of greater reductions that would finally make home buying more affordable. Millennials latched on to this hope, with 57% predicting rates would drop further in 2025.   

In fact, 76% say the possibility is enticing them to buy. 

Yet pesky inflation failed to cool as expected, and mortgage rates have ticked back up to start 2025. About three-fourths of millennials (74%) say high rates make now a bad time to buy a home, and two-thirds (65%) regret not buying a home when interest rates were lower.

Although mortgage rates could fall throughout the year, millennials waiting for a significant financial boon might be setting themselves up for disappointment.

The 30-year fixed-rate mortgage is expected to stay between 6% and 6.5% for the next two years, but nearly 45% of millennials think the rate will fall to 5% or less in 2025. About 1 in 8 (13%) think the rate will drop to 3% or less — a historic low that was only hit as the economy recovered from the pandemic.

Millennials’ belief that mortgage rates will decline coincides with a noticeable drop in their willingness to accept a high rate in 2025. Last year, 78% of millennials said they would accept a mortgage rate of 7% or more, but that percentage dropped by nearly half to 42% today. 

Similarly, only 24% of millennials would accept a rate of 10% or more in 2025, compared to 66% in 2024.

With such unrealistic expectations, it's no surprise that 1 in 4 millennials (28%) who have been approved for a mortgage say their interest rate was higher than expected.

Millennials Are Twice as Likely to Prefer Low Rates Over Less Competition

Although experts predict a slightly rosier forecast for buyers in 2025, 90% of millennials say the housing market has still affected their plans to purchase a home. 

While some millennials who have been patient through the tough market are eager to buy at the first sign of a thaw, others are content to wait for significantly better conditions. About 42% of millennials have delayed their plans to buy because of the current housing market. 

The decision largely stems from fears about mistiming the market. About 58% of millennials are worried that the market could get better for buyers after they purchase their home. Specifically, nearly 1 in 4 (22%) worry that interest rates will drop after they buy. 

Declining interest rates can make home buying more affordable but not necessarily easier. If interest rates decline, competition for homes will likely increase — giving sellers even more of an advantage than they already have. 

Such a scenario could take millennial home buyers by surprise. The percentage of millennials who view a competitive market as an obstacle dropped substantially from 39% in 2024 to 26% in 2025. Specifically:

  • 34% of 2025 buyers expect to make offers on multiple homes, compared to 36% in 2024.
  • 29% of 2025 buyers expect to make concessions on the characteristics of a home, compared to 42% in 2024.
  • 27% of 2025 buyers expect to pay more than a home's asking price, compared to 29% in 2024.
  • 26% of 2025 buyers expect a bidding war with other buyers, compared to 29% in 2024.
  • 23% of 2025 buyers expect a rushed decision-making process, compared to 26% in 2024.

Although millennials expect to see fewer of these scenarios than in 2024, they are actually more likely to occur in 2025 if competition for homes increases because of lower rates. 

Still, millennials are twice as likely to say they'd rather buy in a market with lower interest rates and more competition (64%) than in a market with higher interest rates but less competition and more negotiating power (36%).

Nearly 3 in 4 Millennials Would Buy a House Sight Unseen

Cut-throat competition in the post-pandemic market forced buyers to move quickly, often making offers on a home without seeing it in person first. 

Although buyers in today's less-competitive market have more time to make decisions, the trend of buying sight unseen remains a popular — though declining — practice. 

About 74% of millennials would still consider buying a house sight unseen, but that's down from 85% who said the same in 2024.

Buying a home sight unseen is risky, and millennials would only consider it under certain circumstances. Millennials could be convinced to buy a home sight unseen if:

  • The home is listed at a great price point (34%)
  • The home is located in an area they're familiar with (29%)
  • The home is a new build with no previous owners (28%)
  • Someone looked at the home on their behalf (26%)
  • The listing had a comprehensive virtual tour (25%)

The amount and quality of online data makes buying a home sight unseen a more viable option for today's home buyers, but an increasing number of millennials don't want to take a chance on such a large purchase if they can reduce the risk by touring the property in person first.  

Overall, 1 in 4 millennials (26%) say nothing could convince them to buy a home sight unseen — up from 15% a year ago.

More Than 40% of Millennials Would Buy a Home With Asbestos, Pests

Buying a home sight unseen isn't the only risk millennials would take when purchasing a home. With a lack of affordable options, 57% of millennials would make an offer on a fixer-upper that needs major repairs. 

Although 1 in 4 millennials (29%) worry they may have to make major repairs to their homes, some are so desperate to become homeowners they wouldn't be deterred by even the most harmful hazards:

  • 41% of millennials would buy a home with asbestos.
  • 41% would buy a home with pests, such as mice, cockroaches, and spiders.
  • 40% would buy a home with a leaky roof.
  • 35% would buy a home with foundation issues.
  • 34% would buy a home with termites.
  • 32% would buy a home in an unsafe neighborhood.
  • 29% would buy a home with mold.

Not only do fixer-uppers pose serious health and safety risks, many feature outdated boomer design trends. This is a serious turnoff to 44% of millennials who say boomers have the worst decorating style, with many unwilling to buy homes with certain design elements the older generation made popular. 

About 1 in 10 millennials (10%) wouldn't buy a home with lots of wallpaper, and 1 in 6 (16%) wouldn't buy a home with wall-to-wall carpet.

Fixer-uppers may appeal to millennials who want to buy an affordable home without fighting the competition, but whether making structural or cosmetic changes, they can be costly to repair and maintain.

That prospect adds to the concerns millennials already have about managing surprise expenses in homeownership. About 1 in 3 millennials (35%) are worried about the unexpected costs of homeownership, and 1 in 5 (21%) aren't confident they can manage unexpected expenses when they arise.

 In the end, about 1 in 8 millennial homeowners (13%) regret buying a fixer-upper.

More Millennials Would Rather Live Next to a Noisy Railroad Track Than Their Ex

To achieve homeownership, millennials are willing to sacrifice not only quality homes but also those in prime locations. If it was the only home available in their budget, millennials would consider buying a property next to:

  • A cemetery (34%)
  • A railroad track (26%)
  • A busy highway (24%)
  • An airport (17%)
  • A nightclub (16%)

Homes in such undesirable areas may be less expensive, but they are often accompanied by negative health effects, such as chronic stress and poor sleep.

Interestingly, millennials would rather tolerate these discomforts than endure the awkwardness of living next to an old fling. Millennials are more likely to consider buying a home near a cemetery (34%) or a railroad track (26%) than near their ex (25%). 

Past relationships aren't the only ones millennials worry about when purchasing a home. About 60% would not consider living next door to their current in-laws. 

Although living near undesirable people or places can make homeownership more accessible, nearly 1 in 6 millennial homeowners (17%) regret sacrificing a better location for a home in their budget.

More Than Half of Co-Buying Millennials Could Never Afford a House on Their Own

Sacrificing quality homes and locations aren't the only paths cash-strapped millennials are taking to afford homes. 

About 70% of millennials plan to co-buy a home with at least one other person. Of those, nearly 1 in 5 millennial co-buyers (21%) are doing so with a non-spouse partner, such as a significant other, family member, friend, or roommate. 

Although 45% of unmarried co-buyers say they're nervous to purchase a home with someone who isn't their spouse, 70% say they can’t currently afford to buy a house on their own, and 57% say they'll never be able to purchase a house independently. 

Co-buying a home with a non-spouse partner may be a financial necessity, but it typically comes with more risks. Unmarried couples aren't governed by the same property division laws, and untangling finances and ownership rights can be much more complicated if a co-buyer decides to move. 

In fact, this is the most common fear among millennial co-buyers. More than half (53%) worry a major life event, such as a marriage or new job, could affect their joint ownership of the property.

Co-buying millennials are also concerned that:

  • Responsibilities of homeownership will not be shared equally (50%)
  • Disagreements will arise about how to split repair and maintenance costs (48%)
  • The co-owner will not be able to pay their share of the mortgage (42%)
  • Homeownership will ruin the relationship with the co-buyer (40%)
  • The co-owner will bring down their credit (38%)

82% of Millennial Homeowners Have Regrets About Their Purchase

The obstacles young buyers face in today's housing market have been well documented, but millennials still seem to underestimate the difficulty of purchasing a home.

Approximately 81% of millennials planning to buy in 2025 are confident they won't have any regrets, but that expectation doesn't match reality. About 82% of millennial homeowners regret at least one aspect of their first home purchase. 

Millennials may be surprised to find they'll likely regret decisions they thought they were most equipped to make. 

Although 83% of millennials are confident they can find a home that meets their needs, outgrowing their home too quickly (19%) and buying a home that lacks their desired features (18%) are the two most common regrets among millennial homeowners. 

Millennials also regret:

  • Compromising on location for a home that fits their budget (17%)
  • Bad neighbors (17%)
  • Not being educated about home buying (15%)
  • Underestimating property taxes and insurance costs (15%)

The last two regrets may come as another shock to overconfident millennials.

Even though 83% of millennials think they understand the home-buying process, more than 1 in 7 (15%) regret not being educated about purchasing a home. 

Young buyers are increasingly turning to social media, with about 1 in 6 millennials (17%) saying they use TikTok as a source of home-buying information.

Interestingly, social media made millennials feel more educated, with just 5% of TikTok users regretting their lack of education, compared to 17% among those who did not use the platform. 

However, TikTok users (88%) had more overall regrets than non-users (82%) — underscoring social media's tendency to foster dissatisfaction among buyers who compare their homes to the curated homes of others.

Many millennials also grapple with the unexpected financial realities of homeownership.

Despite 79% of millennials saying they understand all the fees and costs associated with buying a home, about 1 in 7 (15%) regret underestimating their property taxes and insurance costs. 

Another 1 in 8 millennials (13%) regret that the upkeep on their home is too expensive, while 1 in 10 (11%) regret that homeownership, in general, is too expensive.

Methodology

Clever Real Estate surveyed 1,000 millennials, including 700 first-time home buyers, who plan on purchasing a home in 2025 to find out their buying plans, preferences, and views on the housing market. The survey was conducted Nov. 20-30, 2024. The margin of error is +/- 3.5%.

About Real Estate Witch

You shouldn’t need a crystal ball or magical powers to understand real estate. Since 2016, Real Estate Witch has demystified real estate through in-depth guides, honest company reviews, and data-driven research. In 2020, Real Estate Witch was acquired by Clever Real Estate, a free agent-matching service that has helped consumers save more than $160 million on realtor fees. Real Estate Witch's research has been featured in CNBC, Yahoo! Finance, Chicago Tribune, Black Enterprise, and more.

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FAQs

Why is it so hard for millennials to buy homes?

As home prices rise much faster than wages, expensive homes are the No. 1 barrier to homeownership — with 52% of millennials saying the prices hinder their ability to buy homes in 2025. Learn more.

Should millennials buy a home now or wait?

About 42% of millennials have delayed their plans to buy. The decision largely stems from fears about mistiming the market. About 58% of millennials are worried that the market will get better for buyers after they purchase their home. Learn more. 

Do millennials have home-buyer remorse?

Approximately 81% of millennials planning to buy in 2025 are confident they won't have any regrets, but that expectation doesn't match the reality in which 82% of millennial homeowners regret at least one aspect of their first home purchase. Learn more.


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