One economic downturn after another
Millennials, born between 1980 and 2000, have been dealt a far different set of circumstances. From the dot-com bubble burst in 2000 to the Great Recession of 2008 and, most recently, the coronavirus pandemic, millennials “have been hit with one recession after the next” since entering the workforce, Mark noted.
“Especially the Great Recession, was very hard on millennials for wage growth and that has essentially stunted their ability to meet major milestones like home ownership,” he said.
With three major downturns in their rear view mirror, millennials now face a challenging housing market in which fewer homes are available for sale, asking prices are more expensive, and interest rates have climbed past 7.1%. The national median home price hit $402,600 in July, up from $359,000 at the start of 2023; the typical mortgage on a single-family home is now $2,051 compared with $1,837 a year ago, according to NAR.
Mortgage rates have jumped so much that some real estate agents have started advising their clients to buy the home and wait for interest rates to fall to refinance — described by the industry phrase “Marry the house, date the rate.” That strategy may be “somewhat reasonable,” Mark said,”but you have to be prepared to pay those interest rates perhaps forever because it’s unclear when they will drop and by how much,” he said.
