Americans under 35 are buying homes again — but there's still a major issue
After years of decline, homeownership among Americans under 35 has rebounded, reaching the highest point in two years, according to new data from the Census Bureau's Housing Vacancy Survey released on Tuesday. The survey found that 37.9% of households headed by someone under 35 owned their home in the final quarter of 2025. However, the majority of millennials still feel they are locked out of the housing market, with 97% of the respondents, in a separate Clever Offers survey, citing cost as the biggest barrier.
The Housing Vacancy survey found homeownership among Americans under 35 went up by 1.6 percentage points from the previous year, when the ownership rate plummeted to 36.3%, the lowest level in the past half-decade. While most experts estimated the rate to fall further, the rise in ownership comes as a surprise. According to Hannah Jones, senior economic research analyst at Realtor, easing mortgage rates have been the most immediate catalyst, as they brought back some of the sidelined buyers into the market "by improving monthly affordability." Jones shared with Investopedia that increased geographic flexibility, price adjustments, and an increase in inventory also played a role in the increased rate. As per the publication, the borrowing costs eased in late 2025, causing some buyers to jump back in. However, home prices remain elevated, with a median U.S. home costing $410,800 according to the Federal Reserve Economic Data.
Despite the cooling mortgage rates, most millennials feel homeownership is out of their reach, as discovered by a survey of 1,000 potential homebuyers by Clever Offers. While 72% of millennials in the survey still believe homeownership is part of the American dream, three out of four said they can't afford a home today.
In the survey, while 40% of the respondents said they were desperate to buy a home in 2026, 97% said at least one obstacle tied to cost is making it impossible for them. About 46% of the respondents said homes are too expensive, while 40% said interest rates are still too high. Another 34% said saving for a down payment is a challenge. Furthermore, the majority, or 59% of the respondents, including 67% of the first-time buyers, said they plan to spend less than $400,000 (slightly less than the median price) on their home purchase.
While one in three millennials said better spending habits would make it easier for them to purchase a home, about 77% were unwilling to reduce their expenditure on gym memberships, 71% refused to cut back on subscription services, and 67% said they won't spend less on coffee to afford a home. Instead, young buyers were ready to take bigger financial risks as 44% said they would be willing to spend half of their monthly income on housing, and 49% said they would consider taking a mortgage at an interest rate above the current level of 6%.
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