Millennials and Housing

There have been several articles recently questioning Millennials and their lack of desire to invest in home buying so I did some research.

Utilizing information from the U.S. Department of Commerce, Economics and Statistics Administration, U.S. Census Bureau: Current Population Reports – Consumer Income from 1995, 2010, and 2014, I have gathered information on incomes for 25-34 year old individuals and their representation as a part of homeowners. I have also utilized…/uspricemon.pdf to gather information on the Sales Prices of New Homes for each of the same years.


Looking at average incomes for age 25-34 for 1995 compared to 2010 followed by cost of new home June 1995 and June 2010.

1995 June

Age 25-34: $34,701 median

House Median: $133,700

Mean: $160,200

2010 June

Age 25-34: $50,059 median

House Median: $219,500

Mean: $256,700

The following calculation shows a 3.15% decrease in purchasing power of dollar towards a new home for 25-34 year old individuals from 1995 to 2010.



Calculating allows the income from 1995 and 2010 compared to the actual median income for 25-34 year individuals.

Conversion Comparison using this calculator

1995:$34,701 = 2010:$49,650 (50,059 actual)

Continuing the comparison, the cost of a new home compared from 1995 to 2010 dollars and the actual 2010 cost. This shows that it costs $28,000 more to purchase a home in 2010 than in 1995 while median income for 25-34 year old individuals remains nearly the same.

1995: $133,700 = 2010: $191,300 (219,500 actual)

Now taking data from 1995 and comparing it to the value in 2014 versus the actual income and cost of new home. Income remains near the same but it now costs $80,000 more to purchase a new home.

1995 to 2014: $53,904 (54,243 actual); $207,688 (287,000 actual)

To test whether the time length of time has a factor I have used 2010 actual data to compare with 2014 value and actual. Housing costs are $49,000 more.

2010 to 2014: $54,347 (54,243 actual); $238,304 (287,000 actual)

Now I’ve tested whether the cost is demand driven within this age group of buyers though it turns out not to be the case as there is actually a reduction in individuals from this age group and an increase in homes overall. Demand may remain a driver for cost of home increases though for what I am looking at, it means that Millennials are not the cause.

1995: 23.34M age 25-34/99.63M homes=23.43%

2010: 19.57M age 25-34/118.68M homes=16.49% (6.94% reduction 1995-2010)

2014: 20.07M age 25-34/124.59M homes=16.11% (7.32% reduction 1995-2014)


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