Comparing prices that were available to baby boomers – the generation that was the offspring of the so-called Greatest Generation – Millennials have an uphill climb in achieving homeownership. The calculus yields yet another sobering statistic: “Baby boomers when they were 30, the average home price was $82,800 for Millennials, it’s $313,000. It’s increased 393% since 1985, when the average Baby Boomer turned 30.”
Stated differently, the study revealed that to afford a home with a suggested 2.6 home price to income ratio, a Boomer turning 30 in 1985 would have needed a household income of $31,850, 35% higher than the median household income at the time.
For Millennials, who, on average, reached their 30s around 2019, that ratio is significantly higher. The median sale price of a home in 2019 was $313,000, while the median household income was $68,700 – a 4.6 ratio. To afford a home at the suggested 2.6 ratio, the average Millennial would need a household income of $120,400, a 75% higher salary than the actual median.
But Millennials aren’t just combatting inflated housing prices – they also carry more added expenses such as education costs, according to the study. After adjusting for inflation, college tuition costs grew 52% between when Baby Boomers and millennials began attending universities and have spiked an alarming 143% in total since 1963.