How Millennials Are Finding Affordable Homes to Buy

Generational analysts often describe millennials as ambivalent about home buying. But 51.6% of millennials own homes, according to 2024 data from the National Association of REALTORS®. The perceived lack of enthusiasm may be something else. “The problem is more of a delay than a drop in demand or desire to buy,” says Nadia Evangelou, principal economist and director of real estate research at NAR. The good news? Millennials are finding ways to bypass the delay when they’re looking for affordable homes to buy.

What Millennials Have Going for Them

Millennials make up 26% of recent home buyers, according to the NAR 2026 “Home Buyers and Sellers Generational Trends Report.” Older millennials, age 36 to 45, were the highest-earning home buyers of any generational group, with a median income of $132,700 in 2024, the report found. That means they can afford the largest homes, at a median size of 2,100 square feet. Younger millennials, age 27 to 35, are the most educated generational group, with 75% holding at least a bachelor’s degree.

Especially in certain markets, millennials have been able to identify and take action. “[In] Dallas, Cleveland, Oklahoma City, for example, we’ve seen gains in homeowners under 35 in just the past year,” Evangelou says. “These markets tend to have a few things in common: better affordability, strong job growth and more entry-level housing options.”

Barriers to buying homes — high mortgage rates, housing costs and personal debt — have become areas of compromise. “What we’ve learned from those who are able to buy is that they’re making trade-offs on location, not buying in their ideal neighborhood, buying a smaller property or condo, purchasing a fixer upper or not buying a forever home,” Evangelou says.

How Millennials Bought a Home

Three millennials share how they bypassed barriers to home buying.

Share the Burden

Karly Funk, 36, a nurse at a hospital in Washington, D.C., hospital, and a close friend got tired of paying high rent. They pooled resources to co-buy a place that would be “affordable and a good investment down the line,” Funk says. They were willing to consider a fixer-upper. Although they didn’t take advantage of it, the Federal Housing Authority has a 203(k) Rehabilitation Loan that could help with the purchase of a fixer-upper.

Budgeting: The pair worked with a financial planner and a real estate agent to figure out how much they could spend on a monthly mortgage payment. Each had been saving money on their own and didn’t get any outside money from their families. They created a contract outlining each person’s percentage of ownership.

Financing: In 2023, they spent $475,000 on a circa-1930s house in Takoma Park, Md., near a Metro stop, walking paths and shopping. “[The house] had been passed down through a family that had done a lot of temporary fixes over the years,” Funk says. They qualified for a first-time home buyers’ program and put down 3%. The interest on their mortgage was 7%, and “we bought points to lower the interest rate to 6%,” Funk says. The pair hired professionals to do repairs.

Evangelou advises first-time buyers to look for options that require little or no down payment. Those include first-time buyer programs or an FHA or conventional mortgage that allow a down payment of 3% to 5%, or down payment assistance programs — state or local grants or forgivable loans, she says.

A New Build Might Be Best

Jordyn Bush, 31, a pediatric nurse and her husband began looking for a house in Farmington, N.Y., three years ago. They worked with a real estate agent and spent 18 months seeking a home in their price range of $500,000 to $550,000. “We realized we could pay $450,000 to $500,000 for a house that would need a lot of work,” Bush says. “The houses that only needed minor upgrades were closer to $700,000.”

Building new: The couple decided to build new to get what they wanted and “have some control over how much we’d pay,” Bush says. The NAR generational trends report found that older millennials were more likely to buy a new home to avoid renovations and plumbing or electrical problems. To rein in costs, the Bushes declined some of the upgrades offered by the builder. In 2024, they signed a contract on a new build in a new community, paying a little more than the top of their range.

Trade-offs: “In the locations I wanted — within a good school district, near my family — I would not have been able to get the house I wanted. I had to pick what was most important,” Bush says. The couple bought farther from her family than she wanted but are in a good school district.

Work With Student Loan Debt and Compromise

When Jennifer Billock-Hyden, 42, and her husband looked for a home in Chicago, they learned how student loan debt can complicate a home purchase and that their ideal neighborhood might be beyond their means.

Making the mortgage work: While both have excellent credit, Billock-Hyden, a full-time freelance writer, still owes $115,000 in student loans. Having student loan debt doesn’t disqualify a potential borrower from getting a mortgage, but it can affect a their debt-to-income ratio, which is monthly debt payments divided by gross monthly income.

Billock-Hyden worked with a financial adviser and determined it would be easier for her husband to get the mortgage, since he had no debt. Her name is on the title, so she legally owns the property, but she isn’t responsible for the mortgage payments.

Compromising on location: The couple had been renting a two-bedroom apartment in the upscale Andersonville neighborhood. “My husband really wanted to buy a house,” Billock-Hyden says. “He’s originally from Florida and “wanted something that didn’t really exist in Chicago for under $750,000 — something in perfect condition, that needed no updates, that would have two wings so his parents could live with us,” Billock-Hyden says. “Our price point was $425,000.”

After a seven-month search they found a 1921 classic Chicago bungalow at their price point but in a less-expensive neighborhood. It included a mother-in-law suite where his parents could live and pay rent. “We probably couldn’t have afforded the house without that,” Billock-Hyden says.

Millennials who have bought homes despite challenges advise would-be buyers to look beyond traditional advice about needing 10% to 20% down or enough savings for six months of expenses. “Some of the previous financial guidance deters a lot of millennials from homebuying,” Funk says. “I was able to save $10,000 for my down payment by budgeting carefully. [A home purchase] is attainable if you have a plan.”

Stacey Freed writes about the built environment, lifestyle issues, education, and pets. Her work has been published in “The New York Times,” “Real Simple,” and “USA Today,” as well as at AARP.com and Forbes.com. She sits on the board of the American Society of Journalists and Authors.

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