Estimated read time: 4-5 minutes
SAYRE, Pa. — A majority of millennials believe homeownership is out of reach for their generation, and their pessimism about the housing market is increasing at an alarming rate.
A new study from Real Estate Witch found that only 21% of millennials think it's possible for their generation to buy a home — a percentage that's dropped by more than half since 2024, when 52% of millennials thought homeownership was within reach.
Although 97% of millennials face financial difficulties, most are not giving up on their dream of owning a home. Around 74% of millennials say homeownership is still part of the American dream, and 62% say they'd consider themselves failures if they never owned a home.
Millennials regard home buying as an important milestone, but the 2025 housing market presents significant challenges.
Of the 97% of millennials who say they face barriers to homeownership, the top three problems cited are all financial. Fifty-two percent say homes are too expensive, 48% say interest rates are too high, and 44% say it's too difficult to save for a down payment.
Millennials' money problems are made worse by record levels of college debt this generation carries. Overall, 73% of millennials have some form of non-mortgage debt, with 38% owing $10,000 or more.
This has severely limited their ability to save. About 39% of millennials have less than $10,000 saved, and 8% have no savings.
Millennials are shopping with their limited budgets in a housing market that's experienced significant increases in home prices since the pandemic, as well as mortgage rates that are well above average over the past few decades. It's no wonder this generation is finding it difficult to gain a foothold in the real estate market.
Concessions for home ownership
Two-thirds of millennials can't afford the median home price of $420,000, with another two-thirds planning to purchase a home that's less than $400,000. That's up from 57% of millennials who planned to buy in that price bracket in 2024.
And 67% of millennials say buying a home makes them feel in over their heads financially, while another 67% regret not buying a home when prices were lower.
Amid their money struggles, millennials have adjusted their standards for a home. A surprising 41% say they'd buy a home with asbestos, a potentially fatal pollutant, while another 41% say they'd buy a home with pests, such as mice, cockroaches or spiders.
Forty percent say they'd buy a home with a leaky roof, while 35% say they'd consider buying a home with foundation issues.
Clearly, desperation has set in for many millennial home buyers. Making rash or desperate decisions, however, often leads to regret. Eighty-two percent of millennials who previously bought a home regret their purchase. That figure starkly contrasts the 81% of millennials who say they're confident they'll have zero regrets about purchasing a home in 2025.
Confidence for home ownership
Despite millennials' struggles, many agents maintain the market isn't as tough as it may seem. Marianne Bornhoft, a real estate agent based in Spokane, Washington, who's worked with many millennial buyers, believes a lot of millennial dread about becoming homeowners is related to a lack of understanding about the home-buying process.
"I think it's that education piece they're missing, and maybe that's why they don't have the confidence," Bornhoft says." Once you start giving people the tools and the education they need to go forward to buy a house, their confidence increases so much."
Bornhoft says anxiety about not having enough for a down payment is common among millennials, but many mortgage programs require 0% to 5% down. Many millennials could also benefit from home buyer rebate programs.
"Talk to a mortgage broker. Talk to a credit union. Talk to a bank," Bornhoft says. "Talk to one of each because each one is going to have a different product and different opportunity that you may not know about. I wouldn't limit yourself when it comes to finding what type of financing might be available for you."
Erin Krueger, a Nashville-based agent, urged wavering millennials to be decisive and to think ahead.
"Don't let the current headlines deter you," she says. "Start where you are, make informed decisions, and remember that owning real estate is a long-term investment in your future. While waiting for the 'perfect time' to buy might seem wise, the reality is that home prices and interest rates are unpredictable. If you're in a position to purchase now, even a small starter home can be a stepping stone to building equity and securing your financial future."
