Millennials Now Top Mortgage-borrowing Generation

By dollar volume, millennials now take out more mortgage money than any other generation, according to a study by They have surpassed both Generation X and the baby boomers.

SANTA CLARA, Calif., – Feb. 25, 2019 – By dollar volume, millennials now take out more mortgage money than any other generation, according to a study by They have surpassed both Generation X and the baby boomers. based its analysis on data about residential mortgage loan originations from Optimal Blue, show that while the median home buying price millennials take on is still lower than that of Generation X or baby boomers, millennials are showing interest in more affordable markets. Additionally, millennials are making lower down payments and taking on larger mortgages when compared to Gen Xers and baby boomers.

“Millennials are getting older, with better jobs and deeper pockets, allowing them to expand their collective purchase power, and hence, their footprint in the market,” says Javier Vivas, director of economic research at

“The stereotype that millennials primarily choose to buy homes and live in large metro areas isn’t the reality,” he adds. “Results show millennials’ expansion is more heavily conditioned by affordability than in prior years, so their eyes are set on less traditional secondary markets where homes and jobs are now available and plentiful.”

Affordability is such a key factor for millennial homebuyers that they’re moving to places previous generations have not, like Buffalo, N.Y., the top affordable market for millennials, according to’s study.

Millennials’ increased buying power

Millennials are still primarily in the life stage that requires starter homes. Despite a lower median purchase price ($238,000) than the two generations before them, (with baby boomers and Gen Xers spend an average $264,000 and $289,000, respectively), millennials are increasing their purchase price at a faster rate than previous generations which suggests that they’re starting to move beyond starter homes.

Since early 2017, millennials have been the largest mortgage purchasers by the number of loans originated, surpassing Generation X as the leader in January 2017. As 2018 came to a close, millennials took on nearly half (45 percent) of all new mortgages, compared to 36 percent for Generation X and 17 percent for baby boomers.

In November 2018, millennials finally overtook Generation X as having the largest share of new loans by dollar volume – 42 percent in December compared to 40 percent for Generation X and 17 percent for baby boomers.

Millennial home buying driven by affordability

In addition to increasing their buying power and taking on larger mortgages, the data shows millennials have consistently made lower downpayments than other generations since 2015. While other generations have increased their downpayments in response to rising prices, millennials have not been able to do so.

Millennial downpayments averaged 8.8 percent in December 2018, compared to 11.9 percent for Generation X and 17.7 percent for more equity-rich baby boomers. The downpayment challenge for millennials is a likely reason they’re moving more to affordable markets where their money goes further.

Top U.S. markets for homebuyers varies by generation

Within the last year, millennials have moved to affordable areas with strong job markets where they have more buying power. At the end of 2018, the median price of a mortgaged home purchased by millennials was $238,000 – $26,000 less than the median price of a home mortgaged by baby boomers ($264,000) and $51,000 than Generation X ($289,000). The top five markets where millennials now generate more than 50 percent of the mortgages:

  1. Buffalo, N.Y.
  2. Pittsburgh
  3. Milwaukee
  4. Cincinnati
  5. Columbus, Ohio

Members of Generation X are in their prime income-earning years, and they purchased homes in strong job markets and secondary home markets, with five of the 10 markets on the list having unemployment rates higher than the national rate of 3.7 percent. The top five markets where Gen X purchased a large and/or growing share of homes are:

  1. Los Angeles
  2. Providence, R.I.
  3. Bridgeport, Conn.
  4. Jacksonville, Fla.
  5. Atlanta

Many boomers are retired or rapidly approaching retirement, and therefore, showed a strong preference for buying homes in markets within primarily low-tax states or markets that are lower-cost than nearby metros, presumably to maintain wealth earned during their working years throughout their senior years. The top five markets where boomers made up a large and/or growing share of mortgaged purchases are:

  1. Knoxville, Tenn.
  2. Sacramento, Calif.
  3. Memphis, Tenn.
  4. Oklahoma City
  5. Riverside, Calif.

© 2019 Florida Realtors®. All rights reserved. Reprinted with permission.

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