Redfin: Rising housing costs erase millennials' affordability advantage over baby boomers
RKT•RKT•RKT•RKT•Redfin's analysis found that elder millennials' homebuying affordability advantage over baby boomers reversed after the pandemic, with payments reaching up to 35% of income for millennials versus roughly 25% for boomers after mortgage rates topped 6% in 2022.
Redfin's Nov. 12 analysis found elder millennials' homebuying affordability advantage over baby boomers reversed following the pandemic. At age 30, elder millennial buyers spent about 27% of their income on housing, compared with 36% for boomers; since mortgage rates exceeded 6% in 2022, millennial payments reached up to 35% of income, versus roughly 25% for boomers.
Mortgage rates climbed from around 3% in late 2021 to nearly 7% in late 2022, while home prices rose about 40% during the pandemic. Redfin said falling rates gave boomers decades to refinance, while higher borrowing costs left later millennial buyers with heavier payments and excluded many prospective buyers.
