Millennials Suffer Another Big Blow Towards Building Retirement Wealth

What about housing wealth?



First, there was significant student debt, then jobs that didn’t pay a living wage,  job insecurity and the rise of the gig economy.

The net effect of all these factors is that millennials now say they will be renters for years, some say forever. Even worse,  this will have a definite impact on building retirement wealth and whether some Millennials will be able to retire at all.

The latest bad news comes from a survey by Apartment List’s 2019 Millennials & Homeownership Report that analyzed the attitudes, expectations, and actions of over 10,000 millennial renters in the U.S.

The new report found the following:

  • One in eight millennial renters expects to rent forever (up from one in nine just a year ago). But of those who expect to purchase a home, 48% have not yet started saving towards a down payment.
  • At current savings rates, just 25% of millennial renters will be ready to put down 10% on a median-priced starter home in the next five years.
  • Forgiving student loan debt would be a major boon to millennial homeownership. If debt payments were instead put towards savings, we estimate the percentage of millennial renters ready to buy a home would rise from 25% to 39%.
  • To cope with high costs, 17% of millennial renters expect down payment support from family, but this is down from 19% in 2019. Plus, those who expect assistance are now expecting less: $9,000 on average in 2019, down from $10,000 last year.

Not surprisingly, the report said 70% percent of renters say affordability is the reason they have not yet (or will never) purchase a home.

“Furthermore, student debt continues to be a barrier and millennials are expecting lower levels of financial assistance from parents than in prior years. Taken together, these statistics indicate that millennials are very unlikely to catch up to previous generations in homeownership in the coming years-especially if the United States experiences another recession.” 


Connection Between Housing Wealth and Retirement Security

While there are significant benefits and expenses associated with homeownership, owning a home has traditionally been part of the American Dream.  But that has obviously changed.

Homeownership provides the opportunity for asset appreciation, tax deductions of interest payments, and the ability to access a reverse mortgage later in life.

While this study addresses rental patterns among millennials, other studies have tracked baby boomers and found that when baby boomers planning to retire, housing wealth accounts for a majority of their net worth, outsizing portfolio wealth.

Numerous academic and government studies show that home equity has a paramount role in determining overall household wealth, especially among people over age 55 who have the highest percentage of homeownership. A 2002 study found that 82% of those in the study who were age 60 to 64 owned their own residence, with typical home equity of $120,000. A 2004 survey of consumer finances found that Social Security accounted for 42% of total wealth for a typical family approaching retirement (sample household headed by a person aged 55 to 64), followed by the principal residence (21% of total wealth), as cited in the paper, “The Impact of Diminishing Wealth on Future Consumption: How Housing Wealth Affects Retirement Planning.”

Then, there is also the benefit of accessing a reverse mortgage if a person owns a home.   Reverse mortgages allow the owner to access the equity in their home without paying money out of their budget. These also are asset-based loans and secured entirely by the home. They are attractive because there are no monthly mortgage payments. This is one reason why reverse mortgages are attractive to people with low incomes. Another is that homeownership can also be used to pay Medicaid expenses via a reverse mortgage.

The net message here is that another generation will have a find a new way to fund their retirement, as they also re-think their current job opportunities, how to cope with wage stagnation and future ways to pay bills in retirement.

All this is also shaping election preferences and how cities operate with more rental housing and affordability issues. So far, only a very few politicians have even offered any potential solutions.







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Chuck Epstein has managed marketing communications and public relations departments for major global financial institutions and participated in the launch of industry-changing financial products. He also has written by-lined articles for over 50 publications, five books and served as editor and publisher of nation’s first newsletter on the topic of using the PC for personal investing and trading. (“Investing Online, 1994-1999). He also is a marketing consultant, writer and speaker on topics related to investor protection and opportunities in the very dynamic cannabis industry. He has held senior-level marketing, PR and communications positions at the New York Futures Exchange, Chicago Mercantile Exchange, Lind-Waldock, Zacks Investment Research, Russell Investments and Principal Financial. He has won national awards from the Mutual Fund Education Alliance (MFEA) and his web site,, was named best small blog in 2009 by the Society of American Business Editors and Writers (SABEW).


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