Young People Don’t Own Homes

The frequent refrain today is that young people — Millennials, Gen Y, Gen Z, whatever you want to call them — don’t own homes or care to own homes. That may be true for some markets, particularly where the costs of purchasing make renting more economically sensible, but it certainly isn’t true across the board. How do we know? The Consumer Expenditures Survey, or CES.

What is this survey and what does it measure? To quote verbatim from the Bureau of Labor Statistics website, “the Consumer Expenditure Surveys program provides data on expenditures, income, and demographic characteristics of consumers in the United States. CE data are collected by the Census Bureau for BLS in two surveys, the Interview Survey for major and/or recurring items and the Diary Survey for more minor or frequently purchased items. The (CES) is the only Federal household survey to provide information on the complete range of consumers’ expenditures and incomes.”

And now to the critical question: what does the CES say about young adult homeownership?

To answer, let’s take a look at the latest survey results, focusing on the breakdown of homeownership by age ranges. We’ve charted the data below.

And what do we see. The homeownership segment for consumers under 25 is quite small indeed. Only 11% of the survey population are homeowners, and of that group only 4% have a mortgage (the market segment of interest to mortgage lenders). However, compare that to the 25-34 demographic. Homeownership jumps from 11% to 41%, with 34% making use of a mortgage. This represents a sizable shift and a viable, lucrative market.

So … what is your credit union to do to capture loans as renters move on to homeownership? For a number of credit unions the tendency is to wait until a properly seasoned member knocks on the door of the mortgage loan office and asks for a loan. That is an ill-advised strategy. The “wait and see” approach will not work. You can do better than that – and you need to start with outreach to the under 25 market. It is never too early to build awareness.

Perhaps the best way to develop, or at least catalog new strategy ideas is to look at the providers who seem to be doing well capturing this market. One example? SoFi ( We encourage you to look at their marketing, and positioning for home loans. You’ll find their resources here for general mortgage information ( and here for consumer education and support (

Also…watch their borrower story video below. It is very good. It focuses on showing that homeownership is attainable, and does not mean an end to social life. Good messages for young consumers contemplating (or fearing!) the transition from renting to owning.

SoFi Tells a Mortgage Story

And one more anecdote to share about approaching this market. We looked at one credit union’s efforts at attracting young homebuyers. What benefit were they offering to entice people to attend an in-person homebuyer seminar? A discount on future closing costs. We’ll cover the income side of the CES in greater detail in another post, but for now let’s just say that those younger borrowers could use cash today, not closing cost discounts tomorrow.

What is a better alternative? How about a prepaid gas card to cover the fuel costs for searching for a home? Something like this puts the credit union in the car with the young buyer as he/she/they look for the “home of their dreams.” Not a bad place to be.

So, apparently young people are buying homes after all. Feel free to ignore those experts that tell you young people will, now and forever, only rent.

Interested in downloading CES data and digging in? You’ll find it here:

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