Better Mortgage/Urban Institute Study Reveals Obstacles to Millennial Homeownership

July 11, 2018

NEW YORK--(BUSINESS WIRE)--Jul 11, 2018--Today, the Urban Institute, made possible by a grant from Better Mortgage, has published a study on Millennial homeownership, the results of which have broad-based consequences for both a private sector industry trying to modernize and a public sector with antiquated policies. Better Mortgage, a digital mortgage company trying to make homeownership an option for more people, chose the Urban Institute to conduct this research because of their phenomenal dedication to elevating the debate on social and economic policy.

In this report, arguably the most definitive study of its kind, Millennials were found to face several obstacles to homeownership compared to previous generations, with minorities particularly impacted. If not addressed by the mortgage lending industry, government, and civil society, low homeownership will severely diminish the ability of Millennials to achieve long-term financial security.

“At Better, we are committed to expanding access to home finance to all Americans and believe it’s vitally important to understand the challenges facing every homebuyer,” said Vishal Garg, CEO and co-founder, Better Mortgage. “The Urban Institute findings prove our hypothesis that Millennials are not as involved in homeownership and unless we tackle this now they’re at risk of becoming a ‘financially lost generation’.”

To address these issues, Better has also launched its #SpentOnRent campaign, to mobilize a call for change and increase Millennial homeownership. More information can be found at better.com/spentonrent.

In addition to the oft-cited obstacles such as student debt, tightened credit standards, and the increasingly limited availability of affordable housing in desirable cities, the report explains how the unique demographic and socioeconomic characteristics of Millennials, as well as this generation’s shifting attitudes towards homeownership itself, have led to an overall low rate of homeownership, when compared to previous generations.

Key findings from the report include:

The Millennial homeownership rate is 8% lower than Baby Boomer/Gen X generations, totaling 3.4 million fewer homeowners. High student debt has reduced Millennials’ likelihood of owning. 45.6% of Millennials have borrowed money for education and about 36% of Millennials currently owe student debt, compared to 18.0% for Gen X and 4.1% for Baby Boomers. Millennials are more racially and ethnically diverse than previous generations, and minorities have almost 15% lower homeownership rates than whites. Between 2000 and 2015, black homeownership rate fell by 9.7%, significantly higher than the drop in the homeownership rate of three race/ethnic groups during this period. Only black households did not experience an increase in homeownership during the housing boom.

Millennials currently represent the largest generation in U.S. history, yet demonstrate lower homeownership rates than the previous two generations. Using industry data, the report offers a detailed analysis of the primary factors leading to this disparity, along with recommendations for how these issues can be mitigated in both the public and private sector. These factors include how Millennials often live in high-cost cities where the housing supply is inelastic. Millennials are also more likely to delay marriage and have children. Notably, race and parental ownership also play significant roles in the likelihood of a Millennial owning a home.

Based on the report’s findings, The Urban Institute has outlined the following policy recommendations to improve Millennial homeownership rates:

Enhance financial knowledge and homeowner awareness by providing accessible and engaging online training and well-designed financial education at the high school and college level. Streamline and increase the efficiency of the mortgage process through the use of FinTech. Include rental and utility payment history data, in order to comprehensively evaluate Millennials’ creditworthiness and fully capture income in the underwriting process. Change land use and zoning regulations to allow for more construction, particularly in areas with a restricted supply of housing.

Better Mortgage plans to use the findings contained within this report to advocate for more extensive changes within the private and public sector, offering a call to action to its fellow lenders, elected officials, and policymakers.

“The private sector needs to play a more active role in advocating for change, rather than waiting for inventory to free up or the rate environment to shift,” added Garg. “We will continue to work with public officials and institutions to discuss policy recommendations, and we call on private institutions to join us in educating the public and confronting issues, like financial discrimination, head on.”

Click here to download the full report.

About Better Mortgage

Launched in 2016,  Better.com  is a full stack mortgage lender digitizing every step of the home financing process to make homeownership more affordable and accessible. Backed by Kleiner Perkins, Goldman Sachs, and Pinebrook, Better is focused on customer advocacy, putting consumers back in control of the most important financial decision of their lives. Recently named Best Mortgage Lender for Customer Service by Nerdwallet, Better has an intuitive online platform, complemented by non-commissioned staff that guide customers through the process, starting with how much house they can afford or how much they can save through to close, completely jargon-free with airtight certainty and the best rate possible. For more information, follow us on  FacebookTwitter  and  LinkedIn.

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Erica Dumas



Perry Goldman




SOURCE: Better Mortgage

Copyright Business Wire 2018.

PUB: 07/11/2018 09:36 AM/DISC: 07/11/2018 09:36 AM


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