Millennials face significant barriers to home ownership, according to the report’s authors. These include high education debt, high rental costs, tight credit standards for mortgages and a shortage of affordable housing in urban, metropolitan areas.
But there are other factors. Millennials are delaying marriage and childbearing, two factors that increase the probability of owning a home.
The report quantifies how current factors affect home ownership. For example, a 1 percent increase in student loans lowers the likelihood of owning a home by 0.15 percentage points. Fewer marriages in 2015 compared to 1990 lowered home ownership by 5 percentage points.
Fewer millennials started becoming homeowners as the freelance economy was grew. Over 15 million people have reported being self-employed since 2015, according to the Bureau of Labor Statistics.
As the freelance economy continues to grow at a steady pace,, many millennials have had no other choice but to rely on a gig-to-gig type of income to support themselves. Not having a steady income, makes it harder to save up towards a down payment to own a home while paying other financial obligations like student debt.
“Most millennials have those burdening student loans that make it impossible to make other investments because is like they have this dark cloud over their heads” said William Neal, 24, who works as a freelancer in the TV industry and lives in Miami with his parents.
“In urban areas, it’s not realistic for a young person to buy a home. It’s way too expensive. For a middle class person, it’s impossible, especially if you have student loans,” said Neal, who has no plans of owning property any time soon.
Dumas, who is also a millennial herself, considers financial literacy as a crucial first step towards motivating millennials to own homes.
The report suggests several ways to promote home ownership among Millennials.
One, says Vishal Garg, CEO of Better Mortgage, is to rethink current credit standards, which he argues are too inflexible and should include other factors.
“Why do the two things I pay for all the time, like rent and cellphone, not count towards my credit score,” said Garg.
Another way is through financial literacy, starting in high school, and using technology to facilitate the complicated mortgage process.
When Christian Portilla, 28, and her wife Melani Liriano first started saving to buy their house in Miami, Florida, Portilla said she had not been educated on what steps to take to save up towards a down payment or about the benefits of owning a home.
“When the housing bubble exploded, my mom’s house went to foreclosure. I was naive. I didn’t understand the terms. I just knew I had lost a home,” Portilla recalled, but the bittersweet experience didn’t discourage her from owning a home.
“In my mom’s case, she had no support. With myself, I have the support of my wife,” said Portilla who works as a freelance journalist in Miami.
It took one year of really strict budgeting for the couple to save up the money they needed for the down payment, as they had to pay for their student loans, rent and other expenses.
“I remember that we made into like a challenge. How could save up more?” Portillo, 28, told NBC. “We wouldn’t eat out. We would literally save every penny. It started getting easier when we saw the savings account going up.”
“Once we see value in something, we see it is attainable,” said Erica Dumas, head of public relations at Better Mortgages.