Higher education proving strong contributing factor for millennial homeownership.

According to a recent study by First American Financial Corporation, there are fundamental and long-term drivers of housing demand that will position the housing market to rebound from the current challenging economic conditions, with one of those drivers being education. If education is the key to a more secure financial future, and in turn homeownership, then millennials are on the right track according to First American Deputy Chief Economist Odeta Kushi. “Millennials’ pursuit of higher education is good news for the housing market in the long run, because education is the key to unlock both greater earning power and, in turn, homeownership," said Kushi.

The millennial generation—those between the ages of 25 and 40 in 2021— is the largest living adult generation. While many millennials are well into their careers, others are still in school. According to First American's research, millennials are the most educated generation in American history. Nearly 40% of millennials have a bachelor’s degree or higher, compared with 32% of Generation X, and 15% of baby boomers when they were the same age. Millennials have delayed key lifestyle decisions in favor of investing in the pursuit of education, pushing marriage and family formation to their early-to-mid-30s. Previous generations made these lifestyle choices in their 20s. Marriage and family formation are two of the most powerful motivations for homeownership, so these delayed lifestyle choices tend to also delay the desire for homeownership. However, when the time comes to become a homeowner, the earning power benefits of higher educational attainment are real. In 2020, millennials with a bachelor’s degree had a median household income of over $100,000, while those with at least a graduate degree had a median household income of over $120,000. Compare those income levels with the median household income of millennials with just a high school degree (or some college) of $60,000 and the earning power benefits of higher education are undeniable. The income difference is even more stark when compared with millennials with no high school degree, who have a median household income of $35,000, further underscoring the importance of and connection between educational achievement and earning power.

Source: MReport