Millennials Aspire, but Less Likely to Own Principal Residence
A significant majority of Affluent investors across all wealth levels own a principal residence. Millennials, regardless of net worth, are less likely than their older counterparts to be counted among homeowners, according to Asset Allocation, Portfolios and Primary Providers.
Just half of Mass Affluent Millennials with a net worth between $100,000 and $1 million (not including that primary residence) report that they own a principal residence. This is down from 2014, when 62 percent indicated they owned a principal residence. In comparison, 70 percent of surveyed Gen Xers own a principal residence, as do nine-in-ten of Baby Boomers and seniors.
But even wealthier Millennials are lagging behind their elders. Among surveyed Millionaires ages 35 and under (with a net worth between $1 million and $5 million), 79 percent own a principal residence, compared with 84 percent of Gen Xers, 92 percent of those ages 45-54, and 95 percent each of Baby Boomers and seniors ages 65 and up. Last year, 86 percent of Millennial Millionaires reported owning a principal residence.
Age-wise. the homeownership gap is not as wide among Ultra High Net Worth investors with a net worth between $5 million and $25 million. Nine-in-ten of the youngest ULHW Millennials own a principal residence, compared with 95 percent of those ages 48-54, 98 percent of Baby Boomers and 95 percent of seniors.
For Millennials, owning a principal residence is one of the aspirational tenets of the American Dream, according to a separate survey we conducted last fall. Forty-four percent of respondents under 40 define the American Dream as being a homeowner (vs. roughly43 percent of Gen Xers and Baby Boomers, and 47 percent of seniors.
Interestingly, among Millionaires and Ultra High Net Worth investors analyzed by age, Millennials are more likely than their older counterparts to report owning a second/vacation home. Forty-two percent Millionaire Millennials report owning one, compared with just 18 percent of Gen Xers, 27 percent of Millionaires ages 45-54, 23 percent of Baby Boomers and 21 percent of seniors.
Among UHNW investors who own a second/vacation home, the highest percentage (45 percent) are the youngest, compared with 39 percent of UHNW respondents ages 48-54, 29 percent of Baby Boomers and 37 percent of seniors.