Short of cash and unsettled in their careers, young Americans are waiting longer than ever to buy their first homes. The typical first-timer now rents for six years before buying a home, up from 2.6 years in the early 1970s, according to a new analysis by the real estate data firm Zillow. The median first-time buyer is age 33—in the upper range of the millennial generation, which roughly spans ages 18 to 34. A generation ago, the median first-timer was about three years younger. The delay reflects a trend that cuts to the heart of the financial challenges facing millennials: Renters are struggling to save for down payments.
Increasingly, too, they're facing delays in some key landmarks of adulthood, from marriage and children to a stable career, according to industry and government reports. These shifts help explain why homeownership is now at a 48-year low of 63.4%, according to the Census Bureau. And when young adults do sign the deed, their purchase price is now substantially more, relative to their income, than it was decades ago. Millennials are "still very interested in buying a house, but they're delaying that decision," says the chief economist at Zillow. "Once they start having kids, they begin looking for homes. We're also finding that—given how much rental rates are currently rising—a lot of folks are having a hard time saving for a down payment and qualifying for a mortgage."