45 Percent of Millennials Say That Living Costs Hold Them Back From Buying Homes

Forty-five percent of prospective Millennial home buyers say that the cost of living inhibits them from purchasing a home, according to a survey released on Wednesday.

While 45 percent of individuals who are aged 23 to 38 told personal finance site Bankrate that the cost of living impedes a home purchase, only 38 percent of Generation X respondents agreed, which was above the 31 percent of Baby Boomers who concurred.

More than other generations, Millennial respondents also used retirement savings to pay for their first house.

"Tapping into retirement savings is a risky move that can put your future at risk," Deborah Kearns, a mortgage analyst at Bankrate, said in a press release. "You might be better off looking into down payment assistance programs, special low-down payment loan programs or buying a less expensive home to keep your costs more affordable."

The survey reinforces prior research that has found the price of housing is rising at a rate that surpasses inflation.

In 1980, the median home value was $47,200, according to Census data. By 2000, it was $119,600. And, as of July, the median price of a new home was $312,800. (Both the 1980 and 2000 figures are shown as unadjusted, not current, values.)

In contrast, real wages, which are wages after adjusting for inflation, have been nearly stagnant for four decades. At the same time, other major expenses, like the cost of college, have skyrocketed. Public institutions cost about $12,000 before scholarships and grants in the 1998-1999 school year, according to the College Board. As of the 2018-2019 academic year, those costs had risen to an estimated $21,370.

And higher education debt, which 23 percent of Millennials interested in buying a home told Bankrate was hindering their purchase of a permanent residence, is mounting.

Rising financial strains have generated concerns for Millennials, including Eliza Theiss, the author of a PropertyShark survey released last month, which found almost one-third of individuals who are at least 45 have struggled to afford housing costs in the last year.

"If this is the situation now, when we're technically in a good economic situation, what's going to happen when the downturn hits?" Theiss asked while speaking to Newsweek. "I'm a Millennial. It's rather interesting to see Boomers, [who benefited] from pretty great years from an economic perspective, and this is their financial outlook for retirement. So what about Millennials?"

Twenty-eight percent of Americans lack any emergency savings.

Bankrate Chief Financial Analyst Greg McBride previously told Newsweek that, despite a historically long economic recovery, shaky confidence in the economy and the dearth of emergency funds indicates "rising economic tide has not lifted all ships."

Millennials, more than their older counterparts, are less likely to have $1,000 in emergency savings, meaning a recession could hit them particularly hard. And signs that Trump's trade war is harming global confidence -- in addition to the direct impact it's having on U.S. consumer prices -- have increased analyst concerns about a possible recession.

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A foreclosed home in is shown in Chicago, Illinois, on June 29. John Gress/Corbis via Getty Images
45 Percent of Millennials Say That Living Costs Hold Them Back From Buying Homes | U.S.