Minneapolis Fed says under-35 homeownership is 22%, not 37%, reshaping millennial housing reality

Millennials were supposed to be one clean story: priced out, buried in debt, always behind. But Minneapolis Fed research led by Erik Hembre punctured a key assumption. When homeownership is measured by head of household, the under-35 rate is closer to 22% than the widely cited 37%. That measurement shift matters because it changes who is actually owning, not just who lives around ownership.

Jessica Lautz, deputy chief economist at the National Association of Realtors, had been tracking the same generational fracture. After her April generational trends report came out, she told Fortune the data captured a structural change: older millennials are living a more boomer-style existence, while younger millennials are not. Lautz said she was “excited” by the Minneapolis Fed work because it “captures the change in how people are living,” with a lens on household composition rather than the structure of the home.

NAR has now split millennials into two age groups because the gap between them got too wide to summarize as one number: ages 36 to 45, and ages 27 to 35. Lautz called it a “definite split” in April. Older millennials, in NAR’s framing, have become the highest-earning, biggest-spending buyer segment in the entire housing market. Their median household income is $132,700. They’re buying the largest homes of any generation, at a median 2,100 square feet. And only 33% are first-time buyers, which is the tell. Most already own and use equity to trade up, running the same playbook boomers used for decades.

Now look at the younger cohort. They’re buying homes around 1,600 square feet, a 500-square-foot gap from older millennials. Their median down payment is 9%, versus 13% for older millennials, 19% for Gen X, and 26% or more for Boomers. That down payment gap is more than a stat, it is the mechanism that determines whether the equity flywheel can keep turning. NAR data also shows why the flywheel struggles for younger buyers: 44% of younger millennials who struggled to save said student loans delayed their purchase, 42% said high rent held them back, and 30% pointed to credit card debt. It is a three-way squeeze. Older millennials largely escaped it by buying earlier, when the math was more forgiving.

The Minneapolis Fed research underscored not only “how difficult housing affordability is,” Lautz said, but also “how difficult high rents can be in many communities.” The real-world implication is uncomfortable: even if someone wants independence, they may get pushed into a housing arrangement not seen at scale in America for more than a century. Lautz described this as “an older way of living,” and said it is bringing the country “back, perhaps, to the early 1900s,” when families doubled up at higher rates depending on the availability and cost of housing.

The “doubling up” pattern shows up in NAR data, including one counterintuitive wrinkle. Gen X, not younger millennials, is buying multigenerational homes at the highest rate (19% vs. 9% for younger millennials). The reason, Lautz explained, is a measurement issue in the Minneapolis Fed research that NAR cannot fully capture: some young adults live in multigenerational households without being the purchasers. When younger millennials do buy multigenerational homes, NAR says cost savings drives 55% of those purchases, far higher than for other generations. The takeaway is blunt: this shift is often less about family preference and more about financial necessity.

Realtor.com’s latest research adds a cultural and economic timeline to the squeeze. A record 25.2 million adults under 35 lived with their parents in 2025, nearly one in three, and the rate has surpassed the pandemic-era peak. Roughly 70% are employed, and many hold college degrees. This is not a generation opting out of work. It is working on full paychecks that still cannot clear the cost of independent housing, driven by a national median home listing price of $430,000, which is 34.4% above 2019 levels, and asking rents nearly 18% above pre-pandemic norms.

And the longer arc is not new. In 2014, Pew Research documented a milestone: for the first time in more than 130 years, American adults ages 18 to 34 were more likely to live with a parent than with a spouse or partner in their own household. That turn was “fueled primarily by the dramatic drop in the share of young Americans who are choosing to settle down romantically before age 35.” The chicken-or-the-egg question sits right at the intersection of housing markets and life choices. Is the extended adolescence to 35 due to changing behaviors around marriage, or is it driven by affordability that pushes adulthood decisions later? The data in 2025 supports the idea that housing costs are not just a background variable.

There is a boomer silver lining, but it is still a trade-off. Lautz did not frame today’s generational housing economics as purely negative, noting that Boomers appear to be upsizing and using wealth advantage. Boomers between 61 and 70 sell a median 2,000-square-foot home and buy a median 2,000-square-foot home, net change zero. Boomers between 71 and 79 downsize by just 100 square feet. Meaningful downsizing only appears among sellers 80 and older, and even they give back only 300 square feet. Lautz said Boomers want to hold onto their space, influenced by factors like hosting families and the pressures and costs of moving into retirement homes. She also added that some Boomers may be buying multigenerational homes as they recognize children and grandchildren’s affordability struggles.

Strategically, the big point for boards and executives is that these patterns do not resolve overnight. Gen Z’s homeownership rate is running slightly ahead of where millennials stood at the same age, which Lautz attributes partly to stronger uptake of government homebuying assistance programs. But she stopped short of predicting a quick fix for Gen Z, saying it is not going to be an overnight switch where the housing market changes tomorrow. Building enough smaller, more affordable housing will take roughly a decade, and an aging boomer population eventually vacating larger homes “is not the solution” on its own. In other words, if you plan around assumption-based narratives of “the millennial problem,” you miss the structural split. The under-35 reality, measured carefully, points to a longer generational affordability gap that will keep shaping demand, household formation, and market turnover long after the headlines move on.