In our 2015 edition of Paycheck to Paycheck, released today, we focus on housing affordability for millennials, the much discussed and stereotyped generation of young adults. Millennials, adults who were between the ages of 18 and 33 in 2013, make up about one-third of the U.S. workforce, and that share will grow as older workers retire and younger millennials finish their education and replace them in the labor market. We used data from the U.S. Census Bureau’s 2013 American Community Survey to examine the demographic characteristics of this group to find that, contrary to their frequent portrayal in popular culture, this cohort is much more diverse than the archetype of the young urban hipster would indicate.
Millennials, as a group, are more ethnically and racially diverse than the previous generation. About 58 percent of the millennial labor force is white, compared to nearly 67 percent of older workers. About one-third of millennials live with their parents; another third live with roommates, relatives or in a group setting; and about a quarter of millennials live with a spouse or partner. Nearly 44 percent of millennial heads of household have children. They’re also attaining higher levels of education than their older counterparts. The share of older millennials (those aged 25 and over) with a bachelor’s degree or higher is greater than that for older adults. Despite their higher educational attainment, however, employed millennials’ median income of $22,000 is only slightly more than half that of older workers. And more than one-third of employed millennials earn less than $15,000 per year. Surveys indicate that many millennials would like to buy homes, but only about 30 percent of millennial heads of household are currently homeowners.
This year’s Paycheck to Paycheck examines five occupations in which millennial workers are heavily represented—administrative assistant, retail cashier, e-commerce customer service representative, food service manager, and cardiac technician. Administrative assistants earning the median income for their occupation can afford to rent a typical two-bedroom home in 82 percent of the 208 metro areas covered by the report but can only afford to buy a median-priced home in 43 percent of these areas. Retail cashiers, earning the lowest median wage of the highlighted occupations at $20,432, cannot afford to rent a two-bedroom unit or to buy a median-priced home in any of the 208 metro areas in the report. The highest-paid occupation, food service managers, fare best, as they can afford to rent a two-bedroom home in most metro areas, but even they can only afford to buy a median-priced home in 35 percent of the 208 metro areas.
Finally, the report discusses the implications of unaffordable housing for millennial workers and the economy overall as well as offers potential policy solutions to address housing unaffordability for both renters and homeowners.