While 87% of millennials dream about owning a home one day, their homeownership levels are a meager 34%. It’s the lowest they’ve been for this age group in over 30 years. Quite simply, the dream of buying their first home is becoming a bridge too far for too many. Here are the 5 leading roadblocks millennials are facing…

1. Too expensive.

Getting into the housing market is far too expensive for the vast majority of people and incomes can’t keep up. While Toronto housing prices continue to grow at breakneck speed – even through the pandemic – incomes aren’t faring nearly as well and aren’t even close to keeping up. Surprisingly, Canadian housing is the least affordable in the world. Our gap between house prices & income growth tops the list of high-income, advanced economies. It’s definitely not a world list we want to be leading, and it makes the dream of homeownership a daunting one for far too many Canadians today.

2. Too much student debt.

Even though many millennials are well into their careers – with some approaching their 40th birthday – almost 25% are still burdened with student debt. It’s a major roadblock to saving enough for a down payment for buying their first home and qualifying for a mortgage, which brings us to number three…

3. Too hard to qualify for a mortgage

The standard rule for mortgage lending is that borrowers shouldn’t spend more than 35% of their gross income on mortgage payments, property taxes & utilities. Today, Toronto housing costs would eat up 66% of the median pre-tax household income. For millennials lucky enough to qualify for a mortgage, they then get locked in for decades. They also risk being house poor and are forced to prioritize paying off a huge debt over embracing the experiences and lifestyle they want.

4. Single and waiting

Many millennials are holding off on their dream of homeownership until they’ve met their life partner. They’re also getting married later in life and delaying having children which are contributing to more Millennials living with relatives to save money. In 2018, 22.5% of millennials were living at home — an increase of 9% since 2005.

Life events like marriage or having children are typical triggers of buying a home. The longer millennials live with parents or independently, the more they’re delaying the dream of homeownership.

5. A different definition of home

Millennials are making many different lifestyle choices than previous generations – from prioritizing health, wellness and experiences over things, to delaying marriage and having kids – so it’s not surprising they’re approach to homeownership is different too.

Instead of large suburban homes, today’s aspiring first-time homebuyers are attracted to city living. They also prefer smaller, more modern alternatives in thriving areas where everything they need and want is a walk away.

In addition to loving open floor plans, millennials are partial to clean lines, minimalist, low-maintenance designs, environmentally responsible buildings, and sleek, discreet appliances, instead of ornate and elaborate design.

So, where does this leave aspiring millennial homeowners? It’s clear they face some big roadblocks to homeownership. For far too many, the traditional route to homeownership no longer fits their budgets or needs. That’s why new emerging models like Key are resonating so strongly.

Instead of wasting years saving for a huge down payment – or getting locked into huge debt – they can start owing years sooner without sacrificing their lifestyles. Don’t take my word for it though. Hear for yourself what millennials are saying about Key and see if our homeownership-on-demand model is right for you.