A recently published analysis from Realtor.com showed that baby boomers---or those between the ages of 60 and 78 this year---struggled more than millennials when buying their first home.
In the report, Realtor analyzed historical home price, income, and mortgage rate data and corresponded it with contemporary estimates reported in 1981 by UPI. The analysis found that in 1980, when boomers were likely in their prime homebuying years, the mortgage rates soared past 16%. Additionally, the average monthly home loan payments jumped 34% from a year earlier.
With home prices and mortgage rates elevated at the time, boomers earning the median household income needed to spend 33.2% of their wages to make the typical mortgage payments. In comparison, mortgage payments accounted for only 22.5% of a millennial's median income.
The analysis calculated the typical mortgage payment as a share of median income, using the rate of the average 30-year fixed loan. It also assumed a 10% down payment and did not include other costs of homeownership such as property taxes and homeowners insurance.
"During the years when boomers turned 30, the share of median household income needed to make the typical mortgage payment averaged 33.2%, the highest of any living generation," the report read.
"In contrast, millennials on average faced the lowest mortgage burdens, thanks to a decade of ultralow interest rates following the Great Recession," the report continued.
Why Many Millennials Aren't Homeowners
Despite having better mortgage rates, the analysis noted that the current housing market is the "least affordable in 40 years," primarily due to a lack of inventory, which leads to higher home prices.
"Buyers in today's market face high prices, high mortgage rates, and low levels of affordable inventory, making it exceptionally challenging to purchase a home as a first-time buyer," Hannah Jones, senior economic analyst at Realtor, said.
Furthermore, the report also noted that fewer millennials bought homes due to unstable prices following the housing crash of the late 2000s and the post-recession labor market.
"They got to their 30s at the worst time possible for buying a home. You're coming out of the Great Recession, and you've got a pretty weak labor market as a consequence," David Clark, a former economics professor at Marquette University, said in the report. "They're saddled with some pretty significant college debt. And finally, this was not a smart time to buy a home, when prices were going down."