Bank of America: Older millennials ‘feeling the hit’ in uneven housing market

Pity the older millennial: They’ve had a rough ride in the housing market, just like they have with most economic trends since they reached adulthood over the past 20 years. Consider: two recessions before they turned 40 years old, each on a scale rivaling the Great Depression, with the former (2008) including a massive housing bust that disrupted their lifetime earning potential and the latter (2020) unleashing the remote work era, spurring a nationwide housing frenzy that saw prices increase more than 40%. Oh, and they are also the generation saddled with the most student-loan debt. It’s not just your imagination, the Bank of America Institute wrote in a recent “Housing Morsel” report: Older millennials really are getting disproportionately screwed.

In the research note released on Monday titled: “An uneven housing market: older Millennials feeling the hit,” BofA said that younger millennials are escaping the worst of the pain.

“In our view, this is because older Millennials (aged 35-45) face a bigger financial burden,” the bank continued. “For example, this group has the biggest share of outstanding student loans, according to the Department of Education, and is seeing the fastest rise in credit card delinquencies, according to the New York Fed.” 

Take Jacob Fuerst, a 40-year-old dad, right in the middle of BofA’s range. He has already bought and sold three houses, but he told Fortune he can’t manage to do that a fourth time in this housing market. He and his wife moved to New Hampshire with their two kids and two dogs, only to realize they’d have to rent, even though they have savings. In Jacob’s case, it wasn’t student loans or credit card debt keeping him out of the market, but rather childcare costs, rent, and utilities that made it nearly impossible to save up enough money for a down payment. “I’ve worked my entire life, I’m not asking for the moon,” Fuerst told Fortune in early November. “I should be able to afford a house that is big enough for my family.”

Or take Emily Blake, a 45-year-old living in Los Angeles with her partner. They feel trapped in her rent-controlled apartment after local home prices skyrocketed. They’d thought about buying a house before affordability plummeted, but then it was too late. Her partner has student loans, which makes it harder for them to save given they’re already living paycheck to paycheck, she told Fortune. “I don’t see how we’ll ever afford a house, the prices just keep going up,” Blake said in late October, unless they were to move out of the city or change careers. 

A lot of people are struggling with unaffordable housing costs, but older millennials seem to be taking the brunt of the blow.

Rising borrowing costs

This year’s housing market, which is estimated to be the least affordable since the 1980s, is marked with mortgage rates that have more than doubled from their pandemic lows after home prices…