Despite Higher Payments, Millennials Enjoy Lower Mortgage Rates

Millennials, the generation dubbed “unluckiest” after entering the workforce during the Great Recession, may have caught a break in the housing market. A recent Freddie Mac report revealed that millennials have snagged lower mortgage rates than their baby boomer counterparts.

Hold on to your hats, folks, because this is a twist no one saw coming! Despite boomers’ love for refinancing, their average mortgage rate is 4.1%, slightly higher than the 4% rate secured by both millennials and Gen Xers.

Even the silent generation, the generation before the boomers, is ahead of the game with a 4.3% average rate. Meanwhile, Gen Z, the youngest generation, is feeling the burn with a 4.9% rate. This isn’t surprising, as the oldest Gen Zers, now 27, probably bought their first homes during the recent mortgage rate spike.

On the flip side, millennials, currently between 28 and 43, likely jumped into the housing market between 2011 and 2021 when rates were historically low, often below 5%.

However, this silver lining has a cloud. While millennials might have lower rates, their monthly payments are the highest of any generation, thanks to their larger loan amounts. They’re shelling out an average of $1,900 per month on a whopping $290,000 loan!

In comparison, boomers are only paying $1,500 on a $229,000 loan, even though they refinance more often. The silent generation, with the smallest average loan amount of $195,000, enjoys the lowest monthly payment of $1,200.

But don’t count millennials out just yet. They’re about to enter their prime earning years, typically between 45 and 54, when salaries peak. And there’s more good news: some economists believe millennials may already be the highest-earning generation ever for their age, despite facing the Great Recession and the pandemic.

If this trend continues, millennials could turn the tables on their financial woes and secure their position in the housing market. So, while the present might be a struggle, the future looks bright for this resilient generation.