Impact of ethnic and cultural diversity on millennial living preferences and homeownership

Abstract

Purpose This study aims to examine living preference and tenure among millennials, with a particular focus on the impact of ethnic and cultural diversity on housing outcomes including observed homeownership inequalities. Design/methodology/approach Using the individual panel data from three waves in American Housing Survey, 2015–2019, this study compares the likelihood of co-residing among Asian and Hispanic millennials with non-Hispanic white millennial peers. Furthermore, this study estimates the effect of co-residence on homeownership across generational and ethnic backgrounds. Findings This study finds a preference for coresident adult familial households among foreign-born Asian and Hispanic millennials, and US-born Hispanic millennials when compared to their non-Hispanic white millennial peers. The results are robust after considering neighborhood selection bias, affordability and education. The effect of co-residence on ownership is significant and positive, suggesting this living arrangement contributes to homeownership across all generational and ethnic groups. Practical implications Housebuilders should be aware of Asian and Hispanic millennials’ increased appetite for extended family living arrangements and consider increasing the physical size of affordable or workforce-oriented rental housing and new single family construction to accommodate more adult co-living arrangements. Originality/value This study provides a more comprehensive understanding of the role ethnic and cultural diversity has on millennial adult living preferences and its generational differences, which is not just “boomeranging” as identified by previous literature, contributing to the growing interest in the housing research on the effect of ethnic diversity and culture on millennials’ homeownership rates.