Homeownership Rate for People in Their 20s and 30s Falls to Record Low of 27.7%, Widening Wealth Gaps Across Generations and Social Classes

[Financial News] For young people, buying a home is becoming an increasingly difficult goal. Last year, the homeownership rate for people aged 39 and under fell below 30% for the first time since the statistics began, and the wealth gap with middle-aged and older groups widened to the largest level on record.
According to the Korean Statistical Information Service (KOSIS) on the 26th, the homeownership rate for people aged 39 and under stood at 27.7% last year. That was down 2.4 percentage points from a year earlier and marked the lowest level since the related statistics were revised in 2017. Compared with 40.7% in both 2018 and 2019, the figure has fallen by nearly 13 percentage points in five years.
By contrast, homeownership among middle-aged and older groups changed little. Last year, the rate was 63.5% for people in their 50s and 68.5% for those 60 and older, slipping only slightly from the previous year. As a result, the gap with people aged 39 and under reached record highs of 35.8 percentage points and 40.8 percentage points, respectively.
Homeownership also translated into a wider wealth gap. The average net worth of households headed by people aged 39 and under was 219.5 million won last year, down 0.9% from a year earlier. In contrast, net worth rose 7.9% for people in their 50s to 551.61 million won, and 3.2% for those 60 and older to 535.91 million won. While young households saw their net worth decline, assets among middle-aged and older groups kept rising, widening the net worth gap between people in their 50s and younger households to 2.5 times.
Polarization in homeownership by asset level also intensified. The homeownership rate for the bottom 20% by net worth fell to a record low of 6.8% last year, while the top 20% held steady at 84.2%. The gap between the top and bottom groups reached 77.4 percentage points.
The difference in home values was even larger. The average price of homes owned by the top 20% by net worth was 686.77 million won, more than 117 times higher than the 5.85 million won average for the bottom 20%. The analysis suggests that the more likely a group is to own a home, the faster its assets grow, while those without homes face increasingly limited opportunities to build wealth.
Against this backdrop, calls are growing for policies that help actual homebuyers enter the market. At a recent real estate policy public forum, newlyweds and others called for eased mortgage lending rules, while some argued that higher taxes on ultra-expensive homes and multi-home owners should be introduced at the same time.
Still, some say taxes alone cannot solve asset inequality. Jeong Jun-ho, a professor at Kangwon National University (KNU), said, "The core of wealth inequality in Korea is whether people can enter the housing market." He added, "Ultimately, the fundamental solution is to build an economic structure in which labor income grows faster than asset income."
[email protected] Jeong Sang-hee Reporter