By Zhu Zhu

An improving job market and rising wages in 2016 had housing experts and economists predicting that millennials, those between the age of 20 and 36, would soon start doing what generations before them have done at their age: get married and buy a home.

But those key markers of adulthood, especially buying a home, are still at the bottom of the list for many millennials.

“Buying a new home is too expensive for me. My income can’t afford it right now. I may buy it in the future with my husband.” said Evelyn Sierra, 22, a barista in Chicago.

When they do settle down, Sierra said, it will be “anywhere outside the city” because homes in downtown Chicago are too expensive.

The median price for a single-family home in the Chicago metropolitan area rose 6 percent to $222,500 in 2016 from $210,000 in 2015, according to the Illinois Realtors. Mortgage rates continue to rise, with the average rate on a fixed 30-year mortgage at 4.19 percent in the most recent week, compared with 3.79 percent a year ago, according to Freddie Mac.

“The high mortgage rates add pressure on young homebuyers’ financing, and their wages are not supporting ownership,” said Bill Warlick, a senior analyst at Fitch Ratings, in an interview.

New home sales plummeted 10.4 percent in December to a seasonally adjusted annual rate of 536,000, the Commerce Department reported Friday. Analysts had forecast a 0.7 percent decline.

Sales of existing homes decreased 2.8 percent to a seasonally adjusted annual rate of 5.49 million in December the National Association of Realtors reported on Tuesday.

The homeownership rate for under 35-year-old’s dropped to 34 percent in 2016, from 41 percent in 2000, according to the United States Census Bureau, even as average hourly earnings rose at the strongest pace in more than seven years.

Many entry-level homebuyers have seen mortgage capacity eroded by tougher loan underwriting conditions, said Warlick. If they have lower income, are unemployed, or have too much debt, it’s hard for them to be approved for a loan, Warlick added.

Also, cash buyers are placing first-time buyers who require mortgage financing at a disadvantage, said Scott Siegel, director of real estate brokerage at Evanston based Jennings Realty Inc., in an interview.

“When comparing a financed offer with a cash offer, nine out of 10 sellers will take the cash offer with a quick closing and no contingencies,” Siegel said.

With relatively low income, it is hard for millennials to save for a down payment, especially in the big cities, said Frank Chen, a real estate investor in Massachusetts and New Hampshire.

For example, the cheapest studio in downtown Boston is about $350,000, Chen said. A typical 20 percent down payment would be $70,000 which is a large amount, he added.

Another reason that prevents millennials from buying homes is the burden of student loans. The median monthly payment for student loans is about $200 for millennials, Warlick said.

The total amount of student loans ended in Sept. 2016 is $1.4 trillion, according to the U.S. Federal Reserve.

Squeezed by student loan debt and unable to afford a home, millennials tend to put their extra money into retirement savings, more than their baby boomer parents did.

According to Young Invincible research, 40 percent of adults between the ages of 25 and 34 were saving for retirement in 2013, up from 16 percent for the same age group in 1989.

Saving earlier on retirement is a low-risk and more approachable investment for young adults, which may be the reason they do that rather than buying a home, said Warlick.

Another hindrance to home ownership is that millennials are tending to start families later.

“It is mainly due to a desire to get the career on track and retire some of their student debt before taking on the large financial burden of a home,” said Siegel.

In 2016, the median age for a first marriage for men was 30, and for women, 28, while the median age in 1990 for a man was 26 and for women, 24, according to the United States Census Bureau.

“Millennials who are starting families later in life don’t see a benefit to owning if they aren’t going to benefit from the schools, parks, and libraries nearby, which may benefit most for their children or future children”, said Kristie Edwards, a residential consultant and broker at Dream Town Realty in Evanston, in an interview.

Young adults are moving from job to job more frequently as well.

“Millennials’ don’t want to be tied down to one place. Their jobs are more on a contractual basis, so it makes better sense to rent instead of own,” Edwards added.

One Chicago woman said money is not an issue in her decision whether to buy a home.

“It depends on where I want to live,” said the woman, 24, who did not want her name used. “I’m living in a condo. I may buy a home in a few years in Michigan, living near my parents.”