Millennials are buying fewer houses than their Baby-Boomer counterparts – that is inarguable by the data. Across age groups, the U.S. homeownership rate has fallen to a 50 year low – 62.9 percent – and that dip is mostly powered by millennial homebuyers who aren’t buying. Among those under the age of 35, home ownership rates are just over 1/3 – and about half the national figures.
In fact, young people aren’t just not buying – in many cases, they aren’t even renting. About a third of 18-34 year olds live with mom and dad.
The data indicates that this is not the long term plan – despite the fact that 18-35 year-olds have surpassed the elderly as the generation most likely to live in multi-generational living arrangements, the data from Fannie Mae indicates that most millennials intend to purchase a home in the future. Among people ages 25 to 34 who rent, 93 percent intend to buy a home someday. The Demand Institute has found similar results.
That compares with just 81 percent of renters overall, so it might seem that millennials are 12 percent more interested in buying houses than the general population – though remember that is a bit misleading, since only about 1/3 of millennials rent (the first third own their own homes already, according to national figures, and the second third live with mom and dad) – meaning that by these numbers about 29 percent of millennials as a whole plan to buy, and about 63 percent of that total either own already or plan to some day.
So if so many renting want to buy – and we can assume some of those living with mom and dad would also like to purchase a home of their own someday – why aren’t they? For the same reasons they aren’t using credit cards – they can’t. Too much student loan debt combined with an economy that went into the deep freeze as they were entering the workforce means that the up-and-coming generation isn’t ready to buy a house yet – in much the same way the data indicates they aren’t ready to get married or have children, life milestones are getting deferred as millenials are trying to catch up to where their parents or older siblings were at the same age.
Which, notes The Washington Post, may actually be the upside to the fact that millennial are holding off on housing purchases – it is giving the generation maximum flexibility to tailor their lives to their career choices by not rooting to one spot early on.
“Millennials’ relative rootlessness, even if involuntary, may [make] it easier for young workers to seize better job opportunities if and when they finally do arise.”
Or maybe not.
Time will tell.