Is the attitude toward homeownership really changing among young people? While millennials may not be jumping on board to buy a new home, it doesn’t necessarily mean that they don’t want to, but rather have other factors that stand in the way of homeownership. This recent NPR article by Yuki Noguchi, shares the varying reasons for millennials shift in home buying compared to baby boomers.
There’s a big debate in real estate over where home ownership rates are headed, and whether Millennials — people who came of age around 2000 — will get into the housing market the way generations before them did.
The percentage of people younger than age 35 who are homeowners went from 42 percent a decade ago to just a little more than a third now.
Lawrence Yun, chief economist for the National Association of Realtors, says young people are squeezed from both sides. Rents are increasing even faster than home prices.
And, he says, city politicians aren’t making it easy for developers to build condominiums that would be good starter homes.
“We are creating this divide because of the ongoing housing shortage,” Yun says.
There are other factors everyone agrees are making it harder for today’s younger home buyers. They’re delaying marriage, mortgages are harder to get, and people are staying in school longer, taking larger loans.
Which has the biggest effect, though? Is home ownership on a permanent decline because of high costs, changing demographics or new attitudes about home ownership?
“That’s the million-dollar question,” says Jonathan Spader, senior researcher at Harvard’s Joint Center for Housing.
He takes the view that ownership may stay the same, just delayed for the younger generation.
“We really haven’t seen a shift in interest in home ownership among younger households,” Spader says.
In surveys, a huge majority — 90 percent — of those younger than age 30 expect to eventually own, he says, but their earnings took a hit in the recession eight years ago and it’s taking them longer to save up a down payment.
[Read the full article here.]