The housing market has made some strides since 2013, but household growth has yet to fully recover from the effects of the recession, according to a new housing report released Thursday by Harvard University’s Joint Center for Housing Studies.
“Young Americans, saddled with higher-than-ever student-loan debt and falling incomes, continue to live with their parents,” the report notes.
Still, researchers are hopeful for a turnaround as the Millennial generation breaks out on their own. The number of households in their 30s is expected to increase by 2.7 million over the coming decade, which should boost demand for new housing, the report predicts.
“Ultimately, the large Millennial generation will make their presence felt in the owner-occupied market, just as they already have in the rental market, where demand is strong, rents are rising, construction is robust, and property values increased by double digits for the fourth consecutive year in 2013,” says Daniel McCue, research manager at the Joint Center.
But Millennials likely will not be able to increase their presence in the housing market until incomes grow. Also, the report notes that another important aspect is how potential GSE reform will affect the cost and availability of mortgage credit for the next generation of home buyers.