The millennial generation is inching their way into home ownership. Millennials, born from the early 1980s through the late 1990s, have largely delayed their entrance into home ownership, saddled by debt and high unemployment in the recession aftermath.
But economists are getting optimistic that the millennials are emerging into home ownership. Jonathan Smoke, realtor.com®’s chief economist, said earlier this year that 2015 will mark an opportunity for younger buyers to enter the housing market, which will fuel a stronger housing recovery.
Here are some indicators that are making economists the most optimistic:
- Rising employment: The improvement in employment for this generation will bring rising incomes that may push more toward home ownership.
- Moving out: More millennials are moving out of their parents’ homes. New household formation is back up to pre-recession levels.
- Low mortgage rates, greater credit availability: Millennials have said that one of the biggest challenges to home ownership is saving for a down payment. Mortgage rates are still near historical lows, which is opening the doors for some. Also, several government programs are helping to increase mortgage availability for first-time home buyers.
- They desire to be home owners: Young adults say they want to buy. Thirty-two percent of millennials recently surveyed said they were saving for a house, according to a Bank of America/USA Today survey. A new Goldman Sachs’ infographic shows that 93 percent of millennials say they want to own a home.
Source: “Millennials on the Home Ownership Path,” The New York Times (March 6, 2015)