Delayed Ownership and Wealth Disparities

Millennials aren’t purchasing homes on the same timelines as previous generations, and that has some economists worried. The homeownership rate for millennials was 37 percent in 2015, which is about eight percentage points lower than Generation X and baby boomers when they were at the same age between 25 to 34, according to a new report released by the Urban Institute.

Economists point to several factors for millennials’ delay into homeownership, including their delays to get married (being married increases probability of owning a home by 18 percentage points), rising student debt, delayed child bearing, and increasing rents that are making it more difficult to save for a down payment.

But the Urban Institute’s report notes that such delays into ownership are sparking concern. Less educated young adults are falling further behind in homeownership, the report notes. The gap in homeownership rates between the more educated versus the less educated population has grown significantly, increasing from 3.3 percent to 9.7 percent between 1990 and 2015. “Less educated millennials could be falling behind homeownership because of their unstable incomes and rising rents,” the report notes.

Source: “Millennial Homeownership,” Urban Institute (July 11, 2018)

High Rents, Low Rates = ‘Top Draws to Owning’

Sixty-two percent of potential home buyers say that now is a better time to purchase a home than it was a year ago, according to Chase’s new national survey, “Insights From the Mind of the Homebuyer.” The top reasons that are motivating more Americans to get off the fence are rising rental costs and historically low interest rates, the survey found.

Thirty-two percent of more than 1,000 consumers surveyed say they want to buy soon in order to take advantage of low rates. What’s more, 35 percent say that the 30-year fixed-rate mortgage rising above 4 percent would delay their decision to buy.

Twenty percent of consumers surveyed say that the rising cost of rent is making home ownership look like a better value and is the top reason why they want to buy. Also, 20 percent of those surveyed say that their desire to make an upgrade from their current home was their top motivation for buying.

Nearly 70 percent say they are worried they may have already missed the best time to buy because of rising home prices. Three out of four home buyers say they’re concerned their offer will be outbid by others, and three in five say they think they’ll need to buy a smaller home or consider other neighborhoods outside of their top choices because of rising prices, the survey finds.

Source: Chase

Suburbanites Are Happiest, Poll Finds

City centers and downtowns may be growing in demand among millennials and retiring baby boomers, but a new poll says residents are still happiest in the suburbs.

Americans who live in suburban areas are the most satisfied with the place they live, according to the Atlantic Media/Siemens State of City Poll. Eighty-four percent of suburbanites rated their community as “excellent” or “good” compared to 75 percent of urban dwellers and 78 percent of rural residents, according to the poll of more than 1,600 U.S. adults.

The survey revealed some racial, economic, and generational differences in community satisfaction. For example, in urban areas, whites were significantly more likely than minorities to say they were happy with their communities as places to live. Also, younger adults in general were less likely to rate their communities as “excellent” or “good” compared to their older counterparts. Older respondents tended to hold more favorable views of the place where they live.

Home ownership also appeared to be a major predictor for how satisfied residents were with their community. In urban areas, 44 percent of home owners rated their community as “excellent” compared to 22 percent of urban renters. Among non-urban home owners, 46 percent rated their community as “excellent” compared to 31 percent of non-urban renters, the poll found.

Source: “Overall, Americans in the Suburbs Are Still the Happiest,” The Atlantic CityLab (Aug. 25, 2014)