US millennials buying homes later

Originally published July 16, 2014 at 6:41 AM | Page modified July 16, 2014 at 11:43 AM

 

By JOSH BOAK

AP Economics Writer

 

Don't blame the millennial generation for lackluster home sales.

They are increasingly ethnically diverse, more educated and less likely to be married -- all factors that make them less likely to own a home, said a new report released Wednesday by Trulia, the online real estate firm. After adjusting for these population changes, younger Americans are actually buying homes at the same rate as they did during the late-1990s.

"For at least the past 20 years, there have been significant demographic headwinds for homeownership for young people," said Jed Kolko, chief economist at Trulia.

The analysis suggests that the recession -- for all its damage to the economy -- did little to turn off millennials from the idea of owning a home compared to previous generations. In fact, the report shows that the major group whose ownership rates suffered because of the downturn is middle-aged Americans.

The easy credit offered during the housing bubble caused more young people to buy than they otherwise would and masked the impact of the demographic changes, according to Trulia. The bursting of that bubble and the resulting recession that began in 2007 then caused ownership to fall where it should be given the demographic shifts. Because a greater percentage of younger Americans are attending college and graduate school, they are settling down a few years later -- which causes them to delay buying a home.

Census figures show that the share of 18-34 year-olds who are married is 30 percent, down from 47 percent in 1983. Just 29 percent of them live with children, compared to 39 percent three decades ago. Since more people in the age range are single and childless, Trulia looked at the number of homeowners who are also identified as the head of their households. After adjusting for these population shifts, the share of people under 35-years old who own homes is the same as it was for 1997.

Standard Census data, which aren't adjusted for these factors, show that the ownership rate among those younger than 35 has declined to 36.2 percent from 38.6 percent in 1997. Slightly less than 65 percent of the country owns a home, down from a peak of 69 percent in the middle of 2006

 

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