Got that from here, which also has this chart:
If you take those two charts together, here’s what you get:
- The U.S. is at its lowest rate of homeownership since about 1993.
- Every age group is dropping in terms of homeownership across the last decade or so.
There’s a bunch of different socioeconomic narratives going on here at once, so let’s parse them out if we can:
- Millennials seem to want to live in cities.
- They’re all about walkability, insofar as you can generalize about generations.
- Their fascination with cities and walking is going to completely change the real estate industry.
- We’ve been predicting the death of the suburbs for years now.
So stop and consider where we’re at: younger generations want to live in cities, the suburbs are dying, etc. That would help explain these two charts above. But those are all social components. Here’s the economic side of it:
- Earnings are stagnant.
- You should probably make about $30,000 more than you do.
- The rich are getting richer.
- We’re automating more jobs.
- We’ve probably got a workforce crisis coming.
- Leaving that in the hands of “hiring managers” and breathlessly discussing “headcount” is a bad idea.
So now there’s a two-fold issue here, right? It comes down to:
- Millennials don’t necessarily even want houses.
- If they did for the ol’ “more space, got kids!” reasoning, they might not have enough money to actually buy them.
Then there’s this, from CityLab:
The Joint Center for Housing Studies cites an Urban Institute estimate that indicates a stunning 37 percent drop in home-purchase loans for borrowers with credit scores in the 660–720 range from 2001 to 2013—and a 9 percent drop among borrowers with even better credit.
It’s kind of a dark overall picture in terms of home ownership, honestly. I’m thinking about getting into that game next summer or maybe winter 2017. But I look at it in terms of my closest friends, right? Four — just four — of about 17 people I’m thinking of owns a house. That’s what, less than 20 percent? (EDIT: 23 percent.) I have a friend who just bought a house about a week ago. I have another who was in on a house, but the mold issues and an AirBNB lease agreement concern stopped it. So maybe it could have been 6/17 by this fall? That’s still not very high. And PS: some of these people (the 17) have kids, and some have multiple kids, etc. They still don’t own houses, per se.
Interesting generational shift, no? This’ll blow your mind: the twin engines of American economic growth post-WW2 (houses and cars) are both seemingly things that the new generation isn’t interested in. Of course these are all generalizations, and generalizations do fail, but look at what’s happening to business as a result.