Millennial Homebuyers Delayed, Not Denied
Millennial homebuyers, despite reports to the contrary, are just as interested in purchasing a home of their own as their Baby Boomer parents. As the housing market continues to emerge from the recession and employment stabilizes, more of this younger generation will be looking to the suburbs to start new families.
Although recent housing trends seem to indicate that the Millennial Generation (born 1982-2003) prefers paying rent to paying down a mortgage, research suggests that the desire to own a home remains at the heart of the post-Boomer generation’s version of the American Dream.
Forty-three percent of Millennials describe the suburbs as the ''ideal place to live,'' compared to just 31 percent of older generations, according to a study by Frank N. Magid Associates. Only 17 percent of Millennials want to settle in big cities, and the same percentage stated a preference for living in either rural or small town America. A full 64 percent of Millennials surveyed said it was ''very important'' to have an opportunity to own their own home, and 84 percent of 18-34 year olds currently renting intend to buy a home even if they can’t currently afford to do so.
Census data from the American Community Survey also puts current Millennial homeownership higher than the Baby Boomer generation at the same stage. ''While 900,000 households in the Millennial Generation [now] own their own home, only 500,000 Baby Boomer households owned their own homes at the same point in their lives,'' said Glenn Crenlin, spokesman for the Runstad Center for Real Estate Studies at the University of Washington. Crenlin told NewGeography.com that ''the Millennial Generation is likely only delay[ing] homeownership by three to five years, [which is] not a long-term trend away from homeownership itself.''
The recent consensus surrounding the generational preference of renting over home ownership can be traced to faulty trend analysis, beginning with the use of the late-1990s housing boom as a baseline. For example, recent Census Bureau data places the home ownership rate in the first quarter of 2012 at 65.4 percent, the lowest rate since 1997 and a cause for much hand-wringing by industry experts. Before the bubble, however, homeownership generally remained at 65 percent or below, increasing strongly from 44 percent in 1940 to 61 percent in 1960.
The biannual ''American Dream'' survey by real estate website Trulia.com also points to an embrace of homeownership over the long term. Twenty-six percent of 18 to 34-year-olds surveyed held very positive views toward owning a home, the highest concentration of any age group. If the trends of rising rental costs and struggling home prices continue, it’s a sure bet that many of these Millennials will be signing on the dotted line sooner than the ''experts'' might think.