New home construction and real estate industry watchers have been talking for a while about how Millennials are going to reinvigorate the housing market. So far they haven’t.
Realtor.com points to several factors, explaining why the homeownership rate among the 67.7 million people born between 1981 and 1995 was 35.4% during the first quarter compared with 40% in 1999. High unemployment during the recession, delayed entry into the workforce, and high student debt compared with previous generations are the usual culprits mentioned. Usually such discussion included the expectation that Millennials financial wherewithal will improve with time as they earn more money and form households.
But the scars from the Great Recession may have busted the notion for this group that owning a house is a great investment. Couple their reduced willingness to take on financial risk with a preference for urban living, reduced tax incentives for home ownership, and tight credit availability from risk-averse banks and the expected Millennial buying wave could be just a ripple.