The Plight Of Generation X: Gen Xers Felt The Full Wrath Of The Housing Bust

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Victims of circumstance, many Gen Xers still have the housing bust fresh in their minds

April 12, 2016

After being burned by the housing bust, Gen Xers are increasingly more likely to rent than buy, as the amount of renters in their 30s and 40s has risen by three million as compared to 10 years ago. Photo Credit: Eaaumi, Wikimedia Commons

When the housing bust happened, Generation X was, for the most part, a bunch of bright-eyed, optimistic first-time homeowners. For the younger half of the generation, Mom and Dad’s house was firmly located in the rear view mirror and the future an open road. The older half of the generation had grown comfortable in their homes or maybe had just bought a new house to accommodate their growing family.

Whatever the case, in 2004, a lot of Generation Xers owned homes. In fact, they were the most successful generation in terms of home ownership. A decade later, in 2015, they became the least successful generation in terms of home ownership. Generation Xers were victims of circumstance; they were the wrong age at the wrong time and in the wrong place. According to a Wall Street Journal article posted to realtor.com, the historic bull market for housing combined with easy-to-get mortgages encouraged record levels of home buying right up until the housing market collapsed.

In 2005, generation X had homeownership rates almost four full percentage points above the historic rates for their age group, far and away the highest for any generation. In 2015, Generation X had homeownership rates over 7 percentage points below the historical average for their age group. Once again, this was far and away the lowest for any generation.

As more and more Gen Xers venture into the territory of ‘middle age,’ numbers are showing a smaller increase in homeownership rates than previous generations. While much of the housing market talk is centered on millennials, Gen Xers still have an important role to play that relates directly to the generation that follows them. The core group of Generation X is currently at an age where they would be trading up for bigger houses, thus putting their starter-homes back on the market. But because of the housing crash and how affected they were by it, this trend has been broken. Meaning there are fewer Gen Xers trading up and putting their homes on the market, leading to an overall housing market with fewer homes for millennials to buy. It’s a vicious circle to be trapped in.

Not helping matters any is that millennials are already a larger group than Generation X, 87 million to 83 million, and are expected to grow to 93 million thanks to immigration. Meanwhile, Generation X is expected to hold steady.

Additionally, many Gen Xers have decided to rent as opposed to buy again. The amount of renters in their 30s and 40s has risen by three million compared to ten years ago. Many of them are no longer comfortable purchasing a house, regardless of the benefits of home owning.

Generation X, a group that felt the full brunt of the housing crash, seems to be looking at the housing market with extreme caution.

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