July 25, 2018

Why Millennials aren't buying homes

City Lab - In 2015, about 37 percent of Millennials owned a house—that’s about eight percentage points lower than Gen X-ers and Baby Boomers when they were the same age. While there’s no shortage of theories about why this is happening, it’s more difficult to quantify potential causes. But a new report by the Urban Institute actually puts some numbers behind the factors that make homeownership less likely for this generation.

People born between 1981 and 1997 are notably putting off some big life moves that affect when they buy a home. For example, if marriage rates were the same as in 1990, homeownership would be 5 percentage points higher, the study suggests. Student debt weighs heavily, too, with highly educated Millennials falling 5 points lower than the two previous generations on homeownership. Combine that with higher rents and lingering racial disparities and you get a fuller picture of what’s going on.

But it says just as much about the economy as it does the age cohort, because location plays a root cause. The study shows that as high-skilled jobs have drawn people to high-cost cities like New York, San Francisco, and Washington, D.C., homeownership has grown further out of reach, making it more difficult to build wealth and reduce inequality in the future. And moving to cheaper cities doesn't have the bang for its buck that it once did.

1 comment:

Anonymous said...

I can't think of a case where pathological greed and overpopulation aren't the key factors.