Why Millennials Aren't Part of the Housing Recovery

Why Millennials Aren't Part of the Housing Recovery

The housing crisis is over—right? So it would appear, with home prices and sales steadily increasing this past year. And yet, one age group is not reaping the benefits ... millennials.

USA Today analyzed U.S. Census Bureau data revealing that the homeownership rate declined 7 percentage points for 25- to 34-year-olds from 2006 to 2011, falling from 46.7% to 39.7%. That's the largest decline in a homeownership rate among all age groups. In contrast, the homeownership rate for all ages fell a mere 2.7 percentage points to 64.6% during the same time period.


Get started with a free financial assessment.

Why such a drastic difference for these young adults? The impact of the recession goes beyond financial implications—there's a psychological aspect, as well. Budge Huskey, C.E.O. of residential brokerage Coldwell Banker, told USA Today that young adults have "seen other friends or acquaintances that may have even gone through a foreclosure." And that's scaring them away from the prospect of investing in a new home.

High unemployment, student loan debt, poor credit, low housing inventory and stricter qualifications for homeownership likely also contribute to the low confidence millennials currently feel toward buying a home.

To make matters worse, the desire among millennials to be homeowners hasn’t abated—only the opportunity. “What we haven’t seen is a fundamental shift in the long-term desire to become homeowners,” Chris Herbert, research director for the Joint Center for Housing Studies at Harvard University, told USA Today. “But we have seen both a declining ability, as well as the willingness to make that leap in the last few years.”

RELATED: Could Rising Mortgage Rates Hurt the Economy?


Financial planning made simple.

Get your free financial assessment.

Related Tags

Get the latest in your inbox.

Subscription failed!

You're Now Subscribed!