Photo (cc) by Kendyl Young
Members of the millennial generation have been criticized for poor spending and saving habits in the face of large student debt burdens. Others have chided them for relying on the “Bank of Mom and Dad.”
But a new report from Fannie Mae suggests that more millennials are becoming homeowners.
Fannie Mae — a government-sponsored company that purchases and guarantees mortgages — says in the report that the number of young homeowners has been decreasing for decades, except during the housing boom from 2000 to 2005.
The Great Recession and its aftermath accelerated the decline in homeownership among younger people.
Data from the U.S. Census Bureau’s American Community Survey show that the number of owner-occupants between the ages of 25 and 34 plummeted by an average of 300,000 annually between 2007 and 2012 despite the young adult population growing during that time period.
The decrease in the number of young homeowners started to slow in 2013, when it fell by fewer than 100,000. Last year’s figure was “essentially flat,” according to Fannie Mae’s report.
So what’s next? According to the report:
Given that the young-adult population is expected to continue expanding rapidly during the second half of the decade, it would take only modest further improvements in homeownership rate trends for the number of young homeowners to return to growth.
If such a return to modest growth among young homeowners occurs, it could have several implications for the housing industry, the Fannie Mae report notes, including:
- Creating the need to adjust the size, type and geographic location of new housing construction.
- Expanding education and counseling efforts targeted at inexperienced homeowners.
- Stepping up efforts to provide services and technologies suitable for young homebuyers.
Have you noticed any changes in homeownership patterns in your area in recent years? Share your thoughts below or on Facebook.