By Yimian Wu
Despite the falling U.S homeownership rate and the rise of the sharing economy, owning a home is still part of the American dream for most Millennails, the 20- and 30- somethings.
A random sampling of college students in downtown Chicago shows a majority plan to purchase a home in the future. The primary reasons are family formation and “a place to call mine”.
The U.S. seasonally adjusted homeownership rate dropped to 63.8 percent in the first quarter, the lowest since 1989, according to the housing vacancies and homeownership report released by the Census Bureau last week.
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The report also showed that homeownership by people under 35 fell to 34.6 percent from 35.3 percent last year, the sharpest yearly decrease among all age groups.
“Many Millennials (those 35 and under) graduated college and entered the workforce during the worst of the recession,” said Adam DeSanctis, economic issues media manager at the National Association of Realtors, in an email. “As a result, underemployment, stagnant wages and repaying student loan debt in the past few years have delayed their path to homeownership,”
Many Millennials said they prefer owning a house when they have their own family, therefore the age of family formation also will affect the homeownership rate. “The youngest generation is delaying trigger events for home buying such as marriage and having children,” said Lindsey Piegza, chief economist at Sterne Agee.
According to a White House report on Millennials, only 30 percent of 20- to 34-year-olds were married in 2013, compared to 77 percent in 1960. Also, the median marriage age was 29 and 26.6, respectively, for men and women in 2013.
Therefore, delayed home purchasing does not mean unwillingness to buy a home. As the economy improves, more Millennials plan to buy houses in the future. A study by BMO Harris Bank showed that 74 percent of 18- to 34-year-olds plan to buy a home in the next five years, with 32 percent saying they will buy in the next 12 months.
