In the second quarter of this year, home ownership rates in the United States fell to their lowest level in more than 50 years. Around 63 percent of U.S. homes are owned.
Nearly 40 countries on three continents – including China, Singapore, Mexico and Brazil – have higher home ownership rates. What’s to blame for the drop in the U.S. Millennials.
CCTV America’s Karina Huber gave us this report.
US home ownership dips to 50-year lowHome ownership rates in the United States fell to their lowest level in more than 50 years. The biggest contributor to this dip are Millennials. CCTV America's Karina Huber gave us this report.
Owning a home has long been one of the most reliable ways to build wealth for the middle class in any country, but it’s increasingly out of reach for a generation of young Americans.
Millennials – a market demographic comprised of people in their 20s and early 30s – now have the lowest home ownership rate in the U.S. ever recorded for their age group.
It’s in part because Millennials often graduate from university with significant student debt. So they delay marriage and having children – two rites of passage into adulthood that induce people to buy a home.
As a result the rental market is red hot. Average rents increased 4.6 percent in 2015 -the fastest pace since 2007. Higher rents are also making it harder to save for a down payment on a home.
For those interested in buying, they’re facing tighter lending standards making it tougher to secure a loan. There is also a shortage of entry-level homes, particularly in urban areas.
The home ownership drop doesn’t bode well for the U.S. economy. The National Association of Realtors estimates that for every two homes sold, one job is created.
Lawrence Yun, Chief Economist, National Association of Realtors believes related industries – whether it is garden equipment suppliers, lawn care or even moving truck service companies – are also being held back.
While younger people are being held back from homeownership for a variety of reasons, Yun says more than 80 percent of Millennials believe home ownership is something worth striving for – just not right now.