As the economy continues to recover, the millennial generation is still feeling the longer-term effects of the recession due to underemployment and low salaries combined with high student debt and uncertainty about the future. These factors have affected the housing market, and the renter status of this generation was examined in a new survey by LendingTree. Source: CBS Money Watch
Making sense of the story
- Only 43.4 percent of college-educated millennials ages 24 to 35 own a home. When asked “What would allow you to consider purchasing your first home?” 67.4 percent said they’d need more income.
- Roughly a third want to move somewhere they like better before buying, 28.7 percent want to pay off student loans before becoming homeowners, and 25.7 percent want to put off owning a home until they’ve traveled or invested.
- However, only 4.4 percent of non-homeowner millennials have no interest in ever owning a home, thereby showing that homeownership remains an aspiration.
- Many millennials are ignoring financial issues. For example, 21.2 percent of millennials said they do not know their current credit score, and another 11 percent said they have never even checked it.
- The survey found that 4.8 percent of millennials have less than $5,000 in savings, short of the three to six months of living expenses that financial institutions advise.
- Roughly 9.5 percent of millennials cited said they do not have or maintain a savings account, which perhaps reflects their distrust of banks following the recession.
- Median household income in the U.S. hit roughly $52,000 last year, according to the Census Bureau, which is well below the $56,400 those households were making in pre-recession 2007 and similarly distant from the all-time high of $57,000 last seen in 1997.
Talking Points …
- The real estate equity position of U.S. households (the difference between assets and liabilities) increased nearly 1.6 percent for the third quarter, according to tabulations from the National Association of Home Builders.
- The market value of real estate held by U.S. households increased $180 billion dollars during the quarter, while liabilities (home mortgages) remained virtually unchanged. The value household-owned real estate, including owner-occupied and second homes, totaled $20.4 trillion for the quarter.
- Total home mortgage debt outstanding stands at $9.4 trillion. Recent developments in terms of housing values and mortgage debt outstanding have been largely driven by tight lending conditions and steadily increasing home prices.
From C.A.R. ~ C.A.R. Market Matters is published by the CALIFORNIA ASSOCIATION OF REALTORS®, a trade association representing more than 175,000 REALTORS® statewide.
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