Millennials hampered in buying homes

08/22/2014

Millennials hampered in buying homes

WASHINGTON – Aug. 4, 2014 – The phrase "It's a new reality" has been used so much that it has lost meaning. But it's still true for younger buyers.

The generation born from the mid-1980s to the mid-2000s, also called Millennials or Generation Y, isn't buying homes like their predecessors because of debt to finance higher education for those with college degrees, and if they do graduate, they make less money.

Further, according to a report from CoreLogic, Millennials are putting off marriage longer than earlier generations. Because marriage is a big motivator in the decision to buy a home, the tilt increased even more for them to reach home-buying status.

According to CoreLogic:

  • The homeownership rate for 25- to 34-year-old Baby Boomers was 51.6 percent in 1980, but it dropped to 37.9 percent for the same age group in 2012.
  • Millennials, statistically, rank ahead of Boomers and Generation Xers when comparing relative household incomes of those in 2013 to those the same age in 1995 and the early 1980s. But that's true only with the college educated, who are also the ones with the big debt for education.
  • Millennials with just some college had incomes 6 percent lower in 2013 than Generation Xers in 1995 and 12 percent lower than Boomers in the early 80s.
  • Millennials with a high school diploma made, relatively, 12 percent less than Xers and 19 percent less than Boomers.
  • 36 percent of Millennials lived with their parents in 2012, the highest rate in at least 40 years.

The upshot, said CoreLogic, is that the economic statistics that define Millennials have also slowed the generation's household formation rate.

Copyright © 2014 The Sun News (Myrtle Beach, S.C.), Steve Jones. Distributed by MCT Information Services

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