Millennials on the Homeownership Path

To date, Millennials — those born from the early 1980s through the late ’90s — have largely lacked the financial clout to buy their own homes due to such factors as crushing student debt and the lingering effects of recession. However, several positive indicators are pointing to a reversal of this trend in the next several years. For one, the job market appears to be gaining steam. As of January, the Millennial unemployment rate has fallen to 9.3 percent. Furthermore, researchers at the University of Southern California Lusk Center for Real Estate say new household formation has returned to pre-recession levels. The Commerce Department put year-over-year growth in household formation at more than 1.6 million in last year’s October-through-December stretch. By contrast, the annual average was closer to 500,000 during the recession. Millennials also no longer have to save such large sums for a down payment. Fannie Mae and Freddie Mac have lowered that bar with new conforming loan programs requiring as little as 3 percent down. Finally, recent research shows that a sizable portion of young adults are at least thinking about homeownership. In a Bank of America/USA Today survey of Generation Y’ers released late last year, 32 percent said they were saving to buy a house. | Read More