Millennials, Millennials, Wherefore art thou Millennials?

5-key-questions-for-Millennials-homebuying1Watchers of the real estate economy have voiced concern measuring somewhere between significant and grave about the absence of Millennial Buyers in the recovering housing market. The Millennial generation is considered to be comprised of individuals between the ages of approximately 15 and 35. If you’re over 35, remember where you were back in your third decade on the planet – probably well on your way to, or firmly ensconced in job stability and homeownership. If you’re under the age of 35, try to remember where you thought you’d be by now – probably well on your way to, or firmly ensconced in career stability and home ownership.

US News and World Report magazine reports that in the first quarter of 2014 homeownership for Americans 35 and under declined to 36.2 percent,  the lowest on record since the census’s Housing Vacancy Survey began tabulating homeownership by age in 1982. So what gives with our twenty and thirty somethings?

A number of reasons are given by theorists about the millennials reticence to purchase a home. The most quoted factors point to high student loan debt making home mortgages difficult to get and pay; A tougher job market resulting in declining employment rates and lower starting salaries for entry level positions; delayed marriage and household formation; and tight credit requirements. I think that in addition to analyzing current factors contributing to a historic decline in home ownership among 20 and 30 year olds, we also must consider their pasts.

Millennials grew up during a time filled with instability in the world, their country and their neighborhoods. September 11, 2001 shook the basic sense of invulnerability that many of their parents had. The wars that followed and the greatest economic crisis since the depression had to have impacted that generation of children and young adults and their perceptions of the world. Seeing neighbors, friends, and even their own families in many cases, lose their homes during the housing market crash reshaped the idea of homeownership from the “best investment you’ll ever make” to something of a gamble in the eyes of many young adults. Sure, it can be suggested that there have been worse times in this country, and that homeownership actually increased exponentially after World War II. Millennials however, have had the luxury of access and exposure to every aspect, detail and prognostication about the state of the economy and the world via the internet, cable news and social media.

There is a turnaround coming! Millennials will not be permanent apartment dwellers and they will not take up indefinite residence in their parents homes! Assuming that the theorists are correct, there is much to be hopeful about. First, congress is looking at several options for restructuring student loan debt that will allow for increased opportunities to purchase a home. The unemployment rate has been reported to be below 6% consistently for the past 4 months. Credit and lending requirements are loosening and are expected to continue to ease through 2015. And there are some lending guidelines being put in place that may have an effect of easing the acceleration of home prices and preventing affordability from becoming an issue.

But what about the Millennial experience of a world gone wild? I believe it’s up to us as parents, grandparents Realtors, lenders, and others to educate the next generation of homeowners. Despite the recent housing crisis, owning a home continues to be one of the best investments a person can make, particularly as rents rise to levels equating to a typical mortgage. Owning a home can actually engender stability for couples and families. Communities grow stronger as renters are replaced by owners. I’m doing my part. Beginning this year, I’ll be collaborating with a lender, a title representative, and an insurance agent to help millennials learn more about preparing to own a home. If you or someone you know is interested in participating, please let me know asap.

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