Content on Demand for Special Sections and Niche Publications
Weighed down by massive student debt and job struggles, the generation brutalized by the Great Recession has lacked both the money and the desire to buy homes. They've been a generation of renters.
But as millennials have entered their 30s, established themselves financially and started having families, they've gradually begun to show interest in homeownership, according to
To be sure, millennials still trail other generations in home buying by a long shot. But they are making gains as they age.
"They were hard hit by the economy, went back to college because they couldn't find jobs and got a later start," said Duncan. "They will start catching up."
The trend comes as a relief to real estate agents desperate to sell homes and economists worried that the economy would remain bogged down without enough first-time homebuyers. Typically, 20- and 30-somethings play an essential role in the economy and housing market. They become first-time homebuyers, filling their new homes with everything from appliances to yard equipment. Millennial home purchases also give older generations the chance to sell their own houses and move up.
Millennials are coming of age as homebuyers, though, just as housing prices are climbing and a lack of homes in some markets is causing bidding wars.
"Jessica was pretty upset," said Page. Still, he remains wary about overspending on anything he buys.
"I remember vividly the housing crash," he said. "I was in college, and I watched my parents take a huge loss on their home. It was surreal."
So despite his feeling of stability, with his job in sales and his fiancee's as a quality assurance supervisor, he wants to stay within a limited budget.
Surveys of millennials show his attitude is widely held. They are a practical generation that watched parents struggle to hold onto jobs and homes as unemployment soared to 10 percent and housing prices crashed 30 percent in the Great Recession.
But Duncan, who has been tracking today's millennials as they have been aging, is picking up on some solid trends in millennial home buying. He has seen distinct increases in buying as millennials have moved from their early 20s to late 20s and into their 30s. For example, as he followed a demographic group of people ages 28 to 29, he found that by the time the individuals were 30 to 31, they increased their home buying by 2.8 percent.
Millennials seem to be doing at a later age exactly what their parents' generation did when younger, Duncan said. Millennials as a generation have delayed marriage and have waited for several years for the job market and pay to improve. But as incomes rise and they marry and get ready for children, they are less interested in cramming into studio apartments in high-demand areas, and start searching for homes or condos they can afford to buy.
(EDITORS: BEGIN OPTIONAL TRIM)
"The trigger for 25- to 34-year-olds is getting married," said
"What spurred it for us was we had a baby on the way and we wanted to have a nursery," said
That stability, along with his wife's job in public relations, gave them the confidence to buy. They recently purchased a two-bedroom condo and hope to stay there at least for five more years.
(END OPTIONAL TRIM)
However, an increase in home prices is an issue for young adults because income growth still is very weak, said Duncan. Nationally, housing prices have been growing at four times the rate of incomes.
With the combination of rising prices and the impact of higher interest rates on mortgages, Duncan said the situation is "unsustainable" and will price first-time buyers out of the market.
Still, many millennials say they will not be pushed by concerns over rising prices to move faster than they should. Prior to the housing crash, which started slowly but took hold in 2008, people had been trying to rush ahead of fast-rising prices to buy while they thought they could. The overinflated market led to the crash.
Now many millennials have learned from the past and are determined to have their finances in solid condition before making a move.
"Have you seen the interest rates on student loans?" asked Leksi Culafic, a 27-year-old
"Owning a home is a goal," she said. She's using apps to explore the possibility of buying a home or two-flat, but her intention is to pay off her law school loans over the next 1 1/2 years before making a purchase.
(c)2017 Chicago Tribune
PHOTOS (for help with images, contact 312-222-4194):
You have 0 items in your Shopping Cart