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Homeownership Rate Rose for Young Adults

A recent report from the National Association of Homebuilders (NAHB) Discusses Economics and Housing Policy (NAHB) highlights 2018 headship trends and found that for the first time in decades, young adults whose ages fall between 25-34 is a demographic that saw quite a spike in headship rates. 

For a generation previously having spent the last few decades in a state of continuous decline, the US headship rates of young adultsof which the majority seemed to be trending toward living back at home with parents, relatives, or living up with roommates due to financial debts and suchshowed a positive shift toward homeownership that appears as a hopeful omen that the tides may finally be turning. 

However, many experts wonder if these positive and hopeful shifts can be sustained through the tidal wave that has been the coronavirus outbreak. Much of whether or not this shift can be maintained by young adults will depend upon the collateral damage from the coronavirus, specifically the intensity and duration of job loss, unemployment, and wage disappearance. 

Although the surge in 2018 headship rates among young adults was largely contributed to less of these individuals returning home to live with relatives or opt for co-sharing households with roommates and other communal living situations, data still shows that there remains a large representation of young adults that are still enjoying the fruits of dwelling back at home with relatives in order to save on rent and get out of financial holes. 

A report by Ellie Mae, though, found the refinance share for all loans closed to millennial homeowners in February was 34%, which is tied for the highest share since Ellie Mae began tracking this data in 2016. 

Conventional loans represented 75% of all loans closed by this group for the month. The refinance share rose to 41% as average rates for this loan type fell to 3.86% from 3.98%. 

The Ellie Mae Millennial Tracker now divides millennials into two groups—older millennials (between 30 and 40-years-old) and younger millennials (between 21 and 29-years-old). Older millennials accounted for 41% of all loans closed for millennials, compared to just 18% for younger millennials. 

Younger millennials saw their average interest rate on all loans fall to 3.83% from 3.9% month-over-month. The average rates for older millennials fell monthly to 3.85% from 3.95%. 

About Author: Andy Beth Miller

Andy Beth Miller is a well-established freelance editor and writer with almost 20 years’ experience working within the media industry, contributing to various publications such as Lonely Planet, Zicasso, Honolulu Star-Advertiser, Midweek Magazine, Kauai Traveler Magazine, HILuxury, and many more. She also currently serves as the Editor-in-Chief of ProcuRising Magazine, which enables procurement professionals to increase their knowledge base within a creative and collaborative community.
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