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Millennials Desire Homeownership, But …

For Rent Three BHThe latest data from Zillow displays disparities among various socio-economical demographics and analyzes its effects for these groups.

The millennial generation has a strong desire for homeownership, but due to affordability and other factors, Zillow data shows that young adults are renting for longer periods of time before buying their first home.

In recent years, more millennials are finding themselves forgoing their dream and moving in with their parents in an effort to save money. The amount of younger millennials ages 18-25 living at home has decreased from 55.5 percent to 54.2 percent since 2012. However, the number of older millennials ages 26-34 who are living at their parents’ home has increased from 12.9 percent to 14.5 percent.

The increase in home values have deterred aspiring homebuyers from purchasing a home due to stagnant socio-economic growth. Over the last 20 years, home values in the metro areas with the most social mobility have soared, which makes it difficult for low-income people to afford living in the very places where they could most easily achieve socio-economic growth.

The affordability issue in housing has affected millions of potential homeowners, many of which cite is one of the reasons why they cannot purchase a home. Affordability is even worse for those with low incomes, even if they are living in the cheapest homes available in their market. Nationally, the bottom third income earners spend twice as much of their income on mortgage payments than the top third.

Homeowners making incomes in the bottom third would need to spend more than half of that income in the more expensive markets to afford the monthly payment on the cheapest homes. Homes most likely to face foreclosure during the housing crisis were normally the cheapest homes on the market, forcing families into rental properties while rebuilding their finances during a period that experienced the highest rent appreciation on record.

Dr. Svenja Gudell, Chief Economist for Zillow, and other experts plan  to delve into the various demographical factors that determine the fate of potential homebuyers at the 2017 Zillow Economic Forum on January 11 in Washington, D.C. “Our research on housing has unlocked issues that are closely linked to broader social and economic problems in the U.S.—such as poor access to credit, weak income growth, and social mobility,” she said. “This forum brings together some of the greatest minds in economic policy and research to explore the troubling disparities in economic opportunity. We will focus on how different generational, racial, and socio-economic groups are affected, specifically in their access to housing and homeownership. I look forward to a discussion that gets to the heart of the issues that we at Zillow spend so much time thinking about.”

About Author: Mirasha Brown

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Mirasha Brown is a graduate of Florida A&M University and is pursuing a masters degree at Syracuse University. Born and raised in Florida, she has contributed to public relations and marketing campaigns for Rent The Runway and Billboard. She is a communications specialist with The Five Star and a contributing writer to DS News and The MReport.
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