The millennial generation isn’t adding much volume to the current housing market, according to a survey released today in the March 2015 Mortgage Industry Outlook Report [1] by The Collingwood Group [2] and The Five Star Institute [3]. Approximately 61 percent of respondents said they see no evidence of the new volume coming from the millennial generation.
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Student loan debt, a slow lag in finding employment, and wage stagnation were cited as some of the reasons why millennials have yet to enter the housing market in record numbers. About 70 percent of students walked away with loan debt in 2013 and the average student racks up almost $30,000 in debt by graduation, according to an annual report on loan debt released by the Institute for College Access and Success. [5]
The millennial population is also starting households and getting married much later than previous generations, which delays their need to buy. However, unemployment rates among millennials may be the biggest reason why this generation is slow to enter the housing market. Unemployment rates are still low for recent college graduates, hovering around 11 percent for 20- to 24-year-olds as of November. Older millennials are seeing a healthier job market and only about 5.9 percent of those ages 24 to 35 remain unemployed.
However, the many respondents believe millennials will enter the market in the near future and research shows millenials are still interested in becoming homeowners one day. According to a Zillow [6] survey, respondents ages 18 to 34 believe more strongly that owning a home is necessary to being a respected member of society, living a good life, and obtaining the American dream than previous generations.
“It is a matter of time (perhaps 10 years) before the millennials become homeowners,” one participant in the Mortgage Industry Outlook Report said. “To a certain extent, the industry should just be patient.”
The Collingwood Group conducted the survey in partnership with The Five Star Institute. A diverse group of mortgage industry leaders was polled, with the largest percentage of those surveyed coming from lending or originating (37 percent), followed by service providers and industry vendors (19 percent) and consultants/advisors/attorneys (16 percent).