Thanks to millennials, the future of real estate looks bright
|Quarter||U.S. Avg||Millennials* Under 35 years||Younger Gen X 35 to 44 years||Older Gen X 45 to 54 years||Baby Boomers 55 to 64 years||Silent Generation 65 years and over|
|Percent of Population (25+)||100%||20.3%||18.6%||18.6%||18.9%||23.4%|
As you gear up for a productive spring, it's also helpful to look to your prospects over the next three to five or even 10 years. With the better educated millennial generation — defined here as a diverse population of more than 45 million Americans,Footnote1 ages 25 to 34 — poised to enter their prime home buying years, one can reasonably expect to be plenty busy over the next decade.
By late 2019, looking at the millennial segment in the bar graph above, around 37% owned a home. That's more than 17 million mostly first-time homeowners and includes a 1.5% increase since 2014.Footnote2 It's important to remember that in the aftermath of the Great Recession, home buying was markedly delayed. But with incomes increasing every year since 2013, the buying spree has already begun.
By 2029, if they follow the same growth trend of the generation before them, around 60% of millennials are expected to own homes, the equivalent of 10 million more homes purchased.Footnote2 What's more, by the same logic, the Younger Gen Xers (35 to 44 years old) are projected to increase their home purchases over the same period by 4 million.Footnote2
Home buying rates are influenced by many factors, like education and income. A 2017 MarketWatch report of all adults documents that less than 40% of those without a high school diploma owned their own home. In contrast, 56% of high school graduates, 67% of college graduates and 76% of professionals owned a home.Footnote3
Despite some perceptions to the contrary, this optimistic outlook is confirmed by millennials themselves. Numerous surveys indicate that as many as 80% of millennials express a desire to own their own home.Footnote4 A fruitful spring could be the beginning of a profitable decade.
1 Population Data Source: U.S. Census Bureau, 2018 American Community Survey 1-Year Estimates
2 Homeownership Rate Data Source: U.S. Census Bureau, Current Population Survey/Housing Vacancy Survey, October 29, 2019
3 "The higher your degree, the more likely you are to buy a house," Copyright 2019 MarketWatch, Inc., Alessandra Malito, Aug 14, 2017
4 "FADING PROMISE: Millennial Prospects in the Golden State," Center for Demographics & Policy, Chapman University, Joel Kotkin and Wendell Cox