Posted On March 8, 2012
Millennials are starting to feel like the dream of home ownership is just that – a dream. As the leading edge of the generation moves into its 30s, many of them are still finding the goal of owning a home elusive. According to the Federal Reserve, only 9% of 29-34 year olds got a mortgage between 2009 and 2011. That’s about half the rate of a decade ago for the same age group. According to CreditKarma.com, only 11% of twenty-somethings have a mortgage compared with figure of 30% for all consumers.
Millennials are victims of a perfect storm that’s keeping them out of the housing market. Unemployment among Millennials is high and so is debt, especially student loan debt (>$1 trillion nationwide – that’s more than all credit card debt!). To make matters worse, credit is extremely tight and, despite the decline in real estate, average home prices are still historically high relative to average income.
As many as 85% of them move home after college. When they do strike out on their own, renting seems like the only viable option, not just for now, but for the foreseeable future. For previous generations, events like retirement and second homes required long-term financial planning. Now, it appears long-term financial planning and saving will be required for most Millennials just to buy their first house.