You have, perhaps, heard that we are in a new reality often enough now that you’ve turned off the sound, but Realtors, in particular, as well as others whose income is impacted by home buyers are going to want to crank it back up for a minute or two.
The generation born from the mid-1980s to the mid-2000s, also called Millenials or Generation Y, aren’t buying homes like their predecessors because of debt to finance higher education for those with college degrees and relatively lower pay for those with less education.
Further, according to a report from CoreLogic, a national real estate data firm, Millenials are putting off marriage longer than earlier generations. Because marriage is a big motivator in the decision to buy a home, the tilt increased even more for them to reach home-buying status.
Consider, according to CoreLogic:
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• The homeownership rate for 25- to 34-year-old Baby Boomers was 51.6 percent in 1980, but had dropped to 37.9 percent for the same age group in 2012.
• Millenials, statistically, rank ahead of Boomers and Generation Xers when comparing relative household incomes of those in 2013 to those the same age in 1995 and the early 1980s. But that’s true only with the college educated, who are also the ones with the big debt for education.
• Those Millenials with just some college had incomes 6 percent lower in 2013 than Generation Xers in 1995 and 12 percent lower than Boomers in the early 80s.
• Those with a high school diploma made, relatively, 12 percent less than Xers and 19 percent less than Boomers.
• 36 percent of Millenials lived with their parents in 2012, the highest rate in at least 40 years.
The upshot, said CoreLogic, is that the economic statistics that define Millenials have also slowed the generation’s household formation rate.