We found an interesting article via CNN Money on young adults affecting the housing market potentially be the next 10+ years.
Even though most Millennials’ have made the move back to their parents’ homes after their recent graduation, it’s safe to say the majority of these young adults won’t be there for long.
“Somewhere around 11 million recent grads were living with a parent in 2012, according to Pew. The home ownership rate for those under age 35 was 36% in the first three months of 2014, down from a high of 43% in 2005, according to the Census.” (CNN)
Why aren’t they buying a home?
There are three main factors holding them back from buying a home, said the Harvard study: A weak job market for recent graduates. Student loans. And tight lending standards. However, with the economy turning around these obstacles are becoming less frequent. Which will eventually lead to them jumping from the nest (for a second time).
At some point they will land that job and then their story begins… or should I say the market changes. According to a study by Harvard’s Joint Center for Housing Studies, by 2025 these Millennials’ could form 24 million new households. That is a major surge in the housing market. Current homeowners looking to move up from their starter homes will look to this generation to purchase their single family homes.
“When the job market recovers and their income recovers, they are going make their mark on this housing market,” said Christopher Herbert, research director at the Harvard division, in a panel discussion following the release of the Harvard report.
Instead of a mass move from their parents’ homes, the authors said Millennials’ might decide to trickle out, which could in turn create the economy’s steady and slow recovery.