Millennials aren't buying homes - good or bad?

Millennials aren't buying homes - good or bad?

Appraiser · Denver, CO · Member since 2018 · 40 posts · 58 votes

As many of us are aware, millennials are more apt to renting rather than buying real estate. They (we?) are replacing baby boomers at a rapid rate, and are right behind Generation Z... Of course, Generation Z still has a while to develop before they are able to buy real estate or rent, so in the very near future, Millennials are going to be the largest generational demographic. 

From CNBC: "The homeownership rate among millennials ages 25 to 34 is around 8 percentage points lower than Gen Xers and baby boomers was in the same age group."

The Urban Institute did a study and reported that Millennials getting married later and less often plays a major role, as well as Millennials typically deciding to rent in higher income areas instead of the poorer areas. High rent + single incomes + median credit score of 640 = less homeownership. 

As investors, does this information change your perspective on investing? Or have you implemented a plan to adapt and flow with the changing real estate market?

As a whole, to the more experienced and economics-minded investors, could lower homeownership lead to more instability in the market? 

As @J Scott likes to say, there are always ways to capitalize on changes in the real estate market... What are your methods? 

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
7y

Millenial home ownership rate is 8% below generation X. Hardly a big delta considering that most 22 year olds dont own homes. Oh, and once they hit age 35....there homeownership rate jumps to match gen Xs.

Homeownership rates have not drastically changed in almost 100 years. People make a big deal out of things like 2006 being the highest rate or earlier in this decade being the lowest rate...but we are talking about a range of 62% to 68%. So you take the long term average of around 65/66% and the highest and lowest rates have only been a couple percent above and below the long term average.

Is there an economic impact in that couple percent change? Sure. Is it materially significant? Unlikely. More so its good for the media to get clicks or views than anything else.

Remember, there are lies....there are dmaned lies, and then there are statistics. Stats like millenials having low home ownership rates sounds really interesting until you put it in perspective.

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  • Specialist · Baltimore, MD · Member since 2016 · 384 posts · 318 votes
    7y

    @Jennifer McMurray, I agree with you about AirBnB being far from passive. I'm going to keep mine going for a little while longer but I am definitely not into it for the long haul. 

  • Investor · Raleigh, NC · Member since 2015 · 189 posts · 102 votes
    7y

    @Grant Rothenburger i agree. I’m 27 now and it seems this is the “tipping point” of where most of my friends either have bought a house, are actively trying to, or at least “want” to.

    ....

    Also seems to be the point where most couples are actually “settling down” so that makes sense.

  • Rental Property Investor · Triangle, VA · Member since 2019 · 29 posts · 18 votes
    7y
    Originally posted by @Elbert D.:

    buying homes?????Nahhhhh we dont do that. The thing to do is go to college and rack up debt. Not having a clue what we plan to do after we graduate. "We are going with the flow" In the meantime we are in college we are getting accustom to the "turn up" lifestyle gotta always go out every weekend and party right? This is afterall the thing to do in society right now...^__^ smoke and drink so much we arent able to function the next day. Then spend the next day sleeping/recovering from the night before.

    Once we graduate we complain about the lack of jobs and how life sucks. In the meantime we are living with either family or friends or we are renting in one of the trendy areas of the city. ^__^ we have to always be in the know....ya know? Cant miss out on any event or concert that goes on.....




    *end of sarcasm* sadly.....this is what most people do near my age.....

    Elbert, you just fully described my sisters and cousins all still stuck in the "Chicago lifestyle."  Some have never even left the city due to this lifestyle.  It's sad, but all I can do is try to educate them on better ways of living; which they don't want to hear.

  • Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes
    7y

    Its whats being promoted in the society today. SMH. Keep you distracted with a bunch of foolish news. Keep you drugged up and never question anything. Its not just in Chicago but all over America. To be honest a lot of people just want the lifestyle of the wealthy/rich and not do the work......

  • Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    7y

    My last 3 single-fam sales were all to millenials. Their 1st purchase, owner-occupied.  Price point had something to do with it I'm sure.

    1 listed, staged, retail-ready,  2 by owner and needing some work.

    My area is about 25% Latino.  All 3 of mine were sold to Latino millenials.  Thought that was interesting.  

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