Today reams of data are at our fingertips to help understand home buyer trends and preferences and is most often divided into neat groups of generations. However, this report, headed by former HIVE dean Dowell Myers from the University of Southern California and Fannie Mae, shows how and why we can start thinking about home buyers differently.
There’s reason to be optimistic about millennial homeownership.
Many headlines lament the fact that millennial homeownership is at a record low, pointing out that the age range of 25-34 is usually when people buy their first homes. But these popular perceptions are often fueled by comparisons of millennials with people in the same age group but at a different point in time.
This so-called “age-group” approach may be a mistake, according to new research from the University of Southern California and Fannie Mae.
“By focusing on cumulative homeownership attainment as of a given age, the traditional age-group approach confuses recent home purchasing behavior with housing tenure choices made many years ago,” according to the report.
The authors suggest a cohort-based approach, which increments in the homeownership rate for a group of young people as they grow up.
This measure reflects the underlying economic conditions and “the legacy of its past pace of advance under sometimes very different economic circumstances.”
In fact, no age group has experienced a statistically significant boost in the homeownership rate — even between 2014 and 2016, when job gains and income were healthy in the U.S., according to the report.
Particularly for millennials in their 30s, the low homeownership rate reflects recent home purchases in a healthy economy as well as earlier decisions during one of the worst recessions in history.
Which all leads to the new approach. Keep reading...Read More