Home Ownership – Not just Millennials Fault

Home Ownership – Not just Millennials Fault

By Kevin Chambers

Home ownership levels still have not recovered from the recession. In fact, home ownership percentages continue to fall. We discussed this topic briefly concerning Millennials. However, the Atlanta Fed has just released a report that shows home ownership is falling among all age groups.

Since 2008, the group with the largest decline is actually Americans age 35-44, the members of Gen-X, with an 11% decline since 2005 vs. a 9% decline for Millennials (under 35). Since pre-recession peaks, home ownership in total has fallen from 69% to below 64%. That might not seem like a large drop, but that is back to 1995 levels of home ownership. Today every age group below 65 has a lower home ownership rate than in their same age groups in the 90s. It looks like home ownership is not just a declining trend for the young, although they are contributing.

Millennials are a hot button issue currently. There are many headlines claiming they aren’t buying houses and that is keeping the housing markets tempered. However, this may be a more systemic issue of the overall housing market. With historically low interest rates, it would be expected that more people could afford to buy houses, but this hasn’t happened. Housing is an important indicator that is watched closely by financial professionals to judge the relative health of the economy. The Federal Reserve will no doubt also take this into consideration when considering changes in interest rates. Headwater Investments will continue to monitor this ever important data.