Renting is more common than ever, but millennials still have hopes of owning a home. Business Insider explains why entering the housing market will be difficult for this young generation.
In this day and age, the 18- to 34-year-old crowd have lived up to their reputation as perpetual renters. Most blame the trend on the housing crisis, which led so many homeowners to downsize and stunted the home buying power of younger consumers.
But whatever trauma the Great Recession had on the minds of millennials, it hasn't stymied their hopes for owning a home of their own one day, a new study shows.
Read on for more.
The question is whether they'll find what they're looking for. The housing inventory has been far from stellar lately, down 23 percent since last year and a whopping 43 percent since 2010, Trulia estimates.
"Many [Millennials] think today’s low prices and low mortgage rates will last," says Jed Kolko, Trulia's Chief Economist. "They may be in for sticker shock if the cost of homeownership has returned to normal levels by the time they’re ready to buy.”
Then there's the affordability factor to consider. People in their 30s saw their wealth diminished the most during the recession, a recent Pew study found, and the underemployment rate is estimated at more than 15 percent.
It's true that home prices have been slowly rebounding, which will hopefully give sales a boost –– 22 percent of homeowners say they'll likely sell in the next year –– and beef up the offerings. Today, 27 percent feel more positive about owning a home than half a year ago, while 19 percent say they're more negative, according to Trulia.
It's certainly not the overwhelming majority's sentiment –– 72 percent still say homeownership isn't their idea of the American Dream –– but it's a hint that consumers' optimism in the housing market might steadily be returning.
"Millennials have been shaken, not scarred by the housing bust," says Kolko. “Nearly all of them want to own a home some day, if they’re not homeowners already."
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