The Housing Market and Millennials—A Lot of Confusion

 

 

 

 

 

OK, I started to read an article entitled "Resurging housing market fueled by millennials," (full article) and quickly started questioning some of the assumptions. Millennials, the cohort of Americans born between 1980 and 2004 (census bureau says 2000), are the largest generation in the U.S., representing one-third of the total U.S. population in 2013. This chart show the population distribution, by age:

Population dist

 

 

 

 

 

 

 

 

 

 

 

 

We have probably have come across information about the huge college debt incurred by the Millennials. Also, there has been concern about the magnitude of that debt ($1.3 trillion) and how Millennials can afford to buy a house with that debt. We need to look at how many Millennials actually went to college. One source indicated "In 2013, 47 percent of 25 to 34 year-olds received a postsecondary degree," and "About 61 percent of adult Millennials have attended college" (from the same source). Also, of note is that, according to the following chart, Millennials are somewhat less likely to own a home than in the past:

Millennials prob of owning home

 

 

 

 

 

 

 

 

 

 

 

 

It is not so clear how Millennials are affecting the housing market. Another factor is the relative cost of renting vs. buying. Rents have, in general, gone up: in some cases faster than housing prices.

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