Counting on Millennial Homeownership
03/27/12 Baltimore, Maryland – The report that got us started on this tangent this morning: Home prices in 20 U.S. metro areas are now as low as they were nine years ago, according to the just released Case-Shiller Home Price Index.
In other words, housing prices are back where they were when the space shuttle Columbia blew up and Washington was about to foment the doctrine of “preventive war” in Iraq.
Good times.
(The index’s year-over-year decline works out to 3.8%. It would likely have been worse if the weather in January had felt, well, more like January.)
Alas, the Case-Shiller is but one of several limp housing numbers that have been released in recent days.
“From home builder sentiment to housing starts,” writes Diana Olick, one of the more sensible observers of the housing market in the mainstream press, “to home builder earnings right through to sales of newly built homes, there was not one hopeful headline in any of it…”
That Ms. Olick is employed by CNBC is one of those freakish facts we can chalk up only to… who knows, sunspot activity.
A year ago, in these pages, we covered a study from Wells Fargo gushed that “there are 51.5 million potential first-time homebuyers born between 1979 and 1991. Roughly 6 million more of these Millennials are reaching the prime home buying age than baby boomers did in 1977.”
The “Millennial” generation – age 30 and under – concluded the Housing Wire[link], will ride to the housing market’s rescue… restoring the National Association of Realtors (NAR) version of the American Dream.
And yet, one year on the opposite appears to be happening.
“Homeownership rates for young adults have plunged back down to near-1990 lows,” writes the aforementioned Neil Howe, “despite record-low interest rates and very attractive prices for a new home.”
What’s more, first-time buyers are disappearing: From 2009-11, only 9% of people age 29-34 got a first mortgage. A decade earlier, it was 17%.
The reasons are legion: According to a Chicago Fed study, several factors are at work: Young couples are waiting longer to have kids… thus the urgency to buy a home is less.
Good times.
(The index’s year-over-year decline works out to 3.8%. It would likely have been worse if the weather in January had felt, well, more like January.)
Alas, the Case-Shiller is but one of several limp housing numbers that have been released in recent days.
“From home builder sentiment to housing starts,” writes Diana Olick, one of the more sensible observers of the housing market in the mainstream press, “to home builder earnings right through to sales of newly built homes, there was not one hopeful headline in any of it…”
That Ms. Olick is employed by CNBC is one of those freakish facts we can chalk up only to… who knows, sunspot activity.
A year ago, in these pages, we covered a study from Wells Fargo gushed that “there are 51.5 million potential first-time homebuyers born between 1979 and 1991. Roughly 6 million more of these Millennials are reaching the prime home buying age than baby boomers did in 1977.”
The “Millennial” generation – age 30 and under – concluded the Housing Wire[link], will ride to the housing market’s rescue… restoring the National Association of Realtors (NAR) version of the American Dream.
And yet, one year on the opposite appears to be happening.
“Homeownership rates for young adults have plunged back down to near-1990 lows,” writes the aforementioned Neil Howe, “despite record-low interest rates and very attractive prices for a new home.”
The reasons are legion: According to a Chicago Fed study, several factors are at work: Young couples are waiting longer to have kids… thus the urgency to buy a home is less.
Read more: Counting on Millennial Homeownership http://dailyreckoning.com/counting-on-millennial-homeownership/#ixzz1qiy9kUgp
read full article
No comments:
Post a Comment