Millennials Holding Back Housing Recovery

Cambridge, MA, June 27, 2014 -- The U.S. housing recovery should regain its footing, but also faces a number of challenges, concludes The State of the Nation’s Housing report by the Joint Center for Housing Studies of Harvard University.

Tight credit, elevated unemployment, and mounting student loan debt among young Americans are moderating growth and keeping millennials and other first-time homebuyers out of the market.

“The housing recovery is following the path of the broader economy,” says Chris Herbert, research director at the Joint Center for Housing Studies.

“As long as the economy remains on the path of slow, but steady improvement, housing should follow suit.”

Although the housing industry saw notable increases in construction, home prices, and sales in 2013, household growth has yet to fully recover from the effects of the recession.

Young Americans, saddled with higher-than-ever student loan debt and falling incomes, continue to live with their parents. Indeed, some 2.1 million more adults in their 20s lived with their parents last year, and student loan balances increased by $114 billion.

Still, given the sheer volume of young adults coming of age, the number of households in their 30s should increase by 2.7 million over the coming decade, which should boost demand for new housing.

“Ultimately, the large millennial generation will make their presence felt in the owner-occupied market,” says Daniel McCue, research manager of the Joint Center, “just as they already have in the rental market, where demand is strong, rents are rising, construction is robust, and property values increased by double digits for the fourth consecutive year in 2013.”

One key to realizing the millennials’ potential in the housing market is for the economy to grow to the point where their incomes start to rise. Another important factor is how potential GSE reform will affect the cost and availability of mortgage credit for the next generation of homebuyers, which will be the most diverse in the nation’s history.

By 2025, minorities will make up 36% of all U.S. households and 46% of those aged 25–34, thus accounting for nearly half of the typical first-time homebuyer market.



Other Archived Articles

Heavy Snow Dampens Builder Confidence   Full Article
Washington, DC, Feb. 17, 2015 -- Homebuilder confidence fell slightly in February due largely to heavy snow in much of the country, according to the National Association of Home Builders.

New York Manufacturing Expansion Slows   Full Article
New York, NY, Feb. 17, 2015 -- The New York Federal Reserve’s manufacturing index showed that conditions improved at slower rate in February.

NWFA Offers Discounts Through CCA Global Division   Full Article
St. Louis, MO, Feb. 17, 2015 -- The National Wood Flooring Association has announced its new Business Marketplace program, in partnership with BizUnite, to provide members discounts in many business operations.

Surfaces Exhibitors Donate Flooring from Show   Full Article
Las Vegas, NV, Feb. 17, 2015 -- Exhibitors at Surfaces last month committed to donating 140,765 pounds of used flooring to the Mountain Re-Source Center.

Floors and More Wins Chamber Award   Full Article
Benton, AR, Feb. 16, 2015 -- Floors and More recently won a 2014 Small Business Award from the Bryant chamber of commerce.

Patent Board Rules for Tandus in Dispute with Interface   Full Article
New York, NY, Feb. 16, 2015 -- The Patent Trial and Appeal Board has ruled in favor of Tandus Flooring in a dispute with Interface regarding a patent on an installation system, according to Law 360.

IICRC Moves Headquarters to Las Vegas   Full Article
Las Vegas, NV, Feb. 16, 2015 -- The Institute of Inspection, Cleaning and Restoration Certification said it is moving its headquarters to its Global Resource Center in Las Vegas.

Kährs Acquires Minority Stake in Pozgaj Flooring   Full Article
Stockholm, Sweden, Feb. 16, 2015 -- Wood and resilient maker Kährs Group said it has acquired a minority stake in recently formed Croatian Pozgaj Flooring.

Consumer Sentiment Falls from January Peak   Full Article
Ann Arbor, MI, Feb. 13, 2015 -- Consumer sentiment declined in February after reaching an 11-year high in January, according to the Thomson Reuters/University of Michigan index.

Mohawk Group Sponsors HPD Collaborative   Full Article
Calhoun, GA, Feb. 13, 2015 -- Mohawk Group said it has become part of a growing list of “Visionary” sponsors of the Health Product Declaration Collaborative.

Earthwerks Signs Distributor Longust   Full Article
Houston, TX, Feb. 13, 2015 -- EarthWerks said it has signed a distribution agreement with Longust Distributing, Inc. to cover the southwestern U.S.

NAHB Analyzes Data on Boomerang Millennials   Full Article
Washington, DC, Feb. 13, 2015 -- A recent study of “Boomerang Millennials” may have important implications for this key demographic and what it means for the housing market, according to the National Association of Home Builders.

Metroflor Names Langstaff Design Director   Full Article
Norwalk, CT, Feb. 13, 2015 – Metroflor Corp. said that Robert Langstaff has been named the company's first director of design.

More Designers, Architects Attend Surfaces   Full Article
Dallas, TX, Feb. 12, 2015 -- Informa Exhibitions U.S. said that attendance at this year's International Surface Event was comparable to the 2014 show.

Retail Sales Decline in January   Full Article
Washington, DC, Feb. 12, 2015 -- Retail sales fell 0.8% last month, according to the Commerce Department.

Jobless Claims Edge Up Last Week   Full Article
Washington, DC, Feb. 12, 2015 -- Initial applications for unemployment benefits last week rose 25,000 to a seasonally adjusted 304,000, the Labor Department said.

Milton Warman, Coloramic Tile Founder, Dies   Full Article
Chicago, IL, Feb. 12, 2015 -- Milton Warman, 92, founder of Coloramic Tile and Carpet Fair, died Feb. 7.

House Price Growth Steady in Most Markets   Full Article
Washington, DC, Feb. 12, 2015 -- The majority of metropolitan areas experienced steady but slightly stronger price growth in the fourth quarter, according to the latest quarterly report by the National Association of Realtors.

Stonewood Floors Names Martin Senior Vice President   Full Article
Everett, WA, Feb. 11, 2015 -- Daniel Martin been named senior vice president for Stonewood Floors.

Mortgage Application Volume Declines Last Week   Full Article
Washington, DC, Feb. 11, 2015 -- Mortgage applications last week decreased 9% from one week earlier, according to the Mortgage Bankers Association.