When we discuss the differences between generations, between millennials and Generation X and the baby boomers and iGen, it’s important to recognize that some traits or trends that may look like characteristics of a generation are really just characteristics of all people of a certain age.
For instance, we may look at millennials and consider them impulsive, and there’s certainly data that would back up that assertion.
But really, most all young people are impulsive. We have found that baby boomers switched jobs at an even greater rate than millennials when they were in their 20s.
It’s with this understanding that we now see that homeownership is on the rise. According to the Wall Street Journal, U.S. Census figures show that homeownership in the U.S. increased to 63.9 percent in the third quarter of 2017 – the highest level since 2014.
That’s still below what the Journal calls the “historic norm” of about 65 percent, but still a trend in the right direction for the housing market. And its main driver is the nation’s largest generation, millennials.
Does this refute our preconceived notions about millennials living at home and putting off major purchases like homes and major life events like marriage?
Not necessarily. It just means more millennials are now of an age where it makes sense to them to buy a house.
About one-fourth of the age range, give or take, is now over 30 – an age where even the most reluctant millennials are more likely to plunge into marriage and homeownership.
It remains to be seen if the new tax law will have an impact on homeownership.
The Home Mortgage Interest Deduction has been pared down, making homeownership more expensive.
The tax reforms also have brought some uncertainty into the lives of taxpayers as they wait to see what exactly the impact will be of the new plan. And, as always, uncertainty causes people to park their money versus invest it. Time will tell.
A byproduct of the rise in homeownership, the Journal notes, is a slump in the residential rental market. More millennials buying homes means fewer millennials renting them.
If you’re a landlord who got in on the gravy train while it was rolling, good for you. If not, you may have to wait a while until iGen starts hitting the market, and the cycle will begin anew.