The higher interest rates recorded in early 2024 are being seen as the primary reason for a decline in the number of younger people buying a house, says a new industry study.
According to just-released figures from the U.S. Census’s Housing Vacancy Survey, only 37.4% of people under 35 years of age owned a home as of the first quarter of this year.
That figure represents the lowest level seen since the first three months of 2020, just as the Covid 19 pandemic began.
That’s a drop from the 38.5% recorded during the final quarter of last year, and drastically smaller than the 62.4% of homeowners in the 35 to 44 years of age category.
The Millennial generation, whose members were born between 1981 and 1996, have proven “particularly sensitive to mortgage rates, home prices, and the inventory of entry-level homes,” notes a release issued by the National Association of Home Builders.
Generation X members, or those born between 1965 and 1980, saw a 75.8% home ownership rate; while the Baby Boomer generation, born between the year after World War II and 1965, continue to own homes at the highest rate: 78.6%.
The Census study also showed that, averaging all age groups, homeownership rates stood at 65.6% as of late this summer. The national average has stayed in that range for the last several years and has never been greater than the 69.2% seen in the spring of 2004.
The Housing Vacancy Survey also showed that home ownership rates were the highest in the Midwest at 70.1%, followed by the South at 67.2%, the Northeast at 62.2%, and the West coming in at exactly 61%.
Despite their lower home ownership rates, Millennials, according to a recent report published by the Senate’s Joint Economic Committee, comprise more than 75 million people.
“These numbers translate into significant economic power,” said the report, “accounting for more than $1 trillion in direct spending.”
Analysts are predicting that Millennial home ownership rates will more than likely pick up within the next year, responding to a continued decrease in national interest rates.
October 31, 2024
By Garry Boulard
Photo Courtesy of Pixabay
