This blog post was guest written by Habitat Wake Volunteer, Ava Gruchacz.
If you know anyone in their mid-60s, chances are they’ve been a homeowner for almost 30 years. And if you know anyone in their mid-40s chances are they, too, have owned a home for almost 20 years. Up until this current generation of millennials—defined as being 21 to 37 years old—the average home buying age was 20-30 years old. Currently, many millennials are not buying a home. Why not? In a new report on millennial homeownership, the Urban Institute found several reasons for this trend, including historical context, later marriages, higher levels of student loan debt, and —most importantly— increased racial diversity. Increased diversity is significant because of the disparities in homeownership rates by race and ethnicity that still persist across the country. We explain more about each of these aspects below.
Urban Institute also found that parental homeownership heavily influences the opportunity and ability of their children to become homeowners themselves. Moreover, it is important to note that millennials witnessed the burst of the housing bubble, creating the Great Recession from 2007 to 2009, which could have negatively influenced their attitudes and opinions of homeownership
Marriage and Debt
Marriage increases the probability of homeownership by 18%. Between the years 1990 and 2015, the rate of marriage among young adults has dropped almost 13%. There are many explanations for why millennials are getting married later in life, including higher levels of education. Without a doubt, with more education comes more debt. With more debt, comes less incentive to buy a home. Additionally, highly educated millennials frequently live in major cities centers where homeownership is more expensive.
The millennial generation is significantly more diverse compared to previous generations. Expanding wealth disparities between race and ethnic groups contribute to the decrease in overall homeownership rates. If the wealth gap is left unaddressed, disparities among white, black, and Hispanic millennials will likely keep getting wider.
Why does it matter?
Homeownership is one of the major ways that families build wealth. In fact, a house typically makes up two-thirds of a family’s overall wealth. The average homeowner has $231,420 in wealth compared to $5,200 of the average renter. By making homeownership affordable, our community can invest in future stability for local families.
We can help!
At Habitat Wake, we believe that everyone deserves an affordable home. Our goal is to provide affordable homeownership opportunities throughout Wake and Johnston counties. As housing costs continue to rise, this work becomes even more important. In Wake County, 91,000 families are having to pay too much of their income toward housing. In Johnston County, more than 17,000 families face similar challenges. We invite you to join us by volunteering, donating, shopping at one of our ReStores, or using your voice to advocate for housing affordability in our community. Together, we can build a world where everyone has a safe, affordable place to call home.