Over the last few years, two disconcerting trends have been rearing their ugly heads in the housing industry. The first is that household formation has been standing still while the second is a dwindling rate of homeownership. However, the first trend may be recovering since the millennial generation is starting to make its way into the world by finishing college and obtaining well-paying jobs. Unfortunately, homeownership rates are still dropping.
A study completed by the Mortgage Bankers Association, or MBA, tracked data from 1975 to 2014. According to the assessment, during the next 10 years, the demand for houses will grow. In the report, the research team said, “By 2024, demographic and economic changes will bring what could be one of the largest expansions in the history of the U.S. housing market.” In fact, the research group estimated that the growth would total more than 15.9 million households.
Societal changes and the Great Recession caused many people to alter key life stages. In a comparison between the early 1990s and now, more of today’s women are going to college to earn a degree. As a result, people are marrying later in life and starting families in their 30s, which is causing them to put off homeownership.
According to the MBA study, the recent drop in homeownership is unlikely to remain a permanent condition. In the past, people usually purchased homes based on the country’s economic conditions, federal policies regarding homeownership and the mortgage markets. In addition, an aging population generally signals a boost in the housing market, and the millennials are growing up fast.