The number of first-time buyers has slid 20 percent during the last three years, according to John Burns Real Estate Consulting, and home ownership will continue to decline among the 25-to-34 age segment for the coming three years.Â Yet Rutgers Business School professor Ben Sopranzetti says, "This is purely an economic phenomenon, not a behavioral one."Â
Stagnant income growth, huge amounts of student loan debt, and an 8.2 percent unemployment rate for 25- to 34-year-olds have made Millennials less willing to sink their money into home ownership.Â However, analysts believe Millennials will want to settle down as they age and that credit requirements will be eased at some point.
"Once they've paid down their debt, I suspect people will be more financially capable," says San Francisco real estate investor Jake Kraft.Â
For now, developers are breaking ground on multifamily developments, particularly in areas like Denver and San Jose where job opportunities abound; and short-term leases are gaining popularity among young professionals who want to be able to move quickly to take advantage of these opportunities.
Source: "'Lost Generation' of Homeowners May Just Be on Hold," BusinessWeek (07/16/12) Walsh, Meghan