“No, it’s not for me, I’m not going to make the mistake that my parents made. They’re trapped in their homes, and I’m going to try to be more flexible.”
This phrase should curl the toes of every real estate agent in the country. This is a phrase that the demographer Cheryl Russell who is studying what 25–29 year olds thinking about buying real estate has been hearing recently.
Yes those same 25–29 year olds that comprise a large part of the first time home buyers that we need so desperately to solidify the market. This may explain why the percentage of first time home buyers dropped from it’s normal 40% to 34% the past month.
The Los Angeles Times article goes on from there:
But I see a resurgence in rentership. As these renters get a little older, they’ll want more specific features in their rentals. If I were a developer, I’d be very interested in rehabbing single-family homes and then turning them into rentals, but I’d make them more attractive for these young adults by adding bathrooms. If they’re going to have to have roommates, they’re going to insist on having their own bathrooms.
Homeownership peaked in 2004 at 69%. We are now at 66.9% and Ms. Russell is expecting that number to drop to between 64% and 66% of Americans to own their own homes over the next few years.
The real estate industry has an expectation that American’s are driven to own their own home. The American Dream.
Well the next generation of first time homebuyers may disagree. They have seen how home ownership may lock someone into a regional area instead of moving to where the jobs are. They have seen the effects of lost equity. They also are facing an unprecedented amount of educational debt that is precluding them from entering the job market to begin with.
The loss of a good percentage of the first time home buyers is going to continue to put pressure on the American housing market for years to come.