Not long ago, the majority of homebuyers bought their first house in their 20s. In recent years, however, the age of first-time homebuyers has increased. Ten years ago, the homeownership rate among young adults under age 35 was 43.6%, according to Census data. Today, just over 36% of adults under the age of 35 own a house.
There are a number of factors that play into this data: fewer jobs, delayed marriage, higher debt and poor credit scores. Eric Belsky, managing director of Harvard’s Joint Center of Housing Studies, shared at The National Association of Realtors® conference in Washington, D.C. last week, “There really are serious issues in the first-time buyer market.” Belsky estimates that nearly three million more young adults live with their parents today than compared with 2007, before the Great Recession kicked into gear. This results from the underlying problems with student loan, debt, the job market and increasing housing costs in many areas.
The average college graduate tends to carry a large debt load as soon as they step off campus. According to the Federal Reserve Bank of New York, student debts collectively add up to $1.1 trillion. Student loan default rates also climbed to nearly 12% last year, up from 6% in 2003.
Millions of adults today are affected by this recent trend. Parents with hope of downsizing are once again providing housing for their adult children. Homeowners with growing families, who want to move up in house size, are finding fewer homes for sale. And of course, young adults carrying debt find it difficult to buy a house.
Joe Horning, President of Shorewest REALTORS®, says “Now is a great time for young adults to invest in home ownership — especially, if they are renting. Home prices, along with mortgage rates, are more affordable today. Plus, home ownership is a great long-term investment.
Categories: Home Buying