The nation's Millennials are now reaching what should be their pime homebuying years. However, as has been extensively reported, Millennials are not joining the ranks of homeowners in the same numbers as previous generations. Now, Time attempts to solve the increasingly-important question of why Millennials are not becoming homeowners. Reporter Denver Nicks looks at builders specifically and tries to find out why housing supply (for first-time buyers) has not kept pace. Industry data confirms that just 20% of new housing units are starter homes, compared to 30% in past years. That is a critical deficit, considering that historically, roughly 40% of home sales were to first-time homebuyers, a key statistic in the overall housing market. First-time buyers help provide the fuel that allows for “move-up” buyers and keeps the housing ecosystem healthy.
Time finds a few reasons why Millennials are delaying homeownership (surveys continue to show they want to be homeowners), including student debt, waiting longer to form households and have children, and a preference for urban life, where the high cost of construction means fewer single-family (detached homes) options exist.
Hope abounds, however. HousingWire reports that builder confidence is on the rise, indicating homebuilders are optimistic about the year ahead. They point to sound fundamentals (low-interest rates, improved job market, pent-up demand, etc.) and skyrocketing rental prices as a good reason to think a Millennial-driven homeownership wave is coming to a city near you soon. Click here to read more.