Although homeownership rates remain close to half-century lows, a large percentage of Millennials are still determined to actualize the American dream, according to an article written by Mark Fleming for First American.
First American’s Homeownership Progress Index, which is an economic model that anonymizes census survey data to measure the circumstances that influence homeownership, indicates that potential homeownership demand grew by 1% in 2017 from the prior year, while the actual homeownership rate underperformed potential demand by nearly 9%.
Here is a graph demonstrating the change:
First American attributes underperformance to Millennials, but states that nearly 80% of Millennial respondents to Harvard University’s Joint Center for Housing Studies agreed that homeownership was a part of achieving the American Dream, according to Fleming.
The First American Homeownership Progress Index determined that the homeownership rate is 30% higher among married Millennial couples, 5.4% higher for households with one or two children and an additional percentage point higher for households with three or more children.
However, Millennial lifestyle needs are changing, and many are forsaking family expansion to pursue higher education. That being said, First American’s HPR shows a strong correlation between homeownership and education, as the relation has nearly double in 10 years.
First American also discovered the median age for a first marriage in 2016 was 27.4 for women and 29.5 for men, which was roughly seven years more than the median ages in 1960, according to Fleming.
Although more Millennials are delaying family expansion, First American anticipates they will eventually mirror the idyllic lifestyle of Baby Boomers, therefore increasing homeownership rates overall.