From Bloomberg Business:
Parents, rejoice. Your offspring may finally
be moving out of the family basement.
A new report (PDF)
from Fannie Mae, the U.S. government-backed mortgage company, suggests that the millennial generation is getting a move
"According to the ACS [Census Bureau’s American Community Survey], the number of homeowners aged 25-34
fell by more than 250,000 in each year between 2007 and 2012, but has declined by less than 100,000 annually since then,"
Fannie Mae said. "In fact, the decline between 2013 and 2014 was statistically insignificant, the first indication of
stability in the number of young homeowners since the onset of the Great Recession." So while the number of homeowners
in that age range is still on the decline, the trend looks poised for a reversal, and Fannie Mae said it won't take much
to see positive growth in millennial homeownership in the near future.
The team ran an analysis with
three scenarios for the future of homeownership in this generation. The first assumed a continuation of the decline that
took place between 2012 and 2014. The second assumed that the pace remains the same as what was seen in 2014, and the
third predicted a slight recovery that would see home ownership return to its longer-term trend by the end of the decade.
Scenario one is the only case
that yielded a further decline, and Fannie Mae is of the mind that this particular outcome isn't highly likely
because the labor market continues to show strength and the dream of home ownership lives on in the hearts of young adults.
A report published
by Goldman Sachs earlier this year also pointed to millennials' desire to leave the family homestead. The company's survey
showed that only 12 percent of millennials rated home ownership as "not very important," while 20 percent already
owned a home or were in the process of buying one. Almost 70 percent said ownership was either "very important"
or "important," but it wasn't a near-term goal.
Fannie Mae reckons that home builders will need to adjust
to the realities of a sudden upswing in millennial buyers, with an expected adjustment in the "size, type, and geographic
location of new housing construction." In other words: Bye, bye basements.