Homeownership Among US Millennials At All Time Low

Tyler Durden's picture

After dropping to an all time low 62.9% in Q2 of 2016, the US homeownership rate rebounded modestly in the subsequent two quarters, before once again taking a step lower according to the latest Census data, released last week, and which showed that the percentage of US homeowners declined from 63.7% to 63.6% in Q1 of 2017, less than 1% from the all time lows in the series history going back to the mid 1960s.

A breakdown of the data by age group reveals that the primary driver for this latest decline was once again the youngest age cohort. While older Americans, especially those 65 and older, have predictably seen only modest declines in their homeownership in recent decades, it was the youngest age group, those 35 and younger, i.e. the Millennials, who once again decided against owning and chose to rent instead.

As shown in the chart below, the homeownership rate for Americans 35 and younger slumped from 34.7% as of December 2016 to 34.3%, in line with the lowest rate reported by the Census Bureau going back nearly a quarter century. Of note: the largest decline in the homeownership rate following the collapse in the house market occurred for households aged 35 to 44, although it appears to be stabilizing in recent quarters.

And since most young Americans are opting not to own, but rather rent, the latest data from the Census showed that in Q1, the median asking rent was flat at $864, just $6 below the all time high recorded one year earlier.

Broken down by region, there has been a sharp spike in asking rents in the Northeast region, which continues to closely compete with asking rents in the West, i.e., California, with the median rent in the two regions approximately $1,100 and well above rents in either the Midwest or the South.

That said, the contribution from owner-occupied households to overall household growth continues to increase, while the contribution from renters has stabilized after falling sharply in late 2015 and through much of 2016. On a year-over-year basis, the four-quarter moving average of renter-occupied households increased 599,000 in the first quarter, while the four-quarter moving average of owner-occupied households increased 441,000. The gap between the increase in renter- and owner-occupied households was the narrowest since the second quarter of 2007.

Finally, Census also revealed an increase of 158,000 households in the first quarter, following an increase of 47,000 in the fourth quarter of 2016. On a year-over-year basis, the number of households was up 1.219 million in the first quarter, up from 804,000 in the fourth quarter. The HVS data can be noisy, so we focus on year-over-year changes in four-quarter moving averages to assess trends in household formation. On that basis, the increase in households in the first quarter was 1.039 million, up from 878,000 in the fourth quarter.

Source: US Census

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Clock Crasher's picture

"..Until they wake up homeless on the continent their forefathers conquered."

Clock Crasher's picture

I'm personally looking into a bungalow in a certain Caribbean country. Trim here is fantastic.

Half million starter home in Long Island built in the 60s?

PASS

FireBrander's picture

My favorite Bush (paraphrased) quotes on the housing market:

Pre Bubble:

"My administration is going to remove the greatest obstacle to home ownership; the down payment".

Max Bubble:

"Under my administration, the American Dream of home ownership is at record highs"

Post Bubble:

"This suckers going down"

toady's picture

Gotta love the bushisms. Of course, that only led to the "teleprompter-in-chief"... and now "yuge"... I guess words really do matter.

But back to the article. millennials are not "choosing to rent". They either live in the dorm or move back into mom's basement.

D Nyle's picture

Millennials are not stupid, they most likely have Divorced parents and know the home/homes will be left to them.

It was Clinton with the Community Devolopment Act and the repeal of Glass-Steagall that added the most to the Sub Prime Crisis.

Where Bush shows up in this, is the Hiring of Hank Paulson. It was Greenspan and Paulson (head of Goldmans Sacks at the time) that pressured Clinton into Repealing Glass Steagall 

toady's picture

Just from personal experience, it does appear that the millennials plan is inheritance. Each of my 4 siblings has a millennial living in their basement that openly announces that they'll never leave, that they are just playing video games, waiting for their parents to die.

The problem is the other millennial siblings that are lining up to get the house/sell the house to line their pockets....

It's gonna be some tough sledding after the parents die... lawyers are in for a windfall when all these wills are disputed!

johngaltfla's picture

LOL, silly people. They are too busy spending money on the FyreFestival (one of the best Twitter follows in ages) and getting ripped off by stoned rappers and tech "gurus" to buy houses.

kareninca's picture

That sure makes parenthood sound appetizing.

JRev's picture

Certainly can't speak for all Millennials with divorced parents, but what I can tell you from personal experience is that most of our folks split (as do the vast majority of couples) over financial issues. Most of our parents are also Boomers who lived high on the hog throughout the late-80s to mid-2000s as we came of age, only to lose their six-figure salaries, their 401k's, and their homes all in one fell swoop. 

I came home from my grandmother's funeral in '07 only to discover a crew of large Arabian men tossing the contents of our living room into our front lawn. Should've seen it coming, what with the intermittent electricity and heat in that ridiculously excessive McMansion, but hey, I was a naiive kid. Dark days.

Both my parents are now renters and will never find themselves able to buy a home again (not that they should after being foolish enough to get fleeced the first time). Hell, they're barely keeping their heads above water. The lazy kids whose parents still have enough money to float them have adopted a nihilistic, alcohol-laden worldview, sure, but just as many are left bouncing from odd job to odd job. Pocketing $30k a year is seen as a solid footing. The vast majority of the "boomerangers" I know haven't returned home to leech off of Mom and Dad so much as out of necessity - not just for themselves, but to help their parents make ends meet as well. Cohabitation is rampant, too. Hardly indicative of an "inheritance generation," though I do know a few like this. The son of a Pfizer exec comes to mind, but this is obviously atypical.

There are only two and a half types of Millennials who're doing well for themselves that I've come across: Ones with 4-year degrees in Engineering (mostly Computer Science and Electrical Engineering) and those in the cannabis industry, both white and black market. Both are highly competitive fields, but this is, as Catherine Austin Fitts would say, "Global Economy 3.0." Assimilate and gain a marketable skill or die. 

The "half" are journeymen electricians, plumbers, and HVAC techs - doubtlessly lucrative and honorable careers, but these kids are also laden in trade school debt that often exceeds traditional student loans before they're allowed to enter a true "apprenticeship" position. But at least they make more than those with useless BAs in Philosophy. Most of those simply go on to Grad School to defer loan payments even if it means going into more debt (brilliant, eh?)

This is, sadly, why UBI will be so easy to sell to the serf generation - even those of us who aren't "snowflakes" (and we are many) have received nothing but a stick in the eye for our effort to stand on our own two feet. People on the Hedge love to rag on Millennials 'cause the worst of 'em are an easy target, but fuck if we weren't the ones who shit all over the future of Western society. That was our spoiled-ass parents, we simply live in their wake.

D Nyle's picture

Very informative, Please post more, your insight from the "Ground Floor" is needed more on ZH

JRev's picture

Thanks, man. I'll be sure to do that. A few notes on Millennials culturally:

  • Substance abuse is rampant, even among those who're "put together" - as if a subconscious act to dull the senses and extend adolescence. Many are also tobacco users of some stripe, from casual to addict, also symptomatic of generational nihilism/"death wish" culture. 
  • Though social connections have seriously deteriorated due to Millennials' Borg-esque integration with modern social media, it's also created a generation of cynics, as vast access to information has made many of us "conspiracy theorists," though largely on an issue-by-issue basis. Very few put all the proverbial macrofinancial and geopolitical dots together, but most are willing to discuss it - moreso than any other generation I've interacted with.
  • Millennials will be the generation to "slay God" in the Nitetzchean sense - most are utterly areligious, though not necessarily aspiritual. Make of that what you will, but on a pragmatic level, it means most have adopted a "decentralized" moral code more based upon kinship as opposed to heirarchical power structures. Unfortunately, this means that just as many have merely adopted the State as "God" and the cultural rift here, even intergenerationally, is stark.
  • Millennial girls are loose as hell with their sexuality and it's created a generation of non-committal beta males as a result. Can't say if this is strictly generational or a cultural trend more broadly, though.
  • The stark contrast between the "haves" and the "have nots" has deepened intergenerational rifts among the young, but one of the most saddening is the toll Globalist economic stratification has taken on work ethic. Those whose parents aren't wealthy enough to subsidize their existence are diligent, often holding down multiple jobs/streams of income to make ends meet. They stand in stark contrast to the snowflakes, basement dwelling boomerangs, and "lifelong college students" who are a net drain on society yet live far more comfortbale lives.

I live in the Midwest, the Land that Time (and bank reinvestment capital) Forgot, so YMMV.

not dead yet's picture

Just another boomer hating dumb ass spouting his ignorance. There's trash in every generation and it's the ignorant that blame others for their failures.

Speaking of ignornat, look at the figures not the stupid graphs which are misleading if you don't take the time to see the graduations.  The drop in home ownership is miniscule and not even worth mentioning yet no one has figured that out as they spout their biases. More like within the margin of error. The millenials are still a young generation and for over a third of them owning homes at the present time is significant. In my neighborhood almost all the houses bought in the last couple of years were by millenials with families. Nice quiet neighbors who mind their own business and take pride in the homes.

Another misleading stat is millenials don't want cars. Around one third of all NEW car purchases are millenials. They are passing up boomers as major buyers at collector car auctions.

Over half of all college grads do so with NO debt thanks mainly to their "selfish" boomer and Gen X parents and grandparents. The average loan balance is 30 grand not the hundreds of thousands those pushing an agenda would want everyone to believe. Plus if your income is low enough those with a loan don't have to make payments. The millenials are not that badly off it's all bullshit by those catering to the losers, of which there are plenty in every generation, to make money off of them.

Yog Soggoth's picture

Even if someone died and left them a home most would get behind on property taxes and not have the werewithal to correct the situation in time. My parents are living in the past and broke. The younger crowd in my fam are so screwed up they couldn't work their way out of a wet paper bag. Guess that was the plan, kill the Alpha males by any means neccesary.

divingengineer's picture

Are you going Palapa or corrugated tin? Or a fusion of the two? Who's your architect?
And I always found the gash to be stinky in the Caribe.

Clock Crasher's picture

I'm fond of the good olé lean to

Tarp, twine and four trees

Split tail is of Spaniard decent mixed on occasion

Wish me luck

 

BustainMovealota's picture

"The issuing power should be taken from the banks and restored to the people, to whom it properly belongs." TJ

 

very true

divingengineer's picture

Problem is the "people" are retards. The "people" run shitcago and S.F.
Do you really want them running the printing presses?

harry555's picture

Who on earth downvoted that?

yogibear's picture

They will buy tiny homes and live like nomads. Starve the public union beast by moving to a cheaper area when it gets too expensive.

Yog Soggoth's picture

That's funny because I got a couple like that in our fam. Yeah, you are going to starve the beast by not driving while working at some chain that will pull out of town as soon as the market says so. Good way to get run over, or have some ghetto type throw a beer bottle at the back of your head going 70 MPH on your way to work. Heres a tip MILLENIALS, if no one wants to even buy the stock of the company you are working for, you probably should be looking for another job yesterday(starbucks). If you can't afford life(same). Don't get me started on the alternative food thing because we used to hunt squirrels and fry'em in peanut oil back when that was made in Georgia.

Yen Cross's picture

  When you have retarded mental midgets running the till? Don't get me started on the graft,

 I'm going tp get involved personally in repealing the "gas tax+reg fees" in Kalifornia.

 I'm going to help remove, one-by-one, the Libtard scum from the State Assfarcely.

 W e already PAY over 90 cents per gallon in taxes!   The new tax goes into the "General Fund" and our roads will NEVER get fixed!

 

  CALPERS MUCH ~~ ~ Bitchez???  Pensions underfunded?

arby63's picture

Let us know how that works out for you. Kalifornia isn't even part of the country anymore. It's just sort of there.....

divingengineer's picture

I'm with you.....what's the plan?

Yog Soggoth's picture

If you do decide to move just don't tell anyone where you came from, and especially don't make any suggestions about how things should run. I always wondered how many actual citizens lived out there and have to put up with the same crap as the East.

nmewn's picture

These Millennials are not to be confused with the Millennials who got scammed by Ja Rule at Fyre Festival 2017. Those Millennials spent THOUSANDS of dollars (so they clearly had money) for the "VIP treatment"...which consisted of gourmet meals of cheese sandwiches (lol) with lettuce & tomato served on a styrofoam takeout plate and sleeping in "cabanas" that bore a remarkable resemblance to UN disaster relief tents.

I'm-Jus-Sayin! ;-)

divingengineer's picture

Gets em ready for the FEMA camps when Trump declares a state of emergency and rounds them up like the cockroaches they are.

Offthebeach's picture

So long as there is free broadband and organic vegan fare( maybe Starbucks), no one one will mind.

 

techpriest's picture

Yes, exactly. That type is extremely rare, much like the 3-4 kids in your 1,000+ student high school who had Daddy buy them a BMW.

Going from my own recent experiences, the issue is that there's an unprecedented number of cash buyers. These are either big banks or the Chinese trying to get whatever money they have away from President Xi, who might just seize it come SHTF (this is the sentiment anyway).

So, some late-20s Millenials who would have done just fine scraping together $20-25k since leaving college/high school (IOW, skipping Starbucks and saving $250 a month) to make a down payment on a $125k house are now forced to square off against a flood of buyers who are paying $250k cash for the same house, and renting to said Millenials at a rate that would be higher than a 10-year mortgage on the same house, at realistic pricing.

I am Jobe's picture

Maybe they are looking at how stupid their parents were , with their decisons about homeownership, jobs and marriage. In the end they got divorced, sold the house and living in trailer park was the end of the so called dreams. 

clade7's picture

  Maybe...I dont think thats the driving impetus of Millenials though...sure they witnessed what you stated, Their folks pulling plow for no reason... ...and yes they think we are stupid..accepted.....I think all they care about is frappacinos, Computer games, and smoking fantoozlers on the weekend...Occams Razor at work!

FireBrander's picture

"Home prices always go up"

Working off that "fact"; you should buy the biggest house you can (or can't really) afford, live in it, retire and sell it to your kids generation.

What could go wrong?

Oh, instead of your kids buying your house, they decide to live in it, with you, until you die...ooops!

847328_3527's picture

An aquainatance just told me his 42 year old son (and his wife and three kids) just moved back into his house. The daughter majored in marketing and basically lives off them also as a jobless vagrant in LA. She has more body piercings then I have fingers and toes.

A real American success story!

divingengineer's picture

Gen-Xers behaving like millennials, shameful, just shameful.
I'm embarrassed.....for them.

Mazzy's picture

I have that kind of co-worker, the type of deadbeat white trash who has more invested in his tattoo portfolio than in real assets.  Of course he got a free house from dad and his baby-mama subsists on welfare, so not only does he not have housing expenses other than utilities, but he doesn't actually provide for his own kid (and baby-mama's two others by two dads). 

Must be nice, but I probably wouldn't want to live with all the stress that causes or the burned bridges.  Rapidly approaching 30 and still sproting gauged piercings and driving a faggoty tuner car (must be nice to not have real expenses to engage in this type of hobby).  If he ever found out he'd probably be mad that I've surpassed him in wages with 3 years experience to his 10.  I'm venturing out on my own, people like to do business with a well-dressed, clean cropped veteran with a calm demeanor.

Yog Soggoth's picture

Your hired. My whole life a tatto better say mother with a heart or a company regiment in a respectful place. Piercings, you better be in the jungle. Nothing has changed. But I read online that it's cool now. NOTHING. No job for circus freaks.

divingengineer's picture

Don't worry about peckerwood, he'll turn something up. Sounds like my little brother, I have never asked for or received a dime while step momma makes sure he has my fathers rental house given to him when he gets his spic girlfriend pregnant, "for the baby". 34 years old and he has never bought clothes for himself, never had a loan or any credit, never bought anything in his life other than booze, mommy does it all.

arby63's picture

Uh? You poor or what? There's a big world out there for the taking. 

I am Jobe's picture

Daddy and Mommy are broke senind them to school and soccer, football practice and college. Now parents are eating top ramen 

Dilluminati's picture

Nope parents and children eating catfood, Ramen noodles a treat.

Dilluminati's picture

Buy a home with what?

Surely you jest.. I sold a home last september and the new occupants seemingly were fucked up on drugs, the neighbors want nothing to do with them, police there, guns, riding around the property at 2am, etc.. seems like the only few that could scrape the deposit on the loan together was probably drug money..

bank owns it now, the ceilings are painted BLACK.. lol 

Cannot make this shit up.. 

their monkey and their circus

 

Houses Depreciate's picture

The homeownership rate is at 50 year lows and demand at 20-year lows and falling.

oldguyonBMXbike's picture

The Millenials aren't buying houses, because they know that they'll all be sent off to die in Zionist banker wars.

FireBrander's picture

Dude, sending people off to die in wars was decades ago...drones, baby, drones....we now send machines to kill people without similar machines...good news is, they're mostly brown and black people...so all's good, right?...well, at least that's what 8 years of a BLACK MAN in the White house has taught me...

847328_3527's picture

I see house prices actually dropping. My brother lives in a "hot area" of texas west side of Houston and also sees prices dropping or moving sideways prob due to the energy bust. North of Houston and north of Austin raw land is dropping. Used to be minimum $15,000/acre but now hanging in around $7K to $8k per acre and RE economist say it will revert even lower to $3k to $4k with time.

RE was so out of line with reality for the average American I am glad to see it finally correcting, at least in some areas.

Your Good Friend's picture

Even $3k/acre is massively inflated over long term trend. If you paid more than $500/acre, you got burned.

ElTerco's picture

Wow. It is over $300,000 per empty acre where I live. The cheapest acre in the shittiest area is $50,000, but you have to buy in bulk for that price. The expensive acres are over $1,000,000.

Yog Soggoth's picture

 You might be living in a bubble if ...

Houses Depreciate's picture

Sounds like prices have a long way to fall.