The economic future of Millennials is key to the future of housing demand. A record number of individuals aged 18 to 34 years are delaying household formation as a consequence of the Great Recession. In a recent Eye on Housing blog post, this situation was referred to as the “Great Delay,” as slow wage growth and rising student loan burdens have reduced attainment of traditional goals associated with the American Dream, including marriage and homeownership.
An important research question is whether these delays represent deferrals due to economic conditions or true changes in preferences and goals.
A recent survey from the Demand Institute provides new evidence. The study surveyed 1,000 18- to 29-year-olds about current conditions and market preferences. The findings indicate that homeownership remains an important long-term goal.
Among the findings for Millennials:
- Over the next five years, 8.3 million new Millennial households will form.
- 74% plan to move over the next five years, with the top reason being need for better housing.
- 64% expect to be married in five years and 55% expect to have kids.
- 75% believe homeownership is an important long-term goal and 73% believe ownership is an excellent investment.
- 24% currently own a home and another 60% plan to purchase.
- 36% expect their next home to be a multifamily rental, while another 36% expect it to be a single-family owner-occupied residence.
- 48% prefer their next home to be in the suburbs, while 38% want urban locations.
- 88% own a car.
- Student loans do delay homeownership (but college raises lifetime incomes).
- 44% think it will be difficult to qualify for a mortgage.
For more details, read the survey findings from the Demand Institute.