Mounting student loan debt among young Americans, tight credit, and unemployment are among the factors moderating housing growth and keeping Millennials and other first-time homebuyers out of the housing market, according to a report released this morning by the Joint Center for Housing Studies of Harvard University. The Joint Center does expect the U.S. housing recovery to regain its footing even as it faces several challenges.
“The housing recovery is following the path of the broader economy,” says Chris Herbert, research director at the Joint Center for Housing Studies. “As long as the economy remains on the path of slow, but steady improvement, housing should follow suit.”
The U.S. housing industry saw increases in construction, home prices, and sales in 2013, but household growth still has not fully recovered from the Great Recession.
Young Americans, saddled with higher-than-ever student loan debt and falling incomes, continue to live with their parents. In fact, 2.1 million more adults in their 20s lived with their parents in 2013, while student loan balances increased by $114 billion.
Millennials still make up the largest demographic cohort the United States has ever seen, meaning there's a huge number of young adults coming of age, and the number of households in their 30s should increase by 2.7 million over the coming decade. That is expected to boost demand for new housing.
“Ultimately, the large millennial generation will make their presence felt in the owner-occupied market,” says Daniel McCue, research manager of the Joint Center, “just as they already have in the rental market, where demand is strong, rents are rising, construction is robust, and property values increased by double digits for the fourth consecutive year in 2013.”
to Daily News