Dive Brief:
- The residential industry is steadily recovering from the housing bust, but people in Generation X — or those born between 1965 and 1984 — are still struggling to see the recovery. Analysts say the gun-shy demographic may take years to return to its previous homeownership rates, The Wall Street Journal reported.
- Generation X came into the housing market pre-crash and had impressive homeownership rates. However, after the crash, they became renters hesitant to dive back into the market, or they simply gave up on the idea of owning a home, according to The Journal.
- Gen Xers ages 35-44 had a dismal homeownership rate of just 58.5% in 2015, in comparison with a typical 65.8%, according to The Journal's analysis of federal data. Along with the waning number of households headed up by people in their 30s and 40s, that age group has offered up three million more renters than usual.
Dive Insight:
Generation X’s low homeownership numbers, combined with the millennial pattern of living at home longer and delaying marriage and family, has housing experts concerned about overall homeownership rates, particularly because the dearth of Gen X homeowners who would be selling and trading up by now are most likely contributing to the current low housing inventory.
The housing boom saw homebuyers of all demographics lured into buying homes they couldn’t truly afford. When the housing market collapsed, many homeowners found themselves under water on their home loans. Baby boomers and older homeowners were the least affected by the bust because they bought their homes prior to the run-up to the collapse, according to The Journal.
But not all former homeowners are ready to turn over their keys to the landlord and buy a house just yet. Many can’t qualify for a loan so soon after a foreclosure or short sale, and some prefer the low-pressure lifestyle of renting, according to The Journal. In fact, a 2015 National Association of Realtors study found that approximately one-third of homeowners who lost their home by foreclosure or distressed sale between 2006 and 2014 won’t ever own a home again.
