Millennials in the Housing Market: The Transition to Ownership in Challenging Contexts

ABSTRACT

In the context of rising housing costs, volatile housing markets and changing family structures, I examine the transition to ownership of young adults, and specifically the ownership paths of the Millennial generation. I examine the cohort ownership trajectories within the United States, between 2000 and 2015, and by region and race/ethnicity. The cohort transitions capture the strongly regional and ethnic outcomes of entry to ownership, and the effects of the financial crisis. All groups have much lower rates of ownership entry than earlier cohorts. There is likely to be an adjustment of the path to ownership in the long run and the current outcomes provide evidence that those trajectories will vary by region and race. It does appear that the changing trajectory of access will contribute further to the already growing inequality in cities.

KEYWORDS:

• Cohorts
• housing markets
• families
• ethnicity
• geography

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. The rate of home ownership in England peaked at 70.9% in 2003 and has fallen to 63.6% in 2014/15 DCLG, English Housing Survey: Headline report 2014–15 (Chapter 1 figure and annex tables) Website link: https://www.gov.uk/government/statistics/english-housingsurvey-2014-to-2015-headline-report.

2. There are debates about whether ownership in and of itself is positive for economies and local communities. A recent paper examines the issues around the aspirations for ownership (O’Sullivan and Gibb 2012). The authors raise real questions about whether homeownership confers macroeconomic benefits. They question whether homeownership is in fact the appropriate policy for providing housing accommodation.

3. The debates have been extensively reviewed in a recently published piece in this journal (Ruonavaara 2017).

4. Approximately 31.5 million legal immigrants arrived in the United States between 1980 and 2014. This population is excluded from the cohort analysis. As many of these were youthful, and unlikely to initially be homeowners, their inclusion could bias the trajectories of ownership.

5. Somewhat higher ownership rates (and variable across cohorts) are reported by the Urban Institute but that data do not control for recent immigration which significantly depresses the homeownership rate of younger cohorts.

6. The Asian population is not of sufficient size at the cohort level to disaggregate the trajectory to ownership with confidence but the evidence that is available for ownership entry suggests that they are more similar to whites in their access than to other minority populations.

7. http://datacenter.kidscount.org/data/tables/107-children-in-single-parent-families.