Americans optimistic about housing
In the recent American Dream Survey by real estate search giant, Trulia, Chief Economist, Dr. Jed Kolko notes that renewed optimism about housing is not without reason, but the pendulum may have swung to far as expectations do no meet the market’s reality.
The study revealed that 58 percent of Americans think prices will return to their peak within 10 years, 78 percent of renters plan to buy someday, and interest in supersized homes (3,200+ sf) nearly doubled in the last year. Dr. Kolko projects that at its current pace of recovery, the housing market will be back to pre-recession normal by 2016, as will the turnaround rate for renters waiting to become homeowners.
With this news, AG asked Trulia to separate out Millennials’ attitudes toward homeownership, because many believe that this generation is content with renting and behaving almost like nomads, but does the data support that theory?
Identifying the 18-34 age group (which has a four year overlap with Generation X, but the points remain), Trulia did see quite a bit of difference in attitudes when compared to the overall adult population.
Millennials are quite optimistic
Dr. Kolko noted that not surprisingly, Millennials are much more likely to be renters, 47 percent compared to the 32 percent for the overall adult population. Millennials are also more likely to want to own in the future, as 92 percent of Millenial renters plan to buy at some point in the future, compared with 78 percent of all renters.
“However, their perspective is shorter-term,” Dr. Kolko added, “and they’re less likely to stay in their next home for a long time. Among Millenials, 17 percent said that if they buy a home they will stay it in less than five years, compared with 11 percent of the overall adult population.”
While Millennials are more certain they’ll own a home in the future, they are also certain that they will live in that home for a shorter period of time, when compared to the overall adult population. This is good news for a sector that will be relying on new buyers to become part of the buyer pool, as existing homeowners are naturally a tad less optimistic, having seen their values drop in most metros.