A sold home with millennials (Credit: Pixabay and iStock)
Over the next decade, a greater portion young Americans are poised to become homeowners.
The homeownership rate of young adults will probably rise to 58.1 percent in 2025, Bloomberg reported, citing Freddie Mac. The rate could rise as high as 60 percent in a more optimistic scenario, or 55.9 percent under a more pessimistic one.
Between 2000 and 2016, roughly 700,000 young adults chose not to buy a home because costs outpaced incomes, the report said.
“Historically low mortgage rates and increasingly favorable employment conditions should have generated a far greater number of home purchases by young adults, especially in the last five years,” said Sam Khater, Freddie Mac’s chief economist. “Unfortunately, home-price and rent growth above incomes — driven primarily by a severe shortage of housing supply — have been too high of a hurdle for many would-be buyers to clear.”
According to a previous report, the group of renters who say they don’t have enough money to become a homeowner rose from 59 percent to about 67 percent in just two years time. Meanwhile, nearly 40 million American households were cost-burdened in 2016, meaning that they spent more than 30 percent of their incomes on housing. [Bloomberg] — Meenal Vamburkar
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