The 42.5 million Generation X adults are renters, not homebuyers. They make up the age group of 25 to 34 years old, with 43.9 million following them in the 15 to 24 group. If they all bought homes at the rates the baby boomers did, 1.3 million more homes would be needed between 2014 and 2034.
But between 2004 and 2012, there was a young adult homeownership reversal of nearly 3 million. Renters increased by 1.5 million; owners decreased by 1.3 million.
Some of the reasons why Gen Xers are not buying homes are that:
- they are not forming independent households--from 2006 to 2011, the number living with parents grew from 4.7 million to 7.5 million.
- they are not getting married--the marriage rate is the lowest in 100 years.
- they are not having children, with record low birth rates at half that of the baby boomers.
- unemployment rates for that age group are high.
- credit standards are tight.
- they do not have enough savings for down payments.
- they are still carrying student debt so cannot afford homes.
- they are in jobs which will likely require them to move in the near future.
However, the outlook for this group is improving:
- Economic recovery out of the Great Recession will have the greatest effect with more full-time jobs. With greater income, then Gen Xers can pay off debts, save for home down payments and afford to marry and have families.
- With more stable jobs, career advancement will not require as much relocating.
- Credit standards will probably become more reasonable in line with those of the 1990s depending on the federal government role in mortgages.
- Unemployment rates, which were almost one point higher for the Gen Xers, have fallen to the same as for the general population. For every one percent change in the unemployment rate, the rate of those living at home with parents changes by a half percent.
According to Dr. David Crowe, a Chief Economist with the National Association of Homebuilders, "a revival in typical household formations is expected." Watch the video on how to attract these clients.