Once upon a time buying a home backed with a home loan was as integral to the American way of life as apple pie and baseball, however, attitudes towards home ownership have shifted thanks to the current real estate boom and bust cycles. The results of Trulia.com's January, 2011 American Dream survey indicated that 70 percent of Americans still value home ownership. That number represents a dramatic two percent decrease when compared with the 72 percent who favored the activity in August of 2010 and those opinions vary from generation to generation, with Gen Y providing the best hope for the future.
Gen Y Holding Back
Generation Y is the demographic nickname for individuals born between 1980 and the early 2000s. Approximately 80 million people comprise the segment and a majority of them are taking their own sweet time entering adulthood and the rites of passage associated with the task.
The MacArthur Research Network on Transitions to Adulthood and Public Policy conducted 500 interviews with this key demographic. Their findings indicate that the 20-somethings feel jaded by the lack luster job market. The absence of a healthy revenue stream is preventing them from aggressively transitioning into adulthood and is making them a bit fearful in regards to the debt associated with a home mortgage (Yahoo.com). 2010 Bureau of Labor Statistics have indicated that Gen Ys have experienced unemployment rates of over 15 percent, well above the year's national average of approximately 9.5 percent.
Authors Richard Settersten and Barbara Ray analyzed the survey data and their insight has led them to believe that the demographic may be pinching their pennies to their own detriment. According to the team, Gen Y is incredibly frugal and intimidated by all debt in no matter how good an investment may be. In response, the generation are purposely avoiding smart investments including college education, funding their own small businesses and buying a home courtesy of a mortgage (Yahoo.com).
Gen Y Also Optimistic
Despite the reports of Gen Y's frugality, they may be the best hope for the future of the nation's housing market. The results of Trulia's American Dream survey have indicated that Millennials (specifically those aged 18 to 34) were the least likely to be personally affected by the housing crisis. Since they were never burned, 88 percent of those surveyed said they planned on buying a home one of these days. Chances are most of them will need a homeloan to do so.
There are a myriad of factors preventing Gen Y from becoming main players in the housing market and when they finally do, they will not be looking for the McMansions favored by their forefathers. When the bracket finally makes a commitment to buying a home, they are cutting the responsibility down to size. Gen Y's housing vision was a hot topic at the National Association of Home Builders. Several panels presented the facts that Millennials "...favoring urban settings with 'walkability' and are more than happy to comprise on size to achieve that goal", Mortgage Marvel).
What About Gen X and Baby Boomers?
Since many Gen Xers (born in the late 60's to early 80s) and Baby Boomers (born during the post WW II baby boom) have experienced rocky times courtesy of the housing market, housing industry insiders are not expecting them to breath new life into the industry at large. According to Trulia, only 18 percent of those between the ages of 35 to 44 and 22 percent of those aged 45 to 54 had positive feeling about getting a mortgage and owning a home over the past six months while 26 percent of Gen Y maintained that fuzzy feeling.
