Posted in Industry News
Future of Housing Looks to Minorities, Millennials and Baby Boomers
Following the rough winter most of the country experienced early this year, coupled with higher mortgage rates, the housing industry has understandably seen some setbacks recently. Last month, experts from Harvard’s Joint Center for Housing Studies (JCHS) addressed these issues in The State of the Nation’s Housing 2014 report. Builder Magazine summed up the document, which predicts millennials, minority households, baby boomers and current relaxed credit conditions will be driving forces in pushing the housing market toward a brighter and healthier future.
Currently, the age range of 24 to 35-year-olds holds the lowest rank for home ownership, according to Chris Herbert, JCHS research director. Studies and surveys show, this millennial age group wants to invest in housing, but unfortunately, due to issues like student loan debt and generally lower income, they are unable to become homeowners.
“Having young homeowners is key,” continued Herbert, “because move-up buyers can’t do their part unless they can sell their entry-level homes.”
Additionally, minorities are expected to lead the way among first-time homebuyers in the very near future. Relevant statistics show that minority households have a harder time getting mortgages and loans, especially in recent years due to tighter credit restrictions, than their white counterparts. To counterbalance this problem, the most stable type of mortgage, a 30-year-fixed rate, is coming back as the most popular, which according to the JCHS report, will help close the gap between white and minority homeowners.
Baby boomers, too, will drive the housing recovery in the coming years because, most importantly, they represent the biggest share of the population. Over the next 10 years, more than 8 million Americans will be over the age of 70, according to the latest JCHS report. And because most boomer homeowners would like to “age in place,” modifications must be made to their homes, thereby increasing work for both the housing and remodeling sectors.
Read the full article from Builder Online here.
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