All Hail the Millenial Homebuyer !

Millennials Leave the Basement to Buy Homes
This points to a rise in spending on furniture, appliances, electronics and cars that will lift earnings and power stocks.
Bloomberg, November 10, 2017

 

 

A few years ago, I wrote “The economy will one day improve, and the millennials will move out of their parents’ basements. When that happens, expect to see homeownership rates move back higher.”

That day has arrived. Millennials are forming new households, 1  moving to the suburbs, buying furnishings and SUVs. According to Zillow Group data, people aged 18 to 34 have become the largest group of homebuyers in the U.S.

This wasn’t the case just a few years ago, when the Pew Research Center did an analysis of U.S. Census Bureau data. It found that in 2012, “36% of the nation’s young adults ages 18 to 31 were living in their parents’ home. This is the highest share in at least four decades.”

The reversal of this phenomenon is an important contributor to the momentum behind the economic recovery from the credit crisis; it also is potentially significant for the next leg up in U.S. equity markets.

Have a look at the chart below showing homeownership rates. 2  It shows that the percentage of Americans who owned their own homes peaked in 2004. That was, not surprisingly, about the high point of the credit bubble.

 

Continues at: Millennials Leave the Basement to Buy Homes

 


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