Millennials to lead the housing charge?

From MarketWatch:

Why millennials should buy a home today

Sachita Kumar did something that few people her age appear to be doing in 2015: She bought a house.

“We decided that we just didn’t want to pay someone rent, so we decided to own something,” says Kumar, 26, a telecommunications consultant. She and her husband bought a townhouse in Somerset, N.J. and, unlike many Americans in their age group, they were able to afford the substantial 20% down payment. “A reason a lot of millennials don’t own is because of that,” Kumar says.

There are many practical reasons why millennials hold off on buying. Young adult employment has risen to around 7.7%, according to the Pew Research Center, up from 6.2% in 2007. Kumar has advice to those who can afford it: “You should definitely buy.”

She has a point. There are only two metro areas where renting is cheaper than buying for people aged 25 to 34, new data from real-estate website Trulia found. Renting is 5% less expensive than buying in Honolulu and 2% less expensive in San Jose, Calif., but buying is a no-brainer in 98 of 100 metro areas. It’s also 11% cheaper to buy than rent in the New York and New Jersey metro areas, where Kumar bought, and 10% cheaper in Newark, N.J. and San Diego. And it’s more than 40% cheaper to buy than rent in Houston and San Antonio, Baton Rouge and New Orleans, Syracuse, N.Y., Fort Lauderdale, Fla., and Miami, Oklahoma City, and Detroit.

Millennials have received a lot of criticism for holding back the housing market by not buying as many homes as economists (and would-be sellers) would like. Five years into the economic recovery, many continue to live at home with their parents: There were 71% of adults aged 18 to 34 (excluding full-time college students aged 18 to 24) living independently in 2007 versus just 67% in 2015, according to a recent study by the Pew Research Center. Although 74% of millennials expect to buy a home, more than half plan to wait until 2018, a separate survey last month of 6,000 millennial renters by Apartmentlist.com found.

For Americans of all ages, buying a home rather than renting is 36% cheaper nationwide, Trulia concluded. That’s the biggest difference since 2012 when it was 38% cheaper to buy than rent. For those aged between 25 and 34, it’s only 23% cheaper than renting. One caveat for all would-be buyers: Interest rates have returned to near historic lows of 3.85%, after climbing to 4% last year, but many economists expect rates to go up again within the next 12 months. An increase of 25 to 50 basis points could push mortgage rates to a range of 4.15% to 4.4%, he says, but rates would have to nearly double to about 6.5% to equalize the buy versus rent equation for potential young adult buyers.

This entry was posted in Demographics, Economics, Housing Recovery, National Real Estate. Bookmark the permalink.

61 Responses to Millennials to lead the housing charge?

  1. grim says:

    Little birdie says we may get our license from NJ to make whiskey today.

  2. anon (the good one) says:

    @elerianm:

    Good morning.

    The New York @Mets have brilliantly made it to the #WorldSeries ! Huge congratulations to the team & fans. #LetsGoMets @MLB

  3. NJT says:

    Re: FEMA (from yesterday)

    One of the questions they asked in order to verify my identity was:

    “Which of these places have you never lived”. One was a small town in Oregon! We had thought about moving there once and visited the place. Didn’t sign anything or make any offers, just looked. What are the odds?

    *An apartment in Manhattan was also a selection. I just crashed there occasionally back in the early 90s. No lease, no mail, no connection, all cash.

    And the CIA had trouble finding Osama. They should have consulted FEMA.

  4. grim says:

    That seriously underwater by county is one of the best charts I’ve ever seen published in the Ledger.

  5. A Home Buyer says:

    In before D-FENS

    Sweden sword attack: Two dead after masked attacker strikes


    A pupil and a teacher at school in Sweden have died after a masked man with a sword entered the building. Two further victims are seriously injured. The attacker was shot by police and is undergoing surgery at a nearby hospital. Eyewitnesses described chaos at the school, in the western town of Trollhattan, with hundreds of students fleeing from the building screaming.

    http://www.bbc.com/news/world-europe-34602621

  6. Libturd in the City says:

    Well it’s obvious. We need to ban all metal objects and ninja robes.

  7. Libturd in the City says:

    This place is dead today? Is everyone sleeping in post Mets?

  8. leftwing says:

    Cramming. Trying to get out to AC by noon.

    Need to make an ATM withdrawal ;)

  9. Libturd in the City says:

    Good luck Lefty.

    My string of luck has slowed. Two losses last two trips. Though still up over 100K on the year.

  10. Comrade Nom Deplume, the anon-tidote says:

    anon is a Mets fan. Well, that explains his bitterness at the world.

    And it explains why I’ll be cheering on the AL team. Not that I wouldn’t have anyway, but knowing anon is a Mets fan gives me added fervor for whoever is playing them.

  11. Comrade Nom Deplume, the anon-tidote says:

    [8] lib

    Cannot speak for others but I have been flat-out busy. Some major filings to be done.

  12. Libturd in the City says:

    Yup

  13. Ben says:

    Just about every middle class millenial I know is relegated to the following choices:

    1. A condo
    2. A tonwhome
    3. A POS Cape
    4. A rancher

  14. grim says:

    6 – Is that a picture of a Swedish police officer with an MP5 submachine gun?

    So much for the nordics being a shining star to contrast the US to.

    Their cops are more heavily armed than ours.

  15. Ragnar says:

    This musical video is dedicated to all the wilting flowers who cannot handle non-PC internet abuse. Like anon and pumpkin. “Safe Space”
    https://www.youtube.com/watch?v=-1a_rrU7ByU

  16. D-FENS says:

    Wierd. Why did CNN feel the need to mention what Sweeden’s gun laws were at the end of their article?

    http://www.cnn.com/2015/10/22/europe/sweden-sword-attack/

    Police: ‘We fired two shots’
    “We received an alarm call just after 10 o’clock that a masked man in his 20s had entered the school … carrying knife-like weapons in his hands, attacking students and adults at the school,” said police spokesman Thomas Fuxborg. “We fired two shots, one of which hit and incapacitated the man so that we could arrest him.”

    Fuxborg said officers found an injured man outside the entrance of the school and a dead man just inside.

    On the second floor, officers found two students who had been wounded in the attack, Fuxborg said.

    Police evacuated the school, authorities said.

    Trollhattan is about 420 kilometers (260 miles) west-southwest of Stockholm, the Swedish capital.

    Sweden has laws regulating gun ownership. The gunpolicy.org website, which works to prevent gun injuries, estimates that the rate of gun ownership in the country, both legal and illigal, is 31.61 firearms per 100 people. As a comparison, the number of guns per 100 people in the U.S. is reported by the site to be 101.

  17. grim says:

    There is no difference between 31 guns per 100 and 100 guns per 100.

    In both cases, it’s probably about 31 people who own guns.

    I have 4 bicycles, I suppose it makes me more of a criminal. I know guys who collect sports memorabilia, although I don’t know why you need any more than 1 baseball.

  18. Comrade Nom Deplume, the anon-tidote says:

    “Trollhattan”

    anon’s version of the City That Never Sleeps.

  19. Comrade Nom Deplume, the anon-tidote says:

    [18] grim,

    Precisely what I was thinking. Sweden is much more heavily regulated and guns are more expensive, making multiple firearm ownership more difficult for your average gun owner. Here, liberals love to point out that few people actually own guns, that it is stockpiling that accounts for the higher per capita number. So it is actually reasonable to state that roughly the same number of households in Sweden have a firearm as in the US.

    But don’t look for CNN or the gun-grabbers to actually acknowledge that.

    BTW, I agree with DFENS that it was curious that CNN put this in the story when it had no relevance, and the fact that it actually works against their agenda makes it a complete fail. Look for the last paragraph to be removed.

  20. Libturd in the City says:

    http://www.huffingtonpost.com/h-a-goodman/bernie-sanders-defeats-trump-by-a-wider-margin_b_8345156.html

    “Clinton, the Democratic front-runner and former New York senator who had some say over policy that could have impacted Trump’s vast business dealings, received donations from both him and son Donald Trump Jr. on separate occasions in 2002, 2005, 2006 and 2007, according to state and federal disclosure records.

    Trump has also been generous with the Clinton Foundation, donating at least $100,000, according to the non-profit.”

    Who do you endorse Anon?

    Hilary…right?

    Bow down before the one you serve. You’re going to get what you deserve.

  21. phoenix1 says:

    The data given does have relevance-it’s good to know how gun laws in different places could have different outcomes. Posting that data does not necessarily mean there is an agenda. Posting accurate data is what a news program should do.

    “BTW, I agree with DFENS that it was curious that CNN put this in the story when it had no relevance, and the fact that it actually works against their agenda makes it a complete fail. Look for the last paragraph to be removed.”

  22. Comrade Nom Deplume, the anon-tidote says:

    Looks like the latest edition of the Newspeak Dictionary will be ready for Christmas.

    http://www.cnn.com/2015/10/14/opinions/mcwhorter-pronouns-gender-neutral/?iid=ob_homepage_deskrecommended_pool&iref=obnetwork

    Wait, are we still allowed to say Christmas?

  23. 1987 condo says:

    #23..I am stunned we can still say Christmas.

    #21…Trudeau victory portends a North America move Left?

  24. joyce says:

    From my perspective in the towns I’m familiar with, there isn’t much of a difference between the cost of condos and single family houses. In addition, some condo associations seem to charge an exorbitant amount of maintenance fees (e.g. 400-500+ a month with very little amenities). I suppose if they’re reserve fund is being stock piled, that isn’t a terrible thing… but I doubt that ‘s the case in every association.

    Ben says:
    October 22, 2015 at 11:13 am
    Just about every middle class millenial I know is relegated to the following choices:

    1. A condo
    2. A tonwhome
    3. A POS Cape
    4. A rancher

  25. daddyo says:

    Relating to the Rent vs. Buy article – I would be curious to know the implied house price appreciation on the buy side of the data. They say the methodology assumes some, and if it’s anything like other calculators I have seen, the whole equation is VERY sensitive to to HPA, i.e. 1% change in that number can dramatically flip from rent to buy.

    I would guess they are overestimating the HPA.

  26. joyce says:

    23
    ” and even that people’s sense of their gender may not correspond to their biological sex.”

    The sense of my bank account is really north of $5MM but doesn’t correspond to reality. BofA needs to be politically correct and fix this sensitive issue.

  27. 1987 condo says:

    I self identify as a billionaire?

  28. Libturd in the City says:

    I self identify as the Pope.

  29. 1987 condo says:

    For IRS purposes I self identify much poorer

  30. Libturd in the City says:

    Well I don’t even have a salary. Just like Steve Jobs. Well, when he was living that is. Or currently for that matter. For what it’s worth, I’ve been told that the Apple Car is the rage among the angels.

  31. ccb223 says:

    Isn’t the obvious observation that if the Swedish Ninja guy had a gun he would have done a lot more damage? Not, ban the sword and ninja costume.

  32. joyce says:

    People with guns showed up and stopped the attacker.

    ccb223 says:
    October 22, 2015 at 1:26 pm
    Isn’t the obvious observation that if the Swedish Ninja guy had a gun he would have done a lot more damage? Not, ban the sword and ninja costume.

  33. ccb223 says:

    Isn’t that what’s supposed to happen? Cops with guns show up. Not idiots who would alternatively resort to Ninja swords having access to guns.

  34. The Great Pumpkin says:

    “What we have seen in the last 30 years, as most Americans know, is a massive redistribution of wealth, unfortunately it has gone in the wrong direction. From the middle class and working families to Donald Trump and his friends, the top one tenth of 1%.
    Yes, let me be clear, if we are going to make public colleges and universities tuition free, as I believe we have to, in the 21st Century, yeah, we are going to have a tax on Wall Street speculation, yes we are going ask Trump and his billionaire friends to pay more taxes… We’ll come up with a rate, but it will be a damn lot higher than it is now.”

  35. joyce says:

    What about stopping the attacker before he hurts people?

    ccb223 says:
    October 22, 2015 at 1:35 pm
    Isn’t that what’s supposed to happen?

  36. joyce says:

    Or maybe I should say… “Isn’t that what’s supposed to happen?” Yes, the cops show up too late.

  37. walking bye says:

    have to admit much easier for police to do thier job when facing a sword

  38. joyce says:

    It’s also easier for individuals to defend themselves if their sole source of protection isn’t the police.

  39. joyce says:

    (nice ROI)
    Ex-police chief in Ill. prison trying to keep six-figure pension
    State law requires a pension be taken away if an officer is convicted of a felony if it relates to work as an officer…
    The Countryside police pension board is set to meet Thursday afternoon for its board to mull the issue and, possibly, issue a decision on whether Swanson will keep his $101,000-a-year pension. The board also could delay the vote…
    His attorney wants Swanson to at least get the $139,000 that records show Swanson paid into the pension system as employee contributions before retiring from Countryside in 2009…
    (PS. he lost http://www.chicagotribune.com/news/ct-countryside-police-pension-hearing-met-20151021-story.html)

  40. grim says:

    Seems the little birdie was right.

    We’re making whiskey tomorrow.

  41. joyce says:

    Congrats

  42. Juice Box says:

    GRIM – Where are you getting the artisnal water from?

  43. 1987 condo says:

    Congrats!!

  44. Comrade Nom Deplume, Undersecretary, Ministry of Love says:

    [39] Joyce

    “It’s also easier for individuals to defend themselves if their sole source of protection isn’t the police.”

    Not in New Jersey. According to one judge who rejected a carry permit app for a friend of mine, you are not entitled to “any more self defense than the next guy.”

    BTW, officials rebutting Swedish reports (written by anon) that it was right wing terrorism. But I would not be surprised if it was either anti-immigrant or radical 1slamist.

  45. Comrade Nom Deplume, Undersecretary, Ministry of Love says:

    [22] phoenix

    CNN’s agenda is patently obvious to any unbiased observer. The irrelevance of the data point was obvious. (no guns used, not occurring in US). You have to play the Kevin Bacon game to establish any sort of connection between the two.

    Only someone with an agenda would conclude that including a completely irrelevant data point in that story was somehow relevant.

  46. Hughesrep says:

    47

    When have ever been an unbiased observer?

  47. Essex says:

    41. Wow that is amazing. But I suppose “it’s the Water” is probably not the right thing for a Jersey-based spirit.

  48. Essex says:

    Seriously though, congratulations. It’s a neat accomplishment and a terrific thing to make.

  49. Ben says:

    My favorite part of that clip was the gowanus water. I can’t understand how Brooklyn hipsters have been touting real estate near possibly the dirtiest water in the nation.

  50. Comrade Nom Deplume, living well off the carrion of the left says:

    [49] Hughes

    One can try

  51. Hughesrep says:

    Lemme know when you do.

  52. Comrade Nom Deplume, living well off the carrion of the left says:

    [54] Hughes

    Not sure you’d know it if I did

  53. The Great Pumpkin says:

    Congrats!

  54. NJCoast says:

    Congrats Grim.

  55. Fabius Maximus says:

    Grim,

    Will we see something for the holidays, or just put in our normal orders for Krupnik!

  56. Fabius Maximus says:

    Gary,

    Give me a big BenGaz! f0r old time sake as that horse is dead!

    http://www.slate.com/articles/news_and_politics/politics/2015/10/hillary_clinton_won_the_benghazi_hearing.html

    #GPO2024 the next time they have a chance!

  57. Fabius Maximus says:

    #60 Redux

    GOP2024, darn spell correct!

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