The market for Vero Beach homes as well as the nationwide real estate home buying market has often placed the blame on recent drops in the number of homebuyers on the Millennials. A new study now shows that Generation X should shoulder part of the responsibility as well.
The rate of homeownership in the U.S. has consistently fallen each year since 2005. New evidence shows that Gen Xers are part of the decline. Owning a home among the age group 35-54 has declined more than any other age group for the past 22 years.
Fewer Gen Xers and Millennials Buying Vero Beach Homes
Harvard University’s State of the Nation’s Housing 2015 report reveals homeownership among those aged 35-54 has dropped the most of any other age group since 1993, especially those under age 44.
Daniel McCue, senior research associate at The Joint Center for Housing Study of Harvard University said, "The market peaked right when they were at peak first-time buying age.”
The generation’s older members were particularly unlucky because when they were at the age where most people tend to trade up to larger homes, the housing crisis occurred. "They were subject to the decline in home prices, which made [some homes] subject to distress, underwater and delinquency," McCue said.
The current homeownership rate of 63.7% has been buoyed in large measure by Baby Boomers. This trend seems unlikely to continue for the Gen Xers due to their smaller population. When we look at Millennials, their homeownership rates are low … they have a much higher chance of building careers and catching up, but for those aged 35-44 it's more of a question.
Generation X, which the Harvard study defined as people born from 1965-1984, occupy an important place in today’s housing market. As they trade up to larger, more affluent homes, inventory becomes available for new first-time purchasers of Vero Beach homes.
However, the study finds, such is not the case. The number of homeowners aged 35-39 has dropped 23% from 10 years ago.
Gen Xers seem to be staying put in the rental market longer than before. The normal cycle of renting and moving onto homeownership and making room for younger renters to follow isn't happening as quickly.
Furthermore, it appears they may not become buyers of Vero Beach homes any time soon since greater rental demand has pushed rent to new highs, making it harder for them to save money for a sufficient down payment.
In addition, the lack of job and wage growth continues to make ownership of Vero Beach homes a challenge to most and a fiscal hardship to many. In households aged 35-44 incomes are at mid-1980s levels and for people aged 45-54 incomes are at the lowest levels since the late 1960s.
Experts say repercussions and scars from the recent housing crisis have made prospective buyers hesitant to buy. However, Gen Xers could participate in owning Vero Beach homes as those who lost their homes through foreclosures or short sales return to the home buying market.
Of the 11 million homeowners who lost homes to foreclosures during the housing crisis, only about 2 million have returned to the home buying market. It is expected that the market will see a gradual return of the remaining 8-9 million as they convert from paying rent to owning again, but industry experts warn it may take some time to fully realize the gain.
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