As young people hunker down, homeownership dips
(MoneyWatch) Americans are changing their housing habits in ways that could affect the U.S. economy. Younger people are becoming less mobile and are less inclined to buy a place to live, while broader homeownership numbers are down, according to recent data from the U.S. Census Bureau.
An Associated Press analysis found that percentage of young adults who move to a new locale has hit a 50-year low. Only just over 23 percent of people ages 25 to 29 moved in the past year, down from roughly 25 percent the previous year and the lowest figure since 1963.
Why are younger adults passing on buying a home? Likely because the weak job market, stagnant wages and high levels of college loan debt are keeping them in existing apartments with roommates or living with their parents.
The homeownership rate between 2010 and 2012 was nearly 65 percent, a 1.7 percent decline from the 2007 to 2009 period, according to the Census Bureau. It is difficult to tell how much of the drop is due to young adults not purchasing homes or to other factors. The time range coincided with the economic recession, a rash of property foreclosures that followed the housing crash and a significant tightening of credit. All three factors likely contributed to people being unable to afford homes or to losing the homes that they already had.
Another finding in the Census Bureau analysis was that the median home value in the U.S. decreased between 2007 and 2012. What is surprising is that some areas weathered the decline, and a few even saw an increase in medium home values: 28 states saw a decline in median home value, but 19 states actually experienced an increase.
About two-thirds of counties with populations of between 20,000 and 65,000 had medium home values in 2010 through 2012 that were not statistically different from 2007 to 2009, and in 37 out of the 50 smallest counties, median home prices were not statistically different either.
Where the pain was felt most strongly was in the largest counties in the country, with 86 percent experiencing an average 9 percent drop in price.