NEW YORK (MainStreet) – It's getting better for Millennials financially, but the housing market is getting impatient.
A Ned Davis Research report from a few months back indicated that joblessness, stagnant income and student loan debt had not only set Millennials back, but kept enough of them away from buying homes to account for 3 million homes' worth of property demand. That's 1 million more homes than the 2 million existing homes, or 4.6-month supply, that the National Association of Realtors says are in the national inventory.
According to the Census Bureau, 30.3% of Millennials ages 18 to 34 still live at home with their parents. That's more than 22 million out of 76 million Millennials, including nearly 12 million between the ages of 25 and 34. Eric Mintz, portfolio co-manager at Eagle Asset Management, notes that Millennials living at home are a huge headwind for the overall economy.
“The marriage rate has been down, but it has a lot to do with the financial well-being of the Millennial generation,” he says. “But it does appear to be on the mend and, as we work our way through the recovery, household formation should start to climb higher.”
Millennials have a whole lot of other obstacles to clear before reaching that point, however. The effective unemployment rate for Millennials, including those who've dropped out of the workforce, was 13.9% in March. Even those who are employed are having a hard time saving. They're coming out of college with average student loan debt of more than $33,000 apiece, with more graduates having $40,000 or more in student loan debt than at any other time in U.S. history. They'd like to own homes — and 43.4% of college-educated Millennials do, according to The Lending Tree — but 67.4% say they need a higher salary, 28.7% want to pay off student loans first and 25.7% say homeownership would be a possibility after they spent time and money on other things, such as traveling, investing and philanthropic missions. Besides, 44.8% have less than $5,000 in savings.