New research from the University of Southern California and Fannie Mae confirms that Millennials are finally embracing home ownership.
The study, conducted by Patrick Simmons, director, strategic planning for the Economic & Strategic Research Group at Fannie Mae, and Dowell Myers, professor of Policy, Planning, and Demography at the Sol Price School of Public Policy at the University of Southern California, notes that traditional age-group analysis of the data suggests that Millennial home-ownership demand continues to slumber.
However, by examining the data from a cohort perspective, which disentangles current from past home-buying behaviors, the authors reveal a sharp awakening of Millennial home ownership.
Cohort analysis shows that the pace of young-adult home purchases accelerated substantially during the economic recovery and quickened further through 2016.
For every age transition above 22-23 – 24-25, the increases in cohort home-ownership rates between 2014-2016 were significantly greater than the gains registered from either 2008-2010 or 2010-2012.
Compared with the age-group approach, the cohort perspective suggests a more optimistic outlook for Millennial home ownership demand – and casts doubt on the notion that young adults have diminished preferences for buying homes.