A recent report from The Joint centre for Housing Studies at Harvard University has found that along with new predictions of housing recovery, there is additional proof that the echo boomers — those born between the late 70s and the early 90s and totaling approximately 62 million — will drive the housing market in the years to come.
Although an average of about 2 million more adults between the ages of 25 and 34 live with their parents today compared to less than 10 years ago, the late-2011 Fannie Mae Housing Survey shows that this age group is no less interested in pursuing homeownership. In fact, 86 per cent polled expressed a strong belief that they would ultimately own a home and almost 70 per cent polled felt that now was an ideal time to buy a home.
According to the National Association of Realtors, about 31 per cent of echo boomers have already made recent home purchases and with about 5 million echo boomers turning 21 every year, they are considered to be a significant driver of the housing market in the coming years.
In a new article from the US News and World Report, Chief Economist of the National Association of Realtors Lawrence Yun is quoted as saying, “I expect the US economy and the unemployment rate to return back to historical norms within a few years and the thing with student debt loads is that as long as people have jobs, they can pay that off, so it’s really about the job creation.”
Recently, National Association of Realtors economist Selma Hepp also presented findings that the demand for affordable housing is only expected to increase as the 65+ population grows in the upcoming years and slowly moves into alternative forms of housing such as assisted living facilities.
Although Hepp explained that echo boomers are currently struggling in an economic crisis and have mostly chosen to rent or live with parents rather than buying their first home, Glenn E. Crenlin from the Runstad centre for Real Estate Studies points out that there is already a significant increase in the number of homeowners within our present generation compared to baby boomers at the same age. While there are currently 900,000 households made up of those from echo boomer homeowners, only 500,000 baby boomers owned homes at the same point in their lives.
These are all positive signs that the housing market can expect to see a growing number of echo boomer homeowners in the future. Market and real estate commentator KCM explains that the entrance of the echo boomers into adulthood is expected to support and additional 1.0 million new households per year over the next decade.
Charlie Young, President and CEO of ERA Real Estate sums it up well when he says, “Homeownership is a key part of America’s social fabric and will continue to be. Not many people grow up to say, ‘I want to rent my home.’ I don’t expect over the long haul there to be any substantial change in buying patterns.”
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