The fallout from the housing crisis is still being felt today. One major casualty is the rate of homeownership in the country, which has fallen substantially. The picture is especially bleak for younger households, who comprise the bulk of first-time home buyers.
According to U.S. Census Bureau data, the biggest declines in homeownership were among households headed by those under 35 years of age. Rates for this demographic plummeted from a peak 43.6 percent in the summer of 2004 to 36.3 percent at the end of September 2012.
Meanwhile, households aged 35 to 44 experienced a decline in homeownership from 70.1 percent at the start of 2005 to 61.8 percent as of last year’s third quarter.
There are two major reasons for the decline in homeownership among younger people. First, tight lending requirements and weak labor markets made homeownership unattainable for many in the younger age brackets. Second, foreclosures caused some of these homeowners to become renters or cease to be households entirely and move in with friends or family.
Also of concern is the fact that declining homeownership rates for younger households have broad ripple effects ranging from delays in marriage and having children to reduced wealth accumulation.