Is Gen X Housing’s Lost Generation?
While the nation’s housing market has mostly recovered from its 2008 crisis, many in one generation are still suffering setbacks from the crisis, according to The Wall Street Journal.
Generation Xers, those born between 1965 and the early 1980s, were hurt the most when home values dropped eight years ago, the WSJ finds.
“In 2004, people then-aged 25 to 34, the core of Generation X, had a homeownership rate of 49.5 percent, the highest for that age group since the U.S. Census Bureau started regularly collecting such data in the early 1980s,” WSJ reporter Chris Kirkham writes.
The 2015 homeownership rate for Gen Xers, now aged 35 to 44 years old, was 58.5 percent. This is seven percent lower than the average for this age range.
“Generation X experienced a much smaller increase in homeownership rates than previous generations as they hit middle age,” according to Kirkham.
One of the problems for Gen X is timing. Many Gen Xers entered typical first-time homebuyer ages as the housing market hit pre-crisis peaks. When home values plummeted, some Gen X homeowners were caught with mortgage balances that exceeded the value of their homes.
Along with evidence showing many in this generation have yet to recover from the housing crisis, the WSJ highlights the impact Gen X’s homeownership struggles may be having on the housing market.
Battle of the Generations
The WSJ finds “there are now three million more renters in their 30s and 40s today than 10 years ago, even though the number of households in that age bracket declined, according to data from the Harvard Joint Center.”
Generation X is of the age range when people typically buy their second or third homes. Instead, many in Gen X are back to square one, in a position to reenter the housing market as first-time homebuyers for the second time around, notes the WSJ.
Plus, Generation X buyers looking for their first homes may find themselves competing against older Millennials who are now aging into first-time homebuyer range.
There’s still room for optimism for Gen X, however. Evidence suggests many in Generation X are returning to homeownership. In its 2016 Home Buyers and Sellers Generational Trends Report, the National Association of REALTORS® lists Gen X as making up 26 percent of homebuyers last year.
“Gen X buyers are in their peak earning years and thus their incomes are the highest among all generations of buyer types,” the report finds.
With all the talk of Millennials and Baby Boomers, it can be easy to forget Gen X, the smaller generation sandwiched between these two demographic behemoths.
But at 83 million strong, Generation X is still a force with a role to play in America’s housing market.
Source: “Housing Bust Lingers for Generation X,” by Chris Kirkham, published in The Wall Street Journal, April 8, 2016.