The millennial generation is huge and unique, very different from their parents and grandparents. One trend is making real estate professionals scratch their heads and worry a little: millennials aren't buying houses as fast as their parents did at their age.
The leading edge of the millennials, born between 1980 and 1984, are not buying homes at the rate that their parents did.
According to the Stanford Center on Longevity, homeowners for millennials is 12.5% lower than baby boomers.
Why aren't millennials not buying homes?
There are major differences between millennials and their parents.
Student loan debt - Unlike their parents, millennials are strapped with massive student loan debt. The debt carried by millennials is about 3 times than baby boomers at the same age. Combine that with the idea that the median income is actually $10,000 lower when adjusted for inflation.
A person with no degree in 1989 would have an income of $49,224, while a millennial with a degree averages only $50,272.
Every other factor, from gas prices to drug prices, are several times higher than their parents were paying with a lower income.
What does all of this mean?
Millennials are likely to not buy a home in their thirties. In fact, it seems that a larger percentage will never buy one.
For the real estate market, this might mean a long-term weakness in sales. If, for example, that 12% that hasn't bought a home continues that trend, that will mean 7 million fewer home buyers.
That will also mean 7 million fewer people with the value of their home into retirement. This might impact the Social Security and Medicare systems, assuming they still exist in 20 or 40 years.
The biggest question is how should the market respond? Millennials are buying their dream home immediately rather than growing into larger houses later. It will make sense for builders to create homes that are modern, but inexpensive. This generation will also have the highest number of online workers, people who don't commute. Building "connected communities" that offer free internet throughout the development, especially in inexpensive rural areas, will allow these folks to buy great homes that cost a lot less.
There is much that political leaders can do, such as forgive student loan debt, reduce the cost of healthcare, and make homeownership less expensive with more first-time homebuyers programs. All of this is achievable politically if there is the will.