Minorities, Millenials Play Key Role in Housing Growth
Six years since the economic downturn known as the Great Recession, the U.S. economy has slowly recovered. However, the area that caused the initial collapse, the housing market, has seen steady growth.
Playing a pivotal role in this expansion will be two groups that have grown in influence over the last decade. According to a study released by the Joint Center for Housing Studies from Harvard University, minorities and millenials will play a role in the growth of the housing economy.
By 2025, one third of U.S. households will be owned by minorities. There are currently around 122 million households but the study estimates that between 2015 and 2025 it will increase by between 11.6 million and 13.2 million. Reuters adds that the study says minorities will own 36 percent by 2025.
In 2013, minorities owned 31.6 percent of households. However, the overall increase in minority ownership has been increasing in the past decades. NBC News reports that between 1993 and 2013, the share of first-time buyers fell from 86 to 77 percent. Simultaneously, the share of Hispanic homeowners grew from four to nine percent. The "Asian/Other" category increased from two to six percent. However, another big change will be in age group.
Unlike previous generations, minorities comprise a much larger group within the millennial generation. As this group begins to buy homes, minority homeownership will correlate with millennial homeownership. The report states, "45% [of millenials] are minorities, compared with 41% of gen-Xers and 28% of baby boomers. On the strength of their numbers alone, millenials will increase the racial and ethnic diversity of US households," according to NBC News.
The recovery of the housing market remains hopeful as long as it continues its upward trajectory. The study states, however, that it has not fully recovered from the recession and minority and millennial participation in the housing economy is dependent on stable prices since both groups are of lower income.
"Ultimately, the large millennial generation will make their presence felt in the owner-occupied market," Daniel McCue, center research manager, said in a statement, "just as they already have in the rental market, where demand is strong, rents are rising, construction is robust, and property values increased by double digits for the fourth consecutive year in 2013."
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