You don’t need real estate statistics or government bureau reports to sense that first-time home ownership rates have been in the dumps for a while. St. Cloud housing figures have too few transactions month-by-month to draw many conclusions about sustained trends in home ownership here—yet it’s evident that for young adults everywhere, the glacial recovery in the economy combined with factors like student debt have made it particularly difficult for most of them to move from renting to owning a St. Cloud home.
Despite the new year’s opening burst of worrisome economic headlines, nationally, when it comes to house ownership trends, there seem to be spots of good news. One with that focus came out of Fannie Mae at year’s end, courtesy of their Housing Insights publication. It wasn’t exactly a barn-burner. The excitement level, on a scale of 1 to 10, would have weighed in at maybe a 2. But for young adults who find their personal financial outlook is a square peg when it comes to the round hole of buying a first St. Cloud home, any improvement in the outlook would be progress.
That this particular improvement was less than breathtakingly good news was signaled by the headline. It came in the form of a question: “Could the Long Decline in Young-Adult Homeownership Be Nearing an End?” Fannie asked (possibly hoping the readers would supply more information). The reason for the indecision was clarified in the article’s Summary, which stated that the researchers had prepared several projection scenarios for young-adult housing ownership. These showed that ‘strong underlying population growth trends’ demonstrate how even small improvements in those trends “could generate increases in young owner-occupants in coming years.”
In other words, if there are more young adults, there might be more young adult homeowners. Not stated was how long it took the Sherlocks on the research staff to come up with that finding.
In case this sounds silly, it’s actually not quite that bad. During the worst years of the housing bust, the number of young homeowners decreased despite the fact that their proportion of the population grew…so the projection might indicate an end to that negative momentum. That decline has in fact slowed gradually…but in the three projections made by the Census Bureau, one shows continued decline, the next a slight increase, and the third, a robust increase (twice that registered during the housing boom). For the big question: which of the three is most likely to occur, the answer is (wait for it):
“It’s difficult to predict…but stability or modest improvement in homeownership is certainly plausible.”
That might have raised the excitement level to about 3—especially here, where the St. Cloud housing picture does in fact include properties that are great fits for first time homeowners. With home loan interest rates still enabling extremely doable monthly mortgage payment numbers, even some of those young adults who think their financial square pegs can’t fit the homeownership round hole might learn otherwise. The way to find out? Call me!