Even as recently as 2005, America’s housing market had a pretty clear path:
1. Buy a home in your 20s -- ideally, from a couple who was getting ready to retire, because they had a nice family-sized house.
2. Live in aforementioned family-sized house until kids grow up and head off to college.
3. Sell the house to a couple in THEIR 20s.
4. Move to a smaller home, and use the profits from your big family-sized house as a nest egg to fund your retirement.
But thanks to the recession, that path has a giant boulder sitting in the middle of it – also known as today’s younger generation. Thanks to massive unemployment, lower starting salaries, and rising student debt loans, many of America’s 20-somethings simply don’t have the money to go out and buy houses like they did a few years ago. In fact, nearly one-third of America’s 20-somethings live at home with their parents.
But obviously, there are some young people who CAN afford to buy houses – especially these days, when home prices are low and mortgage rates have (literally) never been lower.
So, how do those people feel about buying a home?
According to a recent study by Better Homes and Gardens Real Estate, younger Americans are keeping a close eye on the housing market – from the comfort of their rented living rooms.
In fact, according to the survey, 69% of the 1,001 people 18 to 35 surveyed say they know much more about buying a home than their parents did when they were their age – and they credit the housing bust for that additional knowledge.
While they may not have experienced the housing bubble’s burst firsthand, they have seen the fallout it caused, and they are in no rush to do anything that’s going to put themselves anywhere near that kind of risk.
As a result, 69% of them say they will not buy a home until they have saved up enough money so that the purchase doesn’t impact their form of living.
Just how serious are they about counting their pennies?
Very, according to the survey.
In fact, 40% of those surveyed said they would be willing to work a second job in order to save up for a home, while 23% said they would be willing to live with Mom and Dad in order to save some cash.
But, apparently, those pennies are going to sit in the jar for awhile.
According to another study – this one conducted by the organization “Generation Opportunity” – 38% of Americans between the ages of 18 and 29 say they are putting off buying a home until the economy improves.
And, unfortunately, that could take even longer for people in that age group. That’s because, according to the U.S. Census, the median net worth of people under 35 dropped 37% between 2005 and 2010. That’s the biggest decrease for that time period out of any age group in the country.
When you consider how people in that age group were doing 25 years ago – back when tons of 20-somethings were buying homes – the difference is even greater. Today’s younger Americans have 68% less net worth than they did back then.
So, if you’re trying to sell your home today, focus on the people who are buying – no matter how old they may be – instead of the boulder that’s sitting in the middle of the conventional path.
This article is brought to you exclusively by RealtyPin.com