While home ownership has reached 63.5% at the end of Q3 2016, the highest level in nearly a decade, the majority of new household formations (the number of newly occupied housing units) are primarily being driven by renters not home owners, according to an article in CNBC. However, experts believe that the variance will ultimately tilt to the side of homeowners as millennials age and shake off some of the obstacle driving them to prefer renting over owning. According to the article, some of the issues hampering millennials from owning are:
- High student debt levels;
- Constrained income growth;
- Later marriage ages and formation of a family;
- Drop in the number of homes listed for sale; and
- Lower supply of affordable homes
However, as millennials start shaking off the above aforementioned issues, they should start propelling a new wave of demand for home ownership, as 80% of millennials have expressed an interest in ultimately buying their own homes.