The prospect for future home ownership demand is looking hopeful even though young American buyers continue to delay marriage and family formation
The prospect for future home ownership demand is looking hopeful even though young American buyers continue to delay marriage and family formation.
According to First American Financial’s Homeownership Progress Index, nationally potential homeownership demand slipped 0.4% in 2016 compared to a year earlier. This was based on changes in the underlying lifestyle societal and economic data.
“Even as Millennials continued to delay marriage and family formation and pursue higher education levels, the Homeownership Progress Index only declined moderately from 2015 to 2016,” said Mark Fleming, chief economist at First American “Yet, the prospect for future homeownership demand looks hopeful, as more households increase their educational attainment level and thus their prospect for higher income.”
Potential home ownership demand was increased by income growth of 0.02% and rising educational attainment of 0.06%, but declined by a drop in the share of married households (down 0.07%) and the number of children in the household (down 0.16%).
The five states with the greatest year-over-year increase in potential homeownership demand are: Nevada (+2.1%), Louisiana (+1.5%), Kentucky (+1.4%), Idaho (+1.4%) and Ohio (+0.8%).
The five states with the greatest year-over-year decrease in potential homeownership demand are: Delaware (-3.3%), Maryland (-2.3%), Oregon (-2.3%), Rhode Island (-2.2%) and Alabama (-2.2%).
“Small changes in potential homeownership demand hide the large amount of variation in markets across the country. The underlying factors that the Homeownership Progress Index accounts for can vary substantially by region of the country and market. Regions or markets with stronger local economies and that can attract increasingly educated Millennial households will have stronger homeownership demand in the future,” said Fleming.
According to First American Financial’s Homeownership Progress Index, nationally potential homeownership demand slipped 0.4% in 2016 compared to a year earlier. This was based on changes in the underlying lifestyle societal and economic data.
“Even as Millennials continued to delay marriage and family formation and pursue higher education levels, the Homeownership Progress Index only declined moderately from 2015 to 2016,” said Mark Fleming, chief economist at First American “Yet, the prospect for future homeownership demand looks hopeful, as more households increase their educational attainment level and thus their prospect for higher income.”
Potential home ownership demand was increased by income growth of 0.02% and rising educational attainment of 0.06%, but declined by a drop in the share of married households (down 0.07%) and the number of children in the household (down 0.16%).
The five states with the greatest year-over-year increase in potential homeownership demand are: Nevada (+2.1%), Louisiana (+1.5%), Kentucky (+1.4%), Idaho (+1.4%) and Ohio (+0.8%).
The five states with the greatest year-over-year decrease in potential homeownership demand are: Delaware (-3.3%), Maryland (-2.3%), Oregon (-2.3%), Rhode Island (-2.2%) and Alabama (-2.2%).
“Small changes in potential homeownership demand hide the large amount of variation in markets across the country. The underlying factors that the Homeownership Progress Index accounts for can vary substantially by region of the country and market. Regions or markets with stronger local economies and that can attract increasingly educated Millennial households will have stronger homeownership demand in the future,” said Fleming.
