Those born in the 1970s have fallen from having a 4% higher than normal homeownership rate in 2004 to a 7% lower than normal homeownership rate today.
The housing crisis hit the 1970s Balancers harder than any other generation. We call those born in the 1970s Balancers because they best represent the clear shift in the US toward more work/personal balance.See our generational definitions by clicking here. We could have called them the Foreclosure Generation.
In 2004, those born in the 1970s were 25–34 years old, forming families, and ready to buy their first home at the same time that mortgage credit was flowing freely. That year, almost 50% of 1970 Balancers owned their home—a full 5% higher homeownership rate than the average since 1981 and a whopping 11% higher homeownership rate than today’s 25–34-year-olds*. Only 39% of today’s 25–34-year-olds own their home.
Fast forward ten years to 2014, and those same 1970s Balancers are 35–44 years old. They have a 59% homeownership rate today, which is 7% below the norm for that age group and the lowest rate for 35–44-year-olds since the data became reliable in the early 1980s.
What Happens to the Other 7%?
A 7% lower than normal homeownership rate at age 35–44 has huge economic and societal implications. So does a 6% lower than normal homeownership rate at age 25–34. Will home buying activity per adult remain lower than usual? What impact will this have on the economy, particularly for all of those businesses that rely on homeownership and home transactions to drive growth? These businesses range from the obvious, like real estate agencies and title companies, to the less obvious, like furniture manufacturers and landscapers.
In our book Big Shifts Ahead: Demographic Clarity for Businesses, which is now available for preorder, Chris Porter and I took our best shot at projecting the homeownership rate for each generation by 2025, assuming the economic, mortgage underwriting, and societal shifts we deem to be most likely. The result was an overall 60.8% homeownership rate in 2025—the lowest since the mid-1950s. This will be 5.2 million more homeowners—15.9 million additional homeowners born in 1960 or later less 10.6 million older homeowners who will pass away or transition out of ownership. Therein lies the opportunity: marketing and selling to those 15.9 million new homeowners, only 2.8 million of whom will come from the Foreclosure Generation.
This chart is an excerpt from our upcoming book Big Shifts Ahead: Demographic Clarity for Businesses.
*The homeownership rate is the percentage of households who own versus rent. People who do not head a household, such as those living with their parents, are not included in the calculation. If included, today’s homeownership stats would look even lower.