Census data show that the rate of homeownership for the county’s 25- to 34-year-olds is the lowest it’s been since the Gold Rush era
For all the talk of King County’s red-hot real-estate market, here’s something that might surprise you: Young people — even those with money — are not jumping in.
Census data show that the rate of homeownership for the county’s 25- to 34-year-olds is the lowest it’s been since the Gold Rush era. Among county households headed by someone in that age group, just one out of four own their home — about the same as it was back in 1900.
It’s strange to think that in 1980 — not all that long ago — half of such households were young homeowners.
Since that time, the steepest decline in ownership occurred after the foreclosure crisis. Since 2007 — the peak of the real-estate bubble — the rate of homeownership for young adults in King County has dropped by nearly 13 percentage points. Ownership declined for those 35 and over, too, but not nearly as dramatically.
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The situation isn’t unique to King County. Homeownership among 25- to 34-year-olds has been falling across the country. But the rate of the decline here has been more than twice as fast as the national average.
Does this mean that for most millennials in King County, renting is the foreseeable future?
It seems likely for a number of reasons, the most obvious being that real estate here is expensive. That’s making it difficult for people of any age to enter the housing market, but it’s an even bigger hurdle for young people, who typically have not yet entered their peak earning years.
Another key factor: singledom. The plunge into homeownership has, customarily, gone hand in hand with the plunge into matrimony (and having two incomes instead of one certainly helps, too). But the millennial generation is putting off marriage, a national trend that is very much in evidence here. In King County, 53 percent of 25- to 34-year-olds have never been married; in 1980, it was just 27 percent.
But even among those young adults who have the traditional prerequisites for homeownership — a good income and a spouse — the rates in King County have still plummeted.
My analysis of census data shows that in 1980, about 80 percent of young, married-couple households with incomes at or above the county median owned their home. That figure remained fairly stable until the financial crisis, when it nose-dived. It now stands at just under 50 percent.
Part of the problem for many millennials — even those with high-paying jobs — is college debt. Outstanding student loans hit nearly $1.2 trillion in 2015 — a fivefold increase in the past 10 years, according to the New York Federal Reserve. Not only do those debts make it harder for young people to save for a down payment, they can hurt their chances of qualifying for a mortgage, too.
But there also has been a shift in attitudes about ownership. Homes don’t seem like the surefire investment they once did. With the foreclosure crisis barely behind us, who could blame young people for feeling wary of purchasing a home? And while renting has its drawbacks, there are advantages. Flexibility, for one; it’s easier to break a lease than sell a house. Also, millennials may be less inclined to take on the responsibilities associated with owning and maintaining a home — they’d rather be enjoying an active lifestyle than doing yard work.
But whether young folks are renting because they have to or because they want to, we’re seeing the consequences of this demographic shift in the rental market. With so many more renters, the competition for apartments has gotten much more intense — and the rents keep going up.