Demographics

The Subprime Generation

Chris_Porter_web

Chris Porter

January 23, 2014

Talk about an amazing reversal of fortune! This may be the most amazing, underreported demographic fact today.

  • 30-34 year olds in 2012 had the lowest homeownership rate of any similarly aged group before them!
 
  • Five years prior, this exact same group had the highest homeownership rate at 25-29 years old than any group before them!
 

Using homeownership-by-age data from the Census Bureau, we compared households by years of birth to examine how homeownership changes over consumers’ lifetimes.

  • Lowest ever in 2012: 30-34 year-olds in 2012 (born between 1978 and 1982) had a 47.9% homeownership rate. This is a full 6.5 percentage points lower than those five years older had achieved at the same age and lower than any group before them! (This is based on data available beginning with those born in 1948.
 
  • Highest ever 5 years prior: Those same 30-34 year-olds had a 40.5% homeownership rate 5 years prior when they were 25-29 years old in 2007. This is 6.2 percentage points higher than 25-29 year-olds in 2012 and higher than any 5-year cohort before them.
 

Our consulting team has been pointing out a real dearth of entry-level buyers over the last several years, which is counterintuitive when you consider that this has been the most affordable time in generations to buy a home. What we learned is that a huge percentage of households bought a home earlier than usual, and that same group has gone through more foreclosures than any generation before them.

What does this mean? It is more difficult than usual to sell entry-level homes today, but the pent-up demand for entry-level housing is huge. Stay tuned as we continue to unearth the future of housing for the Subprime Generation.

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About The Author

Chris Porter
Senior Vice President, Chief Demographer
Chris brings clarity to JBREC’s clients on demographic trends and translates their impact on local housing markets. He also analyzes and compares local housing market metrics in JBREC’s Metro Analysis and Forecast and Regional Analysis and Forecast monthly reports.

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