Economist Robert Shiller, who predicted the bust of the housing bubble in 2003 and was co-creator of the Standard & Poor’s Case-Shiller home price index, has said that there may be no market rebound for housing for a generation or more. What does this mean for home ownership going forward. Will millennials be able to take advantage of depressed prices in homes today, or will they remain renters and remain skeptical of housing in general?
Shiller was brief but blunt when he said that, “I worry that we might not see a really major turnaround in our lifetimes.” This is a very stark view of the mess that the housing market is in today. But is Shiller right? Could housing be stuck in a rut for an extended period of time going forward? That may depend on my own generation, the millennials.
Historically, as people start to go into their 30s, the first major purchase made is a house. Today, millennials are just starting to reach the age where a house purchase is on the to do list, but something is happening. Due to rising student debt costs and troubles with unemployment, house purchases have been put on the back burner. Some are wondering if millennials are going to be a generation of perpetual renters and never seek to own a house.
Some millennials themselves are speaking out on the issue and are pointing out that it is perfectly fine to not own a house, but instead to rent one. While I agree that when you are in your 20s this is perfectly fine and normal, but as millennials get married and begin to start their own families I believe that attitude will change. Owning a home is something that has become ingrained as necessary in our culture. It is the foundation of the American dream that so many wish to have.
Once those attitudes change as millennials begin to enter their 30s I believe the housing market will pick up again. Considering that this is already starting to happen with the oldest millennials alive today, I believe it is only a matter of a couple of years before we see a rebound in the market, not the “generation or more” that Shiller believes could be the case.
What do you think? Will millennials change their attitude as they reach their 30s and start their families when it comes to housing, or will they continue to rent and become perpetual renters for most of their lives?