Homeownership rates in the U.S. have been on a slow decline for the last decade, but the issue has become increasingly alarming for those under 35. According to a recent Harvard study, the Millennial generation is made up overwhelmingly of those who do not own the home in which they live, with just above 30% reporting owning their home outright or holding a mortgage.

Historically, the earlier a homeowner gets into their own house, the faster they can start building equity, giving them a significant well of reserves from which to tap into if the need arises. It also helps to cut out the mortgage payment earlier in life, freeing up that money for other investments or paying down other debt.

In the U.S. (and to a similar extent in other countries), the growing number of people who are either renting long-term or are living with their parents/other relatives pose an opportunity for investors and developers, but a serious problem for other sectors of the economy. This group of non-homeowners are spending and saving less outside of rent and are suffering emotionally and socially when living with their parents.

It’s well-known that the housing market is hot in most areas of the U.S., escalating to the point where many Millennials simply cannot compete with the kind of money that a flipper or someone looking for a rental residence can. Even with relatively low interest rates, the combination of stagnating wages, reduced purchasing power, and a nationwide housing market rising too fast for potential first-time homeowners is preventing the 30% home ownership number from rising significantly.

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