In her Sept. 15 column, “Many life milestones are out of millennials’ reach,” the Washington Post’s Catherine Rampell by her own admission reinforced some of the negative stereotypes swirling around millennials. They hang out in their parents’ basements. They don’t buy homes. They don’t even rent. They don’t marry. Not because they don’t have dreams, but because they perceive them to be unattainable.
That assessment is true for far too many millennials. As a group they unfortunately grew up watching parents struggle during an 18-month recession, graduated into an economy with low-paying entry-level jobs if lucky, and accumulated a mountain of student debt leaving no funds for a down payment on a home.
The U.S. Census Bureau reported this summer that because of the cards dealt millennials, only 36 percent of Americans under the age of 35 own a home, down from 42 percent in 2007. That’s the lowest level since 1982.
News articles are often filled with quotes from millennials who voice a desire to get into the housing market eventually, but they simply can’t right now. At the Wisconsin Housing and Economic Development Authority (WHEDA) we’re seeing data that bucks the national trend as millennials are off the sidelines and squarely in the housing game.
In 2013, millennials comprised 77 percent of all WHEDA single family loans made statewide totaling $97.5 million. As of the end of July this year, millennials represented more than 80 percent of WHEDA loans statewide totaling $62.8 million. WHEDA is seeing the same active involvement in all parts of the state, urban, rural, and suburban. And it’s happening at a time when lenders are conducting business more conservatively.
Naturally I’m inclined to attribute this success with millennials to our fine WHEDA Single Family program. WHEDA has been the state’s housing leader for over 40 years. Prospective millennial homebuyers should strongly consider WHEDA.
I also believe WHEDA’s experience is an indication that the predicted wave of millennial homebuyers may come much sooner than later.
A study conducted by BMO Harris Bank this summer, partially in Wisconsin, indicates three-quarters of millennials plan on purchasing a home within the next five years, 39 percent within the next two years, and 15 percent in the next year. While aspiring to be a homeowner doesn’t automatically translate into credit-worthiness on a mortgage application, the growth of millions of new households across America would be a healthy elixir for our economy.
Millennials will still confront obstacles including high debt and flat wages. A report by CoreLogic suggests millennials are more educated than previous generations, and that will benefit their ability to ultimately achieve homeownership. At WHEDA, we’ve witnessed first-hand that the dream for many millennials isn’t off somewhere in the future. It’s already here.
Wyman Winston is executive director of the Wisconsin Housing and Economic Development Authority.
