Tony Koonce, 25, bought a home in Twin Falls three years ago because his parents said it was a good idea.
“Then about a year later I had a job change, and I had to figure out what to do with the house,” said Koonce, who is single.
Koonce, director of marketing for a Boise property management firm, says he’s renting out his Twin Falls home but has no desire to buy another.
“It comes down to flexibility versus stability,” he says. “As opportunities arrive, I don’t want to be bolted to the ground by an asset.”
Koonce reflects what may be a national trend. People in their 20s and 30s have made up the majority of home buyers for decades. But some economists say today’s Millennials may have cooled to the idea of homeownership because of the recession, a slow recovery, uncertainty about the future and financial burdens such as student loans. Yale economics professor Robert Shiller has said it could take a generation before that changes.
Student-loan debt is turning into “a significant drag on the housing market,” said Pierre Lapointe, a Brockhouse & Cooper Inc. strategist in Montreal, in a Bloomberg News story. “The explosion in student debt is a development that calls for a lower homeownership rate.”
Not everyone agrees.
Tim Cornwell, a partner in the San Francisco office of the Concord Group, a national real estate consulting firm, says Millennials may be delaying home buying, but most still believe in homeownership. “The industry’s getting us wrong,” said Cornwell, 31. “We’re more traditional than they think we are or we say we are. ... It would be wrong to assume that what they want is something different from what previous generations wanted.”
When it comes to settling down, Millennials want to own homes where their children can be safe and amenities like parks are nearby, he says.That means Boise and similar places with high quality of life and a low cost of living could capture younger home buyers, especially if there are jobs to support them, he said.
“At the end of the day, people are saying now is the time to buy in this generation,” he said. “We know this is the cheapest housing is going to be for our foreseeable future.”
Some home-buying data supports that view. Nationally, the age of first-time buyers slid in recent years as lower-home prices opened the market, according to the National Association of Realtors. The median age of first-time home buyers leveled off at 30 for the past four years after dropping from 32 in 2006. In Idaho, no one appears to track the ages of buyers. But 21- to 30-year-olds in Southwest Idaho garner the most home loans serviced through the Idaho Housing and Finance Association, a self-supporting organization created by the Idaho Legislature that helps low- and moderate-income buyers obtain mortgage loans. From 2010 to 2011, the number of loans to people in that age group fell 6 percent. But loans among other age groups fell even more. Most saw double-digit declines.
Low mortgage rates and good prices in the Treasure Valley are drawing some into the market.Jason Bideganeta, single and 28, closed on his new Meridian home in February. He says getting a 3.75 percent rate on his mortgage was a major motivation to build a 1,650-square-foot house with the upgrades he wanted not far from his job as a marketing director for a country club.“
I looked at it as a long-term investment,” Bideganeta said.The $135,000 house would have sold for $185,000 or more six years ago, but now he’s paying less for a mortgage than he’d pay for rent, he says.
Koonce and Bideganeta say their friends’ choices of whether to buy or rent depend on where they’re at in their lives.“I have a lot of friends recently married who are talking about buying,” Koonce said. “As far as my single friends, they want that flexibility.”