Below is a brief excerpt transcribed from today's edition of The Macro Show hosted by Director of Research Daryl Jones and Financials & Housing analyst Josh Steiner.

Housing: Is The Millennial Generation Starting To Buy? - steiner

Daryl Jones: Here's a subscriber question for you.

“Josh, I can't fully put this together. ‘Entry home affordability is very high and college educated millennials are strapped with college debt.' How are we still expecting them to become a large segment of buyers coming into the market? What’s the data say about how many qualified millennial buyers will be in the pipeline to buy?"

Josh Steiner: Well I’ve gone through this phenomena with our Quarterly Presentation to our Housing institutional subscribers, but this question really highlights the evolution of shared Household Formation. If you go back to 2008 and look through 2018, the first 5 years you had this unprecedented growth in shared households of about 2% annually. The most recent 5 year period however has seen that trend slow to almost about 0.3% growth.

The student loan burden and underemployment phenomena are very real, but contrary to how the media presents millennials as a generation that doesn’t want to be homeowners, in reality, they’ve just been delayed.

The data supports that conclusion and the idea is that they are about 4-5 years behind previous generations due to factors like down payments and solid footing on an employment outlook. These things have slowed millennials from getting out there and buying a home.

The wrinkle though is the changes with Fannie and Freddie. Under Federal Housing Finance Agency head Mark Calabria, low down payment loans and high debt-to-income loans will be crimped on the margin. So even though millennials are starting to trend in the right direction from a home ownership standpoint, if Calabria gets his way (which no one can stop him) it will definitely make it harder for millennials to achieve home ownership in the years to come.

Housing: Is The Millennial Generation Starting To Buy? - demographic demand