Urban millennials are making today's housing gridlock worse
Hillary Hoffower | Publié le
- Millennials are playing an unintentional role in worsening the housing crisis, per a new USC study .
- Urban-based millennials have been moving less since the Great Recession, contributing to housing gridlock.
- The current crisis is keeping renters from moving, further driving down mobility rates.
- See more stories on Insider's business page .
America is still in the midst of a housing crisis , and it's not just because of record-high housing prices . It also has a lot do with a lack of millennials on the move.
US mobility has been down since the Great Recession, according to a recent study by the University of Southern California that looked at local-level mobility in US metro areas from 2010 to 2019. The study analyzed data from the American Community Survey, new housing construction records, and employment growth.
It found that mobility rates were down by one-quarter from the 2000s. Metro areas with higher concentrations of adults in their late 20s and 30s saw less moves, which the study attributed to more competition over fewer homes.
The study looked at mobility data from before the historic housing boom - and resulting affordability crisis - of 2020 and 2021, when widespread remote working unleashed a huge wave of migration . However, the unaffordable conditions facing all these pandemic migrants were a direct result of the mobility-related gridlock from the study.
"Millennials have been moving much less than earlier generations and are said to account for a substantial portion of the overall decline in moving," the study reads. A lack of regular movement among renters can lead to a housing market gridlock by intensifying competition among potential homebuyers.
This downturn in local mobility and the increasing number of young renters competing for houses amid a shrinking housing inventory, coupled with slow construction, fewer home purchases, and high housing prices, are all fueling today's housing crisis.
"The failure of home buying due to lack of existing housing stock and soaring prices is diminishing opportunities for renters," study co-author JungHo Park said in a press release . "The net effect is that would-be buyers who can't buy are clogging up the rental market, leaving fewer openings where people can move, which is adding to the housing market gridlock."
Millennials haven't had the opportunity to move
While millennials are inadvertently playing a role in housing gridlock, it's largely because of the economic situation they inherited.
Housing was largely an out-of-reach dream for millennials for years. Even before the pandemic, they were struggling to save for a down payment as they grappled with the fallout of the financial crisis and the burden of student debt. This kept them stuck in the renting game, lowering mobility rates in the process
But the generation became more financially stable with age, and millennials reached the peak age for first-time homeownership in 2020. Now, there are more millennials trying to become homeowners than there are houses available. They're competing over an real estate market already dwindling in supply thanks to a lumber scarcity, the pandemic itself, and an underbuilding of houses since the financial crisis.
There have been 20 times fewer homes built in the past decade than in any decade as far back as the 1960s, Daryl Fairweather, the chief economist at Redfin, previously told Insider . She added that was not enough homes for millennials, who are the biggest generation , to buy.
As she put it, "They're already boxed out of the housing market."
Via PakApNews