Homeownership down among young adults

Homeownership saw a slight decline this year, as only 63.5 percent of households own their home, down from 69 percent 12 years ago.

The Pew Research Center recently released an analysis that young adults are not as keen on homebuying as they once were. The Pew Center reported that homes headed by those younger than 35 is only 35.2 percent, compared to 41.2 percent in 1982, and 37.3 percent in 1994. Black households have also seen a drop in homeownership, only 41.3 percent are homeowners, compared to 42.3 percent in 1994. Lower-income households have also seen a decrease in homeownership, dropping more than 5 percent in the past decade.

While most renters (72 percent) reported wanting to own a home, there are obstacles facing them. The higher cost of homes on the market is one of the major obstacles, with some renters unable to afford the high cost. An additional main issue is leading standards. According to the Pew Center, credit standards have become increasingly more difficult. Loan applications are down, especially among some minorities.

About one-third of renters said they rent by choice, most due to finances, the lack of ability to afford a down payment, being unable to afford the home or neighborhood they desire, or wanting to pay off debts before purchasing a home.

While homeownership rates are comparable to 1994, there are some major differences. For example, the average age of the household head has increased 6 years from 45 years old to 51 years old.

Interestingly, 64 percent of Americans- across generations- reported that homeownership is not affordable for young adults. But 52 percent reported it is important to own a home in order to be considered part of the American middle class, according to the Pew Center.