Fannie Mae just released an interesting bit of research regarding millennials and homeownership. While it’s notable that the homeownership rate in the US has been declining since the peak in 2006 and 2007, Fannie Mae breaks that data out into cohorts and looks at the future demand for residential real estate. The good news is that as millennials move through the age brackets, their homeownership rate is increasing – in other words, a 25-year-old five years ago is a 30-year-old today, and while fewer 25-year-olds own today than 5 years ago, and fewer 30-year-olds own today than five years ago, that individual 30-year-old is more likely to own today than 5 years ago – for us that means demand.
And while many people will rightly point out that national statistics are not as meaningful as local statistics to DC – I should note that in the DC MSA, while prices have been strong due to low inventory, has also seen homeownership rates decline. Q216 saw a 2.4% decline year-over-year, which means in a market with about 2,255,400 total units, 54,129 more units are either out of the stock or are now rental units. The decline neither helps cure our supply shortage, nor does it help with our affordability issues.