Understanding Gen-X Homebuyers
The housing crash was extremely detrimental to the U.S. economy. Years later, many areas of the country are still feeling the effects. Our renowned persistence is beginning to pay off, though. People are beginning to buy and sell again, often at the best rates since the crash. The group making the biggest comeback is the very one that was hit hardest during the crash – generation X.
Why the Crash Hit Gen-X Hard
Most Gen-Xers had been homeowners for about 10 years when the housing market crashed. Ten years is the amount of time the average person will keep a home, so many of these individuals were trying to recoup their investments right before home values fell. As the crash happened, they were not only unable to sell their homes, they also had greatly diminished equity, effectively costing them multiple thousands in lost investment. Some were forced to sell their homes at rock bottom prices while others couldn’t sell at all. Those people either had to stay where they were or face foreclosure.
Making a Comeback
Fortunately, the economic turnaround has been strong. Lawrence Run, chief economist for the National Association of Realtors, explains that the total rise in home values since 2011 has been more than 41 percent. He also noted that the steady incline has gone a long way to help enough people build equity and trade up to a better home.
Gen-X homebuyers aren’t quitting. In 2014, they accounted for 28 percent of the market. That’s only 2 percent behind baby boomers, who sat at 30. It’s becoming a much closer race, which means the market will need to become more equalized rather than specialized.
The biggest problem with Gen-X and homeownership is student loans. On average, they carry $5,000 more in loans than millennials, totaling $30,000 and $25,000, respectively. This debt makes it hard for both generations to save up for down payments or home upgrades.
Everyone felt pangs from the depressed housing market to some degree, and Gen-Xers in particular will be gun-shy about jumping back into the real estate market, but better numbers mean positive changes throughout the industry. Expect more people to expand their home ownership opportunities in the current, thriving market.