Born in the 1970s? You Belong To The ‘Foreclosure Generation’
A new term has been coined by real estate consultant John Burns in a report published on LinkedIn on September 9. In his study of home ownership rates over the past several decades, Burns identifies those born in the 1970s as showing the biggest shift in home ownership, referring to them as the “Foreclosure Generation.”
As Burns explains, the housing crisis was hard on this generation of Americans, often referred to as “Balancers” because they represent a cultural shift toward more focus on work/life balance. In 2004, when it was easier to get approved for a mortgage, this generation was 25-34 years old and busy building families. At the time, nearly 50 percent already owned homes – a rate that was 5 percent higher than past generations at that age. However, the housing crisis hit and many were unable to sustain their lifestyles. Foreclosures were rampant among Balancers, and many have yet to regain firm financial footing.
Today, Balancers are 35-44 and showing a home ownership rate of just 59 percent, which is a full 7 percent below historic rates for this age group. In fact, it’s the lowest rate on record since industry experts began tracking ownership rates in the early 1980s.
As Burns explains, this tremendous drop in home ownership among a generation expected to maintain steady growth may have serious societal implications for businesses that rely on home purchases to fuel growth, not to mention the lasting impact on a generation of foreclosed homeowners who no longer see an American dream in their future.
Image via Flickr/scythril