Study says People still Hurting from Housing Crash, Especially Generation Xers
According to a report released last month by the real estate website Zillow, Generation X house buyers are trailing behind other generations in gaining home equity and younger millennials are catching up to them. The report, which is released biannually, tracks the home equity of more than 50 million people. The report revealed that Generation Xers, who are now 35 to 50 years old and many of which purchased homes in the 2000s, are still suffering from the effects of the housing crisis that saw home values reaching new lows in 2012. Surprisingly, Zillow researchers found that while the average Generation X homeowner owes 70 percent of the value of his or her home to the bank, the average millennial is not far behind 76 percent of home value being owed, but having had much less time to gain equity. Dowell Myers, a professor of urban planning and demography at the University of Southern California, stated the following about Generation Xers:
That left them scarred. Their credit was damaged, they lost all their equity and they were psychologically risk-averse after that. Then they had to go through five years of recession and recovery when things were really lagging in the job market.
For those who weren’t able to recover, their low home equity could have harsh consequences. Myer believes that millennials have it easier in terms of getting home equity, but a thin housing supply is a challenge for them. According to Zillow, in comparison to Gen Xers and millennials, baby boomers age 50 to 65 typically owe about 56 percent of their home’s value. The silent generation homeowners with a mortgage who are 65 and older typically owe 45 percent. The short supply of affordable homes is a challenge for everyone in the ability to purchase a home, which is apparently affecting Generation Xers the most unfortunately.