Benn Steil

Geo-Graphics

A graphical take on geoeconomic issues, with links to the news and expert commentary.

Print Print Email Email Share Share Cite Cite
Style: MLA APA Chicago Close

loading...

Housing Defriends the Facebook Generation

by the Center for Geoeconomic Studies
January 19, 2012

Change in U.S. Homeownership Rates

Many U.S. policymakers, not least at the Federal Reserve and the Treasury, continue to pin hopes for a robust economic recovery on the housing market.  They should consider that one demographic particularly badly hit by its collapse has a long memory.  That’s because they’re young.  They’ll be around for a long time, and will bear its scars financially and psychologically. As the figure shows, the change in homeownership rates from the 1996 trough in the Case-Shiller Price Index to its 2006 peak was by far the greatest among the under-30s.  Total household homeownership rates increased 3.4 percentage points over this period, to 68.8%.  For 25-29 year olds, however, the increase was a much higher 7.1 percentage points – to 41.8%.  For under-25s, it was 6.8 percentage points – to 24.8%.  The rise in homeownership among the young was particularly remarkable given the much lower base from which it started.  What effect did the housing bust have on them?  Household balance sheets among the Facebook generation were the hardest hit: between 2007 and 2009, half of those under the age of 35 lost over 25% of their wealth.  A quarter of those under 35 lost over 86% of their wealth.

Orszag: Winds of Change Blow Away College Degree
Video: Debt-Driven Doldrums or the Promise of Prosperity
Chart Book: The Economic Downturn in Historical Context
Interactive: Household Balance Sheets

Post a Comment

CFR seeks to foster civil and informed discussion of foreign policy issues. Opinions expressed on CFR blogs are solely those of the author or commenter, not of CFR, which takes no institutional positions. All comments must abide by CFR's guidelines and will be moderated prior to posting.

* Required