By Lorraine Woellert July 17, 2014
David Stevens, chief executive officer of the Mortgage Bankers Association, has spent his career making the case for homeownership—crunching loan data, selling houses, and lobbying Congress to shore up the market in the chaos of the financial collapse. Yet one person still isn’t buying his pitch: his daughter. Sara Stevens, 27, understands that interest rates are low, rents are high, and a home can build wealth. But she also witnessed up close the worst real estate slump since the Great Depression. “The world has changed,” she says.
Six years since the financial meltdown, a psychology of uncertainty has altered the homeownership calculation for young adults. It’s more than the weight of student loans, an iffy job market, and tight credit. Even those who can buy are hesitant. The doubt is so pervasive that it’s eroded entry-level sales. In May, the share of first-time buyers fell for the third month, to 27 percent of primary home purchases, according to the National Association of Realtors (NAR). Historically, it’s been about 40 percent. “We have a younger generation that has sat on the front lines of this housing recession,” says Stevens, 57. “They’re clearly being more thoughtful about it, and they’re clearly deferring that decision.”