The article “ Millennials Are About to Get Locked Out of the Real Estate Market-Again ” by Tully (2019) focuses on factors influencing millennials’ homeownership in the country today. Millennials refer to individuals in their thirties: There is a high demand for homes in this generation. Notably, millennials were unable to take advantage of the undervalued real estate market between 2009-2017 after the home market crash because of their poor credit attributable to students’ loan and unstable jobs. Homeownership among millennials increased from 2017 to 2018 due to the country’s expanding economy enabling millennials to secure well-paying jobs. However, the high mortgage rates coupled with rising prices of houses, which arises due to the high demand and inadequate supply of homes in the market, are a significant barrier to the attainment of millennials’ home ownership dreams (Tull, 2019). The article proposes the construction of low-cost housing and collaboration between financial institutions and builders to reduce the mortgage rate and increase homeownership rates among millennials.
Several factors make the “ Millennials Are About to Get Locked Out of the Real Estate Market-Again ” article an interesting read. Since the real estate market crash in 2007, there has been a lot of focus in tracing the industry’s recovery journey. Arguably, banks were the most significant contributors to the fall of the home market in 2007 due to the provision of cheap financing that contributed to a spike in prices (Choi et al., 2018). There have been worries that the increasing costs in the home market are a build up to another market crash. However, Tully (2019) disputes this argument by showing that banks have established an excellent credit standard to ensure loans are advanced to individuals with the financial capability to make timely payments. Besides, Tully (2019) notes that the lack of price equilibrium explains the increasing prices. However, millennials are a sizable market that can contribute to the growth of the real estate sector and financial institutions. Therefore from a personal perspective, banks and builders should join hands to help millennials realize the American dream.
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References
Choi, J. H., Zhu, J., Goodman, L., Ganesh, B., & Strochak, S. (2018). Millennial Homeownership: Why Is It So Low and How Can We Increase It.
Tully, S. (2019). Millennials Are About to Get Locked Out of the Real Estate Market—Again. Retrieved from http://fortune.com/2019/01/12/real-estate-market-millennials/
