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Millennial First-Time Homebuyers and Location Choice
Abstract
We research whether Millennial first-time homebuyers are more likely to purchase homes near city centers than Generation X. We use a random sample of individual credit records data to examine first-time mortgaged homebuyers from 2000 to 2016 in the fifty largest US cities. In a logistic regression controlling for age and generation, we estimate separate age and period effects. We also control for car ownership, income, credit score, mortgage size, mortgage payment, and student debt levels. We find that the odds Millennials buy near city centers 21 percent higher than Generation X. This suggests that as Millennials purchase homes, they do not move to the suburbs at the same rate as Generation X.
... On the other hand, millennials may have residential, neighbourhood and mobility preferences that are distinctly different from previous generations Raymond et al., 2022). For example, Raymond et al. (2022) found that millennials were more likely to buy near city centres and were not moving to the suburbs at the same rate as Gen X homebuyers, even controlling for age and period effects. ...
... On the other hand, millennials may have residential, neighbourhood and mobility preferences that are distinctly different from previous generations Raymond et al., 2022). For example, Raymond et al. (2022) found that millennials were more likely to buy near city centres and were not moving to the suburbs at the same rate as Gen X homebuyers, even controlling for age and period effects. ...
In the past decade, there has been a great deal of attention paid to and speculation about the residential mobility and location decisions of millennials. Academics and practitioners alike have been trying to determine where millennials are moving and why, including whether they are leading a ‘back to the city’ movement or whether they are moving to the suburbs as previous generations did at their age. Using US Census data, this article examines the geographical population distribution of young adults in the USA in recent decades. Categorising neighbourhoods by their urban or suburban character and by their central or peripheral location, we find that millennials lived in urban areas on the heels of the Great Recession at higher rates than previous generations. However, over the decade, the millennial population gradually shifted towards suburban areas: central urban and peripheral urban neighbourhoods largely lost millennial residents from 2011 to 2021, while peripheral suburban neighbourhoods experienced substantial gains. When it comes to neighbourhood amenities (e.g. restaurants and parks), millennials largely left amenity-rich areas for neighbourhoods with fewer amenities, though these amenities grew faster in the neighbourhoods that gained millennials the most. Millennial suburbanisation seems to be associated with housing affordability and demand for larger homes, as the population shift was more pronounced in the metros that have lower housing affordability and a lower share of larger homes in their central urban neighbourhoods. The results indicate the importance of affordable and right-sized housing, complemented with neighbourhood amenities, in attracting and retaining this population group.
... Lee, 2020;Y. Lee, Lee, & Shubho, 2019;Moos & Revington, 2018;Raymond, Dill, & Lee, 2018). Walker (2015) says that north-american Millennials are creating a new trend: thanks to the generation's size and influence, they are moving to new places made just for them and by them, revitalizing smaller cities and being a driving force in the urban resurgence ("youthification", as labelled by Markus Moos -Moos et al., 2015) or opting for hybridised urban-suburb enclaves where quality of life is the driving force, prioritizing dense and walkable neighbourhood, with transit proximity, bike-commuting amenities, and other perks which aligned with these lifestyles. ...
... Walker (2015) says that north-american Millennials are creating a new trend: thanks to the generation's size and influence, they are moving to new places made just for them and by them, revitalizing smaller cities and being a driving force in the urban resurgence ("youthification", as labelled by Markus Moos -Moos et al., 2015) or opting for hybridised urban-suburb enclaves where quality of life is the driving force, prioritizing dense and walkable neighbourhood, with transit proximity, bike-commuting amenities, and other perks which aligned with these lifestyles. In fact, Millennials were more likely to net migrate into central locations and less aversive to high density at their young ages than late Boomers were in the 1980s, and purchase houses near city centres 21% more than Generation X, moving less to the suburbs as recently found respectively by Lee (2019) and Raymond et al. (2018). But Walker, as well as other researchers, also notes that it may turn out that many Millennials were not planning on settling in cities for good; they were just postponing the move to the suburbs for a few more years. ...
In recent years, references to generations have increasingly entered public discourse. Terms like Gen Z, Baby Boomers, and Millennials have become part of everyday language, starting with the viral phenomenon of "OK Boomer," which, in 2019, inadvertently brought fame to this generation. These categories have often been used to study trends linked to specific cohorts and to analyze their evolution over time.
One well-known fact about the Millennial generation in the Western world, for example, is the significant decline in car ownership and usage compared to the two preceding generations. But what is behind this decline? Is it a behavioral shift driven by voluntary choices, confirming the narrative that portrays Millennials as “more sustainable”? Or are we witnessing a temporary phenomenon influenced by other factors? The research attempts to answer these questions combining various data sources and analytical methods in an effort to provide insights on life courses and modal choice. On the other hand, it considers the territorial differences among EU clusters of countries and degrees of urbanisation. The methods include secondary analysis of EU-wide datasets with descriptive and geographic analysis and logistic regression on socio-demographic characteristics and modal choice, plus a series of focus group sessions across the Italian territory. ***************************************************************************** According with the results, it is confirmed that Millennials have less polluting habits than their predecessors: less car use/ownership, less probability of being car users independently from context/status, higher degree of urbanisation. Nonetheless, in recent years this trend is experiencing a change of direction, with a general rise in car use/ownership and declining urbanisation, with different paces and schemes amongst clusters of countries and territorial contexts. The main results suggest that i) with the improvement of their individual status and general European economic recovery, Millennials’ car use tends to rise; ii) the pace and extent of this rise is highly dependent on the regional and territorial context, with a substantial incidence of Eastern and PIIGS countries and of the ones living in suburban contexts, resulting in an overall rise in car use in Europe. ***************************************************************************** Indeed, the regression analysis, together with the qualitative study, showed that what really makes the difference in choosing or not the car as the main mode is not much the fact of belonging to a cohort, but the residential location (both urban/rural and regional cultural/economic context), and the “status” (income level; being a student). Millennials are now more urban and still in education, but in many of them persists the idea of a future in less urban areas, and/or an inevitable automobility once they are out of the student-period. ***************************************************************************** Though, the study highlights the importance of the relationship between the two cohorts, drawing attention on the peculiarities of Millennials (more formative experiences of car-less life abroad/in different cities; more pragmatic yet conflictual relationship with the car), but also on them as heirs to the Baby Boomers’ choices and systems of values and habits (suburban way of life as a legacy). The study demonstrates the power of the cohort effect (set of values, education, growing up context) in shaping car (in)dependent people; showing as well that car dependency cannot be overcome without working on places. It finally offers a scheme of car (in)dependency to guide policy actions to make both people and places less car dependent in the long term.
... Most other drivers of deferred homeownership among millennials are financially related. For example, it has been shown that millennials are significantly more likely to purchase homes closer to city centers than previous generations (Raymond, Dill, and Lee, 2018), deferring homeownership purchases due to location price premiums. Similar research suggests that renting in desirable areas is preferred to homeownership elsewhere (Pawson, Hulse, and Morris, 2017). ...
... This supports the work of Xu et al. (2015) who articulated how millennials defer the dream of homeownership. Moreover, it is aligned with evidence in Raymond, Dill, and Lee (2018) which suggests millennials rent in desired locations until they can afford to purchase. In addition to confirming previous research, the executive interviews uncovered a novel phenomenon called "owning to rent" among the millennials. ...
The residential real estate market has been segmented dichotomously into owners and renters. Given the various tenures and sub-markets of the renters, it is problematic to consider them as a homogeneous target market. Based on a thematic analysis of semi-structured interviews with 16 residential real estate executives, this paper establishes six distinct private rental target markets including: 1) hard-to-house occupants, 2) affordability renters, 3) workforce residents, 4) transitional millennials, 5) lifestyle residents, and 6) returners. This paper is unique and noteworthy as it combines the fragmented literature on private renters with insights from residential real estate executives to produce a spectrum of target markets. In addition to validating the previous literature, this paper presents new target markets and offers marketing value propositions for each of the identified groups.
... Moreover, young people's commute mode choice is also influenced by shifts in their attitudes and preferences. Young people are more aware of the negative externalities of driving, better informed about the environmental and health implications, and have a pragmatic attitude towards automobile ownership as they prefer to live closer to vibrant parts of the city (Harris, 2018;Hopkins, 2016;Puhe and Schippl, 2014;Raymond et al., 2018). At the same time, lifecycle changes such as the school-to-work transition may affect their transit use (Grimsrud and El-Geneidy's, 2013). ...
In the U.S., various anti-sprawl land use regulations have been implemented for over two decades. Previous studies primarily investigate the impacts of local land use regulations or neighborhood-level built environment attributes on travel behaviors within a narrow time frame. Through a different lens, this paper examines how various local land use regulations and transit investment, both measured at the aggregated metropolitan level, have affected people's long-term travel behaviors over a 15-year period, and how these impacts differ between younger and older age groups. This study combines a set of land use regulation indices measured at the metropolitan level in 2003 with 15 years of travel data (2005-2019) from a pooled representative sample of over 8 million workers in the 50 largest U.S. metropolitan areas. Results show several local anti-sprawl land use regulations (e.g., growth containment, adequate public facilities, and moratoria), when combined at the metropolitan level, effectively reduced driving notwithstanding their marginal effects. Government investment in public transit also significantly increased commuters' likelihood of using public transit and, carpooling, as well as increased carpool group size. Moreover, the commuting mode choices of younger workers are more responsive to transit improvements and land use regulations. Urban planners should commit to regional cooperative planning to promote effective land use regulations at the metropolitan level. Regional collaborative entities, such as metropolitan planning organizations should play a larger role in coordinating local land use planning and regulations. To reduce automobile dependency, planners should commit to improving public transit through enhanced financial assistance, harnessing land use regulations in a more targeted way, and accommodating the needs of different age cohorts.
... Characteristics of movers into gentrifying neighborhoods may also differ by type of metropolitan area and may help explain different associations between gentrification and residential mobility if foreign born or different race in-movers challenge social cohesion among original residents of gentrifying neighborhoods (Doering 2020;Gaffikin and Perry 2012). Metropolitan areas receiving younger versus older movers, or Millennials versus other generations, may find these movers more likely to settle in central city gentrifying neighborhoods versus suburban areas (Bereitschaft 2014;Raymond et al. 2022). Movers' origin locations may also differ by metropolitan type, with gentrifying neighborhoods in some metros receiving new residents from nearby suburban areas while others receive new residents from distant suburban, central city, and non-metro areas (Smith, Pride, and Schmitt-Sands 2017). ...
Gentrification research often starts with the hypothesis that gentrification causes displacement of a neighborhood’s original residents, particularly low-income and vulnerable residents. Recent research based on large-scale quantitative data suggests that the displacement effects of gentrification for low-income residents evident from case studies and qualitative data are modest at the macroscale. We use geocoded microdata from the American Community Survey to investigate the association between gentrification and residential mobility in the 2010s, the time period following the Great Recession. Our large national sample allows us to consider heterogeneity in the association between gentrification and residential mobility, investigating differential association by distinct clusters of metropolitan areas. We find a modest positive significant association between moderate and intense gentrification and residential mobility in our full national sample. The national estimates, however, mask considerable heterogeneity in the association between gentrification and residential mobility in different types of metropolitan areas. College Town and Retirement Destination metros see the largest positive association between gentrification and residential mobility, while Large Coastal and Large Southern/Midwestern metros experience a more modest positive association. We find weak or no significant association in Inland Empire/Texas Border metros. We heed a call for more investigation of heterogeneity in neighborhood processes across different contexts.
... Conversely, the other suburbs, except for the suburbs of one of the ten largest MSAs, are related to a decreased propensity to consumption demand. In contrast, Raymond et al. (2018) examine whether Millennial (those born between the early-1980s and the mid-1990s) first-time homebuyers mortgaged from 2000 to 2016 in the 50 largest U.S. cities prefer to purchase homes near city centers. The results suggest that Millennials do not move to the suburbs at the same rate as Generation X (those born between the mid-1960s and the early-1980s) when they purchase homes; instead, Millennials are 21% more likely to buy homes near city centers than Generation X. ...
For many years in the United States, there has been consistent interest in academic research and policy debate regarding household tenure choice as researchers aim to drive policy that promotes higher levels of homeownership. Despite myriad studies and debates concerning the real causes of changes in housing tenure, there is still much disagreement on the contributing factors to this phenomenon. This article offers a summary and critique of the U.S. empirical evidence on five hypotheses concerning the determinants of tenure decision: (1) income, wealth, and employment status; (2) life-cycle factors; (3) user cost, financial constraints, and economic downturn; (4) residential mobility and location; and (5) prior tenure. This study provides useful information for local and state policymakers and incorporates comprehensive empirical evidence, methodologies, and variables for tenure-choice research.
... Third, scholars, according to reports in the academic journals and popular media, note that changes in attitudes and preferences and the adoption of information and communication technologies (ICT) may play a key role in affecting millennials' choices. They observe that millennials have pragmatic attitudes towards car ownership, are more conscious of the negative externalities of driving, are more informed about environmental and public health issues, prefer closer access to vibrant parts of cities, and are more willing to substitute virtual contacts for physical trips (Couture and Handbury 2017;Delbosc and Currie 2014;Hopkins 2016;Puhe and Schippl 2014;Raymond et al. 2018;Smith and Page 2016;Taylor et al. 2014;Vij et al. 2013). Since these explanations have different implications for planning and policy, it is important to assess the contribution of various factors to current travel patterns of millennials and understand what these mean for possible changes to their travel in the near future (Delbosc and Ralph 2017;Polzin et al. 2014). ...
Millennials tend to use a variety of travel modes more often than older birth cohorts. Two potential explanations for this phenomenon prevail in the literature. According to the first explanation, millennials often choose travel multimodality at least in part because of the effects of the economic crisis, which affected young adults more severely than their older counterparts. Another explanation points to the fact that millennials may have fundamentally different preferences from those of older birth cohorts. This paper presents an examination of millennials’ travel behavior as compared to the preceding Generation X, based on a survey of 1069 California commuters. It shows that millennials adopt multimodality more often than Gen Xers, on average. However, the analysis also points to substantial heterogeneity among millennials and indicates that, perhaps contrary to expectations and the stereotype in the media, the majority of millennials are monomodal drivers in California. The paper contributes to the literature on millennials’ mobility in several ways. First, it rigorously classifies various forms of travel multimodality (on a monthly basis and distinctively taking trip purpose into account) through the analysis of a rich dataset that includes individual attitudes and preferences; second, it explores gradual changes of multimodality across age and generation; and third, it analyzes the effects of various demographic, built environment, and attitudinal attributes on the adoption of multimodality.
... Third, scholars, according to reports in the academic journals and popular media, note that changes in attitudes and preferences and the adoption of information and communication technologies (ICT) may play a key role in affecting millennials' choices. They observe that millennials have pragmatic attitudes towards car ownership, are more conscious of the negative externalities of driving, are more informed about environmental and public health issues, prefer closer access to vibrant parts of cities, and are more willing to substitute virtual contacts for physical trips (Couture & Handbury, 2017;Delbosc & Currie, 2014;Hopkins, 2016;Puhe & Schippl, 2014;Raymond, Dill, & Lee, 2018;Smith & Page, 2016;Taylor, Doherty, Parker, & Krishnamurthy, 2014;Vij, Carrel, & Walker, 2013). Since these explanations have different implications for planning and policy, it is important to assess the contribution of various factors to current travel patterns of millennials and understand what these mean for possible changes to their travel in the near future (Delbosc & Ralph, 2017;Polzin, Chu, & Godfrey, 2014). ...
Millennials tend to use a variety of travel modes more often than older birth cohorts. Two potential explanations for this phenomenon prevail in the literature. According to the first explanation, millennials often choose travel multimodality at least in part because of the effects of the economic crisis, which affected young adults more severely than their older counterparts. Another explanation points to the fact that millennials may have fundamentally different preferences from those of older birth cohorts. This paper presents an examination of millennials' travel behavior as compared to the preceding Generation X, based on a survey of 1,069 California commuters. It shows that millennials adopt multimodality more often than Gen Xers, on average. However, the analysis also points to substantial heterogeneity among millennials and indicates that, perhaps contrary to expectations and the stereotype in the media, the majority of millennials are monomodal drivers in California. The paper contributes to the literature on millennials' mobility in several ways. First, it rigorously classifies various forms of travel multimodality (on a monthly basis and distinctively taking trip purpose into account) through the analysis of a rich dataset that includes individual attitudes and preferences; second, it explores gradual changes of multimodality across age and generation; and third, it analyzes the effects of various demographic, built environment, and attitudinal attributes on the adoption of multimodality.
Several studies have shown that the travel behavior of young adults in the United States in the past two decades differed from that of prior generations. On average, recent young adults drove fewer miles, owned fewer vehicles and made use of public transit more often. A higher share of young adults also chose to live in cities. This study examines the relationship between the location decision of young adults and their travel behavior. We examine how being a young adult and other socioeconomic variables are associated with residential location decisions, and how these in turn affect vehicle ownership, mode choice and travel distance. Our analysis uses household travel survey data from the Seattle regions collected in 2006 and 2017 and employs a recursive structural equation model to examine these questions. We find that young adult households were more likely to live closer to the city center and to have fewer vehicles than older ones. Fewer young adults also chose to own vehicles in 2017 than in 2006. While young adults made more use of non-automobile modes and had fewer person miles traveled, we find that these effects were more due to their residential location and vehicle ownership decisions than due to direct preferences about mode or distance traveled. These findings suggest that significant changes would be expected in the mode use and miles traveled among young adults if their residential location or vehicle ownership preferences change significantly due to life cycle or other factors.
This paper presents a study investigating the potential market of ridesourcing services, with a focus on the attitudinal and preferential differences between Millennials and Generation Xers. Data obtained from a stated preference survey were utilized, where the respondents were asked to choose between a conventional mode (private vehicle driver, transit, or private vehicle passenger) and ridesourcing modes (exclusive ride and shared ride). Error component nested logit models were developed for Generation Xers and Millennials, respectively. Latent attitudes derived through factor analysis were incorporated into models. A wide range of attitudinal indicators, including general mobility attitudes, perceived benefits and concerns of shared mobility services, reasons for or against owning a car, reasons for ridings Autonomous Vehicles (AV), and the most desired AV features were considered to extract latent attitudes. Model results indicated distinct mode choice behavior between Millennials and Generation Xers. For Generation Xers, the choice to switch to ridesourcing was highly dependent on the perceived time and cost benefits of shared mobility. On the other hand, Millennials’ choices were more likely to be influenced by their attitudes or desire toward technology, on-demand services, and driving stress relief. Interestingly, the joy of driving showed a negative impact on Millennials' use of shared-ride services only. The findings from this study provide a more in-depth understanding of the distinct behavior of Generation Xers and Millennials toward shared mobility services, which could help develop strategies and policies to focus more effectively on the needs and concerns of individuals based on their characteristics and attitudes and help promote sustainable transportation system.
Background: Prior investigations have documented disparities in the supply side of Maryland’s Medical Marijuana program. Initially a disproportionate share of licenses to cultivate and distribute medical marijuana were awarded to Non-Hispanic White owned businesses. The state has implemented measures to ameliorate the inequity by prioritizing license awards to qualified minority owned businesses. Objectives: The objective of this study is to examine the racial and income characteristics of communities where licensed dispensaries are located. We quantify the racial and income characteristics of communities where Maryland medical cannabis dispensaries are located and explore whether Maryland medical marijuana dispensaries disproportionately locate in high-income, majority-White zip codes. Method: Using data from the Maryland Medical Cannabis Commission and the American Communities Survey, we create geocodes for each of the operating dispensaries as of December 2019. We examine the distribution of medical cannabis dispensaries by zip code level household income and zip code level racial distribution. The data set encompasses 85 operating cannabis dispensaries in Maryland and 6.1 million Marylanders distributed across 468 zip codes in 2018–2019. Results: The analysis indicates that dispensaries are concentrated in zip codes whose residents are racially diverse, and with higher concentrations of retail establishments. Conclusion: Community level racial or income disparities in access to medical cannabis were not observed in Maryland. Access to medical cannabis, based on ability to pay out of pocket for the product, may be uneven.
Americans are driving less. The changes are most pronounced among Millennials, those born in the 1980s and 1990s. Much ink has been spilled debating whether these changes in travel behavior are due to changing preferences or economic circumstances. In this paper, we use eight waves of data from the Panel Study of Income Dynamics (PSID) to examine recent changes in auto ownership among US families with a particular focus on Millennials. We find that today's young adults do own fewer cars than previous generations did when they were young. However, when we control for whether young adults have become economically independent from their parents, i.e. left the nest, we find that economically independent young adults own slightly more cars than we would expect, given their low incomes and wealth. We caution planners to temper their enthusiasm about “peak car,” as this may largely be a manifestation of economic factors that could reverse in coming years.
The rise and fall of the Millennial generation congregating in central cities is a product of life course meeting unique historical context. Three reinforcing cycles harmonized before 2010 to maximize Millennial presence, and then will harmonize in 2020 to reduce presence. In 2015, the peak Millennial birth cohort passed age 25, with smaller cohorts to follow. Job opportunity that had sharply worsened following the Great Recession is reversing, with renewed job growth opening entry positions, and with less competition from smaller cohorts. In housing, Millennials were doubled up at entry levels of their housing life cycle, blocked by older peers who were unable to turn over their apartments for better homes. With renewal of new construction and home buying, stronger vacancy chains will again stimulate outflow. The combined effect of the three reversed cycles will reduce central concentrations of young adults. Preferences may persist for urban walkability but, freed of their former constraints, preferences will now be expressed through choice from a broader range of locales. Cities and suburbs can compete for Millennials passing age 30 with walkable districts, transit, and better schools and housing.
The increases in student loan debt and delinquencies over the past few years have raised concerns about whether heavy student loan debt burdens are making it more difficult for young households to become homeowners.
In standard life-cycle models, borrowing enables young adults to smooth consumption, but for those who are indebted and face high borrowing costs, parental co-residence could serve as an alternative smoothing mechanism. Using panel data derived from credit reports, we begin by documenting an association between debt characteristics – including credit risk, delinquency and loan balances on student loans, auto loans and credit cards – and subsequent entry into, and durations in parental co-residence. We find relationships consistent with parental co-residence as a smoothing mechanism for young adults facing borrowing constraints. We then formally test the hypothesis that credit accessibility effects co-residence choice by analyzing plausibly exogenous reductions in credit card limits initiated by banks during the Great Recession. We find that young adults who experienced limit reductions were 5 percent more likely to enter co-residence, and stayed 4 percent longer in co-residence. The effects of credit limit reductions were larger for young adult borrowers who were closer to their credit limit before the reduction.
This paper documents marked changes in young Americans’ residence choices over the past fifteen years, with recent cohorts delaying homeownership and lingering much longer in parents’ households. To understand the sources and implications of this decline in independence, we estimate the contributions of local economic circumstances to the decision to live with parents or independently. Transition models, local aggregates, and state-cohort tuition patterns are used to address the likely presence of individual- and neighborhood-level unobserved heterogeneity. Employment and housing market estimates imply countervailing influences of local economic growth on co-residence. Increasing college costs, however, unambiguously favor co-residence with parents.
The sensitivity of housing demand to mortgage rates and available leverage is key to understanding the effect of monetary and macroprudential policies on the housing market. However, since there is generally no exogenous variation in these variables that is independent of confounding factors (such as economic conditions or household characteristics), it is difficult to cleanly estimate these sensitivities empirically. We circumvent these issues by designing a strategic survey in which respondents are asked for their willingness to pay (WTP) for a home comparable to their current one, under different financing scenarios. We vary mortgage rates, down payment constraints, and non-housing wealth. We find that a relaxation of down payment constraints, or an exogenous increase in non-housing wealth, has large effects on WTP, especially for relatively poorer and more credit-constrained borrowers. On the other hand, changing the mortgage rate by 2 percentage points only changes WTP by about 5 percent on average. These findings have implications for theoretical models of house price determination, as well as for policy.
By examining how student borrowers fare financially after graduation, we attempt to further the existing knowledge of the costs associated with education debt and the manageability of the typical debt burden. We compare the financial stability of individuals who have borrowed for education to similar individuals who have not. We show that, keeping education constant, more student debt is associated with higher probability of being credit constrained and greater likelihood of declaring bankruptcy, particularly for individuals who accumulate debt but do not complete a Bachelor’s degree. We find evidence that homeownership rates may also be affected by education loans. Controlling for earnings tends to strengthen these relationships, which is consistent with omitted variable bias combined with positive return to student loans.
This article reviews external and internal factors influencing homeownership decisions for millennials, that is, those who were born between the 1980s and the early 2000s. The article was written by a multistate group of land-grant university researchers to inform future research. The review of literature suggests that credit accessibility is an important external factor for millennials' homeownership. Also important are life cycle factors such as financial resources and student loans liabilities, and family decisions such as marriage and parenthood. It is anticipated that this information will enable financial advisors, educators, and policymakers to understand the challenges of homeownership for millennials and to formulate strategies to help this age cohort with their personal financial planning.
Problem, research strategy, and findings: News reports and academic articles contend that Millennials (those born in the last two decades of the 20th century) are different from earlier generations in their consumption and travel patterns. This article investigates the travel behavior of young American adults and compares the behavior of Millennials with those of previous generations using data from the 1995, 2001, and 2009 National Household Travel Surveys. The analysis uses descriptive statistics to profile trends and regression models to identify the factors associated with decreased travel by Millennials. In fact, automobility declines for all Americans between 1995 and 2009, but the drops are largest for Millennials and younger members of Generation X starting in the late 1990s. Decreases in driving are not compensated by increases in the use of other modes for travel, nor do decreased trip distances explain the downturn in automobility. Among young adults, lifestyle-related demographic shifts, including decreased employment, explain 10% to 25% of the decrease in driving; Millennial-specific factors such as changing attitudes and use of virtual mobility (online shopping, social media) explain 35% to 50% of the drop in driving; and the general dampening of travel demand that occurred across all age groups accounts for the remaining 40%.
Takeaway for practice: These changes highlight two challenges to planners and policymakers: managing increases in automobility as Millennials age and their economic fortunes improve, and developing improved planning processes that deal robustly with the uncertain future presented by Millennials who may continue to make very different travel choices than comparable people did in the past.
Studies continue to indicate that higher education is frequently a worthwhile investment for individuals and that it raises the productivity of the workforce as a whole. While the rising cost of post-secondary education has not eliminated this "college premium," it has raised new questions about how growing numbers of students can make these investments. One solution to this problem is student loans, which have come to play an increasingly important role in financing higher education. Yet, despite its importance, educational debt is not well understood. Among the reasons is that there exist few central repositories of information on the characteristics and performance of all student loans, which currently include loans made by both government and private lenders. In this paper, we bring a new data set to bear on this important issue and present a brief analysis of the historical and current levels of student debt and how those loans are performing. We also briefly discuss the implications of student loans for borrowers and the economy.
In this paper we use a large panel of individuals from Consumer Credit Panel dataset to study the timing of homeownership as a function of credit constraints and expectations of future house price. Our panel data allows us to track individuals over time and we model the transition probability of their first home purchase. We find that in MSAs with highest quartile house price growth, the median individual become homeowners earlier by 5 years in their lifecycle compared to MSAs with lowest quartile house price growth. The result suggests that the effect of expectation dominates the effect of credit constraints and high price growth leads individuals to purchase home earlier. We further study other credit/loan behaviors around first-home purchases for young and old buyers. We find that younger buyers make more adjustments in their finances after the purchase – taking out more debt/credit, and yet they do not appear to experience larger increase in delinquency than older buyers.
A deeper understanding of the credit-sorting process is essential when considering the extent to which home foreclosures are driven by price contagion or an underlying spatial pattern of mortgage quality. Adapting household location theory, we find that credit constrained households follow “drive-'til-you-qualify” behavior leading to rising credit quality with distance from the CBD while unconstrained households exhibit declining credit quality. Individual level mortgage loan-to-income data for the 100 largest MSAs show credit constrained behavior either throughout the urban area or concentrated in the suburbs. Meta analysis of the credit sorting estimates identify MSA characteristics associated with each pattern.
A primary motivation for promoting homeownership is the concept that owner-occupied housing can be an important means of wealth accumulation, particularly for those lower income and minority households that are able to purchase homes. With given data issues, however, it is difficult to assess the importance of housing and nonhousing sources of wealth accumulation. Examining this difficulty serves as the purpose of this article. The results of this analysis support public policies aimed at both increasing homeownership opportunities in general and those policies that focus on homeownership for lower income households. Even though homeownership is not a guarantee of successful wealth accumulation, household wealth generally appears to be positively affected by homeownership, a conclusion reinforced with comparisons to accumulation of nonhousing wealth. One troubling observation is that owners often make the transition back to renting and, particularly among low-income minority households, do not regain owner-occupied housing.
We document that home ownership of households with “heads” aged 25–44 years fell substantially between 1980 and 2000 and recovered only partially during the 2001–5 housing boom. The 1980–2000 decline in young home ownership occurred as improvements in mortgage opportunities seemingly made it easier to purchase a home. This article uses an equilibrium life-cycle model calibrated to micro and macro evidence to understand these developments. A trend toward marrying later mechanically lowers young home ownership after 1980. We show that the large rise in earnings risk that occurred after 1980 can easily account for the remaining decline in young home ownership.
Location efficient mortgages (LEM) programs are an increasingly popular approach to combating urban sprawl. LEMs allow families who want to live in densely-populated, transit-rich communities to obtain larger mortgages with smaller downpayments than traditional underwriting guidelines allow. LEMs are premised on the proposition that homeowners in such "location efficient" areas can safely be allowed to breach underwriting guidelines designed to prevent mortgage default because they have lower than average automobile-related transportation expenses and more income available for mortgage payments. This paper employs records of over 8,000 FHA-insured mortgages matched with data on various measures of location efficiency to test this proposition. Our results suggest that it does not hold and that LEMs—like other low-downpayment mortgage programs—will raise mortgage default rates. This cost must be weighed against any potential anti-sprawl benefits LEMs may have.
Using latent class cluster analysis, this paper investigates the spatial, social, demographic, and economic determinants of
immigrants’ joint distribution among travel time, mode choice, and departure time for work using the 2000 Census long form
data. Through a latent tree structure analysis, age, residential location, immigration stage, gender, personal income, and
race are found to be the primary determinants in the workplace commute decision-making process. By defining several relatively
homogeneous population segments, the likelihood of falling into each segment is found to differ across age groups and geography,
with different indicators affecting each group differentially. This analysis complements past studies that used regression
models to investigate socio-demographic indicators and their impact on travel behavior in two distinct ways: (a) analysis
is done by considering travel time, mode choice, and departure time for work simultaneously, and (b) heterogeneity in behavior
is accounted for using methods that identify different groups of behavior and then their determinants. Conclusively the method
here is richer than many other methods used to study the ethnically diverse population of California and shows the addition
of geographic location and latent segment identification to greatly improve our understanding of specific behaviors. It also
provides evidence that immigrants are as diverse as the non-immigrant population and transportation policies need to be defined
accordingly.
Student Loan Debt and Economic Outcomes
- Daniel Cooper
- J Wang
- Christina
- Moos Markus
The Geography of Aging: Why Millennials Are Headed to the Suburbs
- Kotkin Joel
Debt, Jobs, or Housing: What’s Keeping Millennials at Home?” FRB of New York Staff Report (700)
- Zachary Bleemer
- Brown
- Meta
- Lee
- Donghoon
- Wilbert Van Der Klaauw
Emerging Trends in Real Estate United States and Canada
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