Even if you get that education, what is it that drives a decision to become a homeowner?
Most would say that they plan to buy a home when they "settle down," but what does that mean for a Millennial nowadays? This is a serious question because marriage and homeownership, perhaps the two most enduring institutions of our society, have shaped the economic fortunes of many Americans. Over the past half century, there has been an overall decline in the rate of marriage. According to government data, the share of married households has fallen from a high of 72 percent in 1960 to approximately 50 percent today.
Have Americans lost that loving feeling? Many reasons are cited for the decline in the rate of marriage, including the increase in the participation of women in the labor force and the increased level of educational attainment. Most recently, Millennials are largely prioritizing higher educational attainment over marriage. The share of young adults (aged 24 to 34) that are married has dropped from 70 percent in 1995 to 54 percent in 2014. In a recent Washington Post article, Millennials were quoted as saying they view marriage as a financial commitment and that they wouldn't feel comfortable entering this stage of their lives while carrying student loan debt and before securing steady employment. Instead, Millennials often opt for cohabitation with their partners in a rental unit.
According to analysis in our Homeownership Progress Index (HPRl}, the homeownership rate is 30 percent higher among married couples than other households. If married households are more likely to be homeowners, and marital rates are falling, how much of the decline in homeownership is due to the changing attitudes toward marriage?
Figure 3 shows the correlation between the change in the homeownership rate and the change in the rate of marriage, when all other lifestyle and demographic factors are held equal1. Because the marriage rate was increasing between 1995 and 2005 as Generation X got hitched, marriage was a net contributor to the growing overall homeownership rate, but from 2005 to 2014 the declining marriage rate alone has reduced the homeownership rate by 3.5 percentage points. This trend turned around in 2015, with marriage being a contributor to homeownership in 2015 and 2016.
Figure 3. Overcoming the Marriage Barrier
Year-Over-Year Change in Homeownership Rate(% Married)
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