Dr. Raphael Bostic has the longest title I’ve ever seen for one person.
Bostic is the Judith and John Bedrosian Chair in Governance and the Public Enterprise at the Sol Price School of Public Policy at the University of Southern California.
He is also an economist who believes the slow housing market is a psychological phenomenon, or that there is a mental aspect as well as economic reason for the housing economy to be stuck on “slow.”
Here’s Bostic’s call at the Bipartisan Policy Center 2014 Housing Summit:
“[Home] ownership doesn’t buy [millennials] very much right now. They want to innovate and create right now. My guess is when they start pairing up, they’re going to want a house all of their own. This economy will continue to grow.”
According to the latest research from Pew Research Group, Bostic is 100% correct, in that record levels of Americans are NOT yet married.
The above chart shows where we are right now and, strangely, it provides a glimmer of hope for the housing economy.
“After decades of declining marriage rates and changes in family structure, the share of American adults who have never been married is at an historic high,” Kim Parker and Wendy Wang write in the new study.
The good news is that we don’t have to wait around for couples to begin to link together in matrimony. According to the Pew report, we may be moving in the right direction already. That's because the number of people who WANT to one day get married is still pretty high.
"[M]ost Americans (68%) continue to believe it is important for couples to marry if they plan to spend the rest of their lives together," the authors write. "Roughly half of all adults (47%) believe that this is very important, and an additional 21% consider it somewhat important."
Plus, many of them are already living together.
This quote is located at the bottom of the study, under Box 1:
"Many never-married young adults are not “single.” According to Pew Research analysis of the March 2013 Current Population Survey, about 24% of never-married Americans ages 25 to 34 currently live with a partner. According to data from the National Center for Health Statistics, among women who first cohabited at age 25 to 29, their premarital cohabitation relationship typically lasted about a year and a half (17 months). Research finds that after one year, about three-in-ten young adults get married, 9% break up the relationship and 62% continue cohabiting. By the third year, nearly six-in-ten (58%) married, 19% broke up and 23% remained in the relationship."
Right now, millennials aren’t into owning homes. So, it’s the second portion of Bostic’s above comment that is yet to be proven.
If his hunch is correct, and I hope it is, millennials will eventually pair up, evidenced by the Pew research. But whether they’ll prefer to rent or to buy remains the big question.
Let’s hope Bostic is 100% correct about them choosing homeownership.