Richard Stein – Realtor®, Douglas Elliman, GREEN, SFR, CBR, eCertified®

Local Agent, Worldwide Marketing – Douglas Elliman Real Estate formerly Prudential Douglas Elliman Real Estate

Why 400,000 Young Adults Aren’t Buying

High student loan debt is one main culprit for the lower rate of homeownership over the past decade, a new study from the Federal Reserve shows.

Why young adults aren't buying

© Fertnig – E+/Getty Images

Homeownership of all Americans has fallen 4 percentage points from its peak of 69 percent in 2005. It has dropped the most—from 45 percent to 36 percent—among those 24 to 32 years old.

“In surveys, young adults commonly report that their student loan debts are preventing them from buying a home,” Fed researchers Alvaro Mezza, Daniel Ringo, and Kamila Sommer write in the paper. “Our estimates suggest that increases in student loan debt are an important factor in explaining their lowered homeownership rates, but not the central cause of the decline.”

The Fed’s paper did not identify the other causes for the decline in the homeownership rate among younger adults. Researchers attributed about 20 percent of the drop in the rate to high student loans.

Every increase of $1,000 in debt contributed to a 1- to 2-percentage-point drop in homeownership, the study finds. Researchers note that this equates to about 400,000 people who otherwise would have expected to own homes but have not because of their student loan debt.

“This finding has implications well beyond homeownership, as credit scores impact consumers’ access to and cost of nearly all kinds of credit, including auto loans and credit cards,” the researchers noted in the report. “While investing in postsecondary education continues to yield, on average, positive and substantial returns, burdensome student loan debt levels may be lessening these benefits.”

The National Association of REALTORS® has also conducted studies showing the impact student debt is having on delaying homeownership. A 2017 NAR study found that student debt delayed homeownership by about seven years. It also had an impact on the rest of young adults’ lives, such as holding millennials back from making financial decisions and reaching personal milestones, such as changing careers, continuing their education, marrying, or even having children.

The Trending Kitchen Styles in Remodels

remodeled kitchen

© Margaret Wright Photography / Houzz

Farmhouse design continues to gain popularity in kitchen remodels, according to the 2019 Houzz Kitchen Trends Study, a survey of more than 1,300 homeowners who are planning or in the midst of a kitchen project.

Eighty-two percent of renovating homeowners this year who are changing the style of their kitchen says they’re making it farmhouse. Farmhouse now nearly ties contemporary in popularity (14 percent versus 15 percent, respectively). Transition—a mix of tradition and modern—still remains the most popular in kitchen design at 21 percent.

white kitchen

© Kimberley_Bryan / Houzz

“This year’s study illuminates a number of prominent trends in today’s kitchen,” says Nino Sitchinava, Houzz principal economist. “Engineered materials are clearly taking over natural stone in countertops and flooring. Thanks in part to the versatility of these materials, white continues to dominate the kitchen, from cabinets to countertops and walls. Finally, rapid advances in wireless and voice technology are transforming some kitchens into ‘air traffic control’ centers of the home.”

Kitchens aren’t cheap to redo and are about 10 percent more expensive this year, according to the study. The median kitchen renovation cost $11,000, while a major renovation to a large kitchen (more than 200 feet) cost $33,000.

Here are some more kitchen trends that emerged from the Houzz report:

Gray cabinets: White cabinets remain the most common (43 percent), but gray cabinets are winning over more fans. About one in ten homeowners—or 11 percent—chose gray cabinets for their kitchen. Gray cabinets are then often paired with brushed or satin nickel door hardware.

white countertops

© Rikki Snyder / Houzz

White and quartz countertops: Granite continues to decline in popularity, while engineered quartz is surpassing all of the natural stone materials combined among kitchen remodelers who updated their countertops. White counters are gaining steam, making up nearly one in every three upgraded countertops.

Mixed finishes: More than half of homeowners—54 percent—say they’ve mixed metal finishes across their fixtures and hardware. For those who mix and match, nickel is popular, but many then opt for oil-rubbed bronze or brushed or satin black finish for door hardware and lighting fixtures.

Engineered flooring: Only a quarter of remodelers who updated their flooring chose natural hardwood, marking a significant decline from recent years. Engineered flooring—such as engineered wood, vinyl, and laminate—have become nearly twice as popular in the meantime.

Appliance finish: Stainless steel may still rule, but black stainless is growing more popular as an appliance finish. It is now in one of every 10 upgraded kitchens. Read The New Kitchen Finish: Black Stainless

High-tech add-ons: More than half of upgraded faucets are high-tech, including water efficiency, no-fingerprint coating, and touch-free activation. Other high-tech features in the kitchen include wireless controls in upgraded appliances and home assistants.

Source: 

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