Financial Crisis Sparks Housing Commitment Phobia?

As Alex reported 8/18/2012 on Property Source Radio. – Daily Real Estate News | TUES, AUG 14, 2012
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Some analysts suggest that the financial crisis has reshaped attitudes of younger generations similar to how the Great Depression did for generations during its aftermath.

The younger generation is most at risk for reshaped attitudes, they say. “This is a generation that is scared of commitment, wants to be light on their feet and needs to adjust to whatever happens,” Cliff Zukin, a professor of public policy and political science at Rutgers, told Bloomberg. “What once was seen as a solid investment, like a house or a car, is now seen as a ball and chain with a lot of risk to it.”

The younger generations’ current financial situation is what’s most holding them back. College graduates emerging post-recession are earning less and owing more in student loan debt nowadays. Forty percent of college graduates surveyed say that their student loan debt is the main thing that is delaying them from making major purchases, like buying a home.

The housing market has shown some positive signs lately, but the slow pace of recovery is making many younger adults hesitant, Jeff Lubell with the Center for Housing Policy told Bloomberg. Case in point, the number of first-time home buyers is shrinking while the number of renters is increasing.

But Lubell says he is concerned that the younger generations’ reluctance when it comes to purchases of assets like homes may be hurting their chances at building long-term wealth.

“What you are seeing is a delay in all the kinds of decisions that require a long-term financially stable future,” Lubell told Bloomberg. “That’s home purchases, that’s marriage and that’s having kids.”

Source: “Recession Generation Opts to Rent Not Buy Houses to Cars,” Bloomberg (Aug. 8, 2012)

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