Two questions will likely come to mind when you read this column: is the housing market future really reliant upon one group of people, and who are "echo" boomers anyway?
The term echo boomers refers to the group of 17-31 year olds. They are also known as the "millennials" and according to the 2011 National Association of Realtors Profile of Home Buyers and Sellers, these younger home buyers, ages 18 to 34, make up 31 percent of all recent home purchases.
The housing crisis has caused delays for many including those in the echo boomer group, but these young people do subscribe to the American Dream of homeownership. According to the National Association of Realtors (NAR), there will be shifts in various housing trends over the next two decades based on changing demographics.
At one end of the spectrum is the 65-plus population and at the other is the echo boomers. Both of these groups will influence housing trends. An increase in the housing supply is coming from those seniors who are aging-out of their homes and moving into assisted living facilities or into extended family homes. For those seniors still living on their own, there will be the need for affordable and accessible housing as those baby boomers look to find homes that can allow them to age-in-place.
But according to Selma Hepp at NAR, it's the echo boomers that "represent a long-term opportunity" that may help to facilitate a housing market recovery. However, the tough economic times have this group struggling, which could delay home purchases. Hepp says, on the NAR website that, "Consequently, demand for rental housing is likely to climb in the near term."
However, the echo boomers are an interesting group. Number one, their size alone makes them stand out. The racially and ethnically diverse group is approximately 62 million strong and only about 55 percent Caucasian versus the baby boomer group which is 65 percent Caucasian. This group is college-educated and likely to stay single longer than previous generations.
While the echo boomers may not seem like they are purchasing homes at the rate that previous generations have, experts note that's not just because of the housing market conditions. The fact is, some of this generational group are still in high school. So they've yet to enter the home-buying marketplace.
According to some data from the American Community Survey, there are signs of significant homeownership increases among the echo boomers as compared to the baby boomers at the same age. The NAR website states that, "While 900,000 households in the millennial generation [echo boomers] own their own home, only 500,000 baby boomer households owned their own home at the same point in their lives."
Real estate industry experts say that it's likely the echo boomers will rent first and therefore the housing market will see a delay in homeownership of three to five years for this generational group, but it won't represent a long-term trend against homeownership.