The impact of low equity and a low inventory of properties for sale is that many people who under normal circumstances would be first-time buyers are renters. Home ownership rates have been steadily falling on an annual basis since 2004. Those former owners are now tenants. Just as the huge influx of buyers drawn by low interest rates sent home prices soaring in the middle of the last decade, the reverse has happened since the end of the recession -- demand for rental housing has outpaced supply.
The so-called affordability threshold has gotten especially steep in big cities. Five of the six counties in the U.S. with the highest share of the population under age 35 living with their parents are next to or near New York City (Nassau and Suffolk counties in New York; Passaic, Monmouth and Bergen counties in New Jersey).
The best hope for millennials is that 1) the economy continues to recover and that wages start rising consistently and 2) that home ownership rates, which finally started to rise in the second half of 2015, continue their climb. That will take some of the pressure off rents that crush so many millennial personal budgets (and those of lots of other people).
Youth may be wasted on the young, but it is beyond a doubt that this economy has been especially hard for those who came of age in the new century.
Barry Ritholtz started the Big Picture blog in 2003 and is the founder of Ritholtz Wealth Management, an asset management and financial planning firm.