The millennial generation is inching their way into home ownership. These millennials, born from the early 1980s through the late 1990s, have largely delayed their entrance into home ownership, saddled by debt and high unemployment in the aftermath of the recession. 

But economists are getting optimistic that the millennials are emerging into home ownership. Jonathan Smoke, realtor.com®’s chief economist, said earlier this year that 2015 will mark an opportunity for younger buyers to enter the housing market, which will fuel a stronger housing recovery.

 Here are some indicators that are making economists the most optimistic:

1. Rising employment: The unemployment rate between 2007 and 2010 among millennials surged to 14 percent (the population as a whole was 9.6 percent), according to Alan MacEachin, the corporate economist for the Navy Federal Credit Union. But as of January, the millennial unemployment rate had dropped to 9.3 percent. The improvement in employment for this generation will bring rising incomes that may push more toward home ownership.

2. Moving out: More millennials are moving out of their parents’ homes and forming their own households. New household formation is back up to pre-recession levels. Household formation rates generally take three years to recover after a major drop – like seen in the recession, according to researchers at the University of Southern California Lusk Center for Real Estate in Los Angeles.

3. Low mortgage rates, greater credit availability: Millennials have said that one of the biggest challenges to home ownership is saving for a down payment. Mortgage rates are still near historical lows, which is opening the doors for some. Also, several government programs are helping to increase mortgage availability for first-time home buyers. For example, Fannie Mae and Freddie Mac are now requiring as little as 3 percent down payments for new conforming loans. The Federal Housing Administration has lowered its insurance premiums, which has helped make the loans more affordable to first-time buyers.

4. They desire to be home owners: Young adults say they want to buy. Thirty-two percent of millennials recently surveyed said they were saving for a house, according to a Bank of America/USA Today survey conducted in November. The real estate brokerage Redfin recently found in its own survey that 38 percent of millennials said they’d be willing to delay their wedding or honeymoon in order to save for a down payment on a home. What’s more, a new Goldman Sachs’ infographic shows that 93 percent of millennials say they want to own a home in the future.

Source: NAR, "Millennials on the Home Ownership Path," The New York Times (March 6, 2015)