Thomas Piketty1 360x1000
399
1albion
6albion
Margaret Fuller3 360x1000
5albion
3theleastofus
2lafayette
11632
Susie King Taylor 360x1000
1lookingforthegoodwar
199
storyparadox3
5confidencegames
Samuel Johnson 360x1000
Thomas Piketty3 360x1000
1paradide
2paradise
1defense
George F Wil...360x1000
3confidencegames
4confidencegames
2confidencegames
Maurice B Foley 360x1000
11albion
Storyparadox1
1gucci
1jesusandjohnwayne
Margaret Fuller2 360x1000
Edmund Burke 360x1000
Betty Friedan 360x1000
9albion
Margaret Fuller 360x1000
Susie King Taylor2 360x1000
1lauber
499
1falsewitness
1theleasofus
George M Cohan and Lerarned Hand 360x1000
Stormy Daniels 360x1000
Gilgamesh 360x1000
7albion
Anthony McCann1 360x1000
Margaret Fuller 2 360x1000
Adam Gopnik 360x1000
1lafayette
Thomas Piketty2 360x1000
10abion
12albion
Ruth Bader Ginsburg 360x1000
14albion
LillianFaderman
3defense
1trap
6confidencegames
2jesusandjohnwayne
Margaret Fuller1 360x1000
Lafayette and Jefferson 360x1000
2gucci
Office of Chief Counsel 360x1000
lifeinmiddlemarch2
Anthony McCann2 360x1000
1madoff
storyparadox2
7confidencegames
2falsewitness
Mary Ann Evans 360x1000
Brendan Beehan 360x1000
Tad Friend 360x1000
2lookingforthegoodwar
13albion
3albion
Maria Popova 360x1000
1confidencegames
8albion'
Learned Hand 360x1000
299
Margaret Fuller4 360x1000
4albion
Mark V Holmes 360x1000
2transadentilist
3paradise
lifeinmiddlemarch1
1transcendentalist
1empireofpain
Richard Posner 360x1000
2theleastofus
AlexRosenberg
2albion
Spottswood William Robinson 360x1000
Margaret Fuller5 360x1000
2defense
James Gould Cozzens 360x1000
2trap
Originally Published on forbes.com on March 7th, 2012

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Here is another guest post fromTim Smith who writes about echo boomers (also known as Millenials and Gen Y), Americans born from 1980 – 1995.  He has previously appeared here with pieces on how business can connect with echo boomers and their attitudes towardhomeownership and education.
As gas prices approach $4 a gallon again, some may wonder if we’ll see another decline in the housing market.  The largest future consumers of housing will be Generation Y, a massive generation of 80 plus million members.  While Millennials may seem to be the next real estate opportunity, $4 a gallon gasoline will create a major encumbrance for this generation.
As I noted in a previous article on Forbes, regarding Millennial attitudes toward housing, “The lack of assets isn’t the only encumbrance to housing: Echo Boomers value education, people and leisure more than other American generations.”  The first major obstacle of housing demand, especially with rising gas prices, from these consumers is their light wallets– a year ago, 90% had fewer than $1500 in wealth.  Even with an improvement in employment prospects for Generation Y, they still are seeing shrinking wages.  How can a demographic save for a home when they face dismal employment prospects and see their wages shrink?  They can’t.  Now consider what this same demographic will do if they are seeing a major expense (gasoline) rise?
When people plan to buy a home, many look at their current and future expenses.  If a major expense, such as gasoline , is rising, they may delay any big purchase – such as a down payment on a home.  Customers, of all ages, did this while I worked for Wells Fargo.  They asserted that major expenses were delayed as they saw current expenses rising (psychologists might call this expectations adjustment).
Another obstacle that is growing with high gasoline prices to the housing demand increasing from Millennials is the growing education bubble.  As Millennials put more and more money into education, they aren’t experiencing the results in their wallets.  Not only are they seeing declining wages (even if they’re educated), but many of them have majorstudent loan debts that cannot be eliminated in bankruptcy.  This means that as Millennials see higher gas prices at the pump, they still will be forced to pay off their student loan balances, as that is a fixed expense.
Of course, some of these Millennials may decide to not repay theirstudent loans.  But by doing so, they remove themselves from the world of credit – meaning that in terms of buying a home, they’ll have to pay cash.
With the costs of gas and education rising, along with healthcare and shrinking wages, Millennials face a dismal economic outlook.  After working with customers of all ages who were planning to buy a home, one correlation was almost always one: people buy homes when they expect their financial future to be brighter.  Hopefully, for those in the housing industry, Millennials aren’t depressed about high gas prices.

 

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