The delay of millennials into homeownership will likely affect their finances for years to come. Real estate wealth has proven to be a major contributor to the financial wealth of previous generations.
Indeed, “the most impactful contributor to consumer wealth since the great financial crisis has been growth in home equity,” says Brad Friedlander, managing partner at Angel Oak Capital Advisors. “Similarly, there has been a growing wealth gap between homeowners and renters, largely due to home equity.”
U.S. homeowners captured more than $12.7 trillion in home equity by the end of the second quarter of 2016, the highest since the end of 2006, according to the Federal Reserve.