Why aren't young people buying more houses?

To understand why young people are buying fewer homes, begin by asking yourself: What do you need to buy a home? We’ll start with three basics. You need a mortgage. You need income for the downpayment. And you probably need a spouse. Controlling for income, gender, and education, a married person is 23% more likely to own compared to someone who is not married, and many more couples buy a home as they are preparing to wed.

“The 1980-2000 decline in young home ownership occurred as improvements in mortgage opportunities made it easier to purchase a home,” Martin Gervais and Jonas D.M. Fisher write in their seminal paper Why Has Home Ownership Fallen Among the Young? So we can’t begin by blaming too few available mortgages. Government interventions and mortgage innovations (remember subprime lending?) should have meant more young couples buying houses. With the rising employment and earnings of women, households should have gotten richer. That, too, should have increased homeownership. It didn’t.

Instead, we can begin by blaming a shortage of couples. The decline of marriage and the increase in “household earnings risk” account for practically all of the decline in young home ownership, Gervais and Fisher conclude. So, to understand the decline of young home ownership, we have to understand the decline of marriage.