According to Justin Lahart in the Wall Street Journal, one of the stranger things about the country’s current economic recovery is “…how little housing has contributed to it.” Unlike past expansions, the housing market remains “depressed.”

In 2018, a combined 5.4M new and existing homes were sold. That number is comparable to how many homes were sold in 1998 when there were 50M fewer people in the US. Do these comparable numbers indicate how severe the financial crisis was and how housing itself was at its epicenter?

Now, Millennials born from 1981-1995 are at the age to buy houses. And, there are, according to the US Census Bureau, 67.7M of these Millennials at an age to buy. However, in Q1 2019, the homeownership rate among households headed by someone under 35 was 35.4%. In 1999, that level of homeownership was 40% among households headed by someone under 35.

Why this discrepancy? The recession in 2009 hit these Millennials hard. They were just entering the workforce and the unemployment rate among workers ages 20-14 was as high as 17% in 2010. (That unemployment rate would have been higher if this demographic hadn’t continued with school and hadn’t simply stopped looking for work.) As a result of their delayed entry into the workforce, it’s taken longer for this group to develop any kind of financial wherewithal needed to buy a home plus they’ve delayed, many say due to the lack of financial wherewithal, to marry and have children, usual drivers of homeownership. Additionally, many Millennials are saddled with high levels of student loan debt to an average tune approaching $30,000.

Other factors, often not discussed, that may contribute to a lukewarm at best attitude toward homeownership among MIllennials are the reality that home prices do fall (many of their parents lost their houses) and that regulatory changes have made homeownership less enticing.

According to Michelle Meyer, an economist with Bank of America Merrill Lynch, the notion that increased homeownership helps Americans accumulate wealth and build healthy communities is not as shiny as it once was. And significantly, the 2017 tax law actually reduced incentives for homeownership. Banks too have become more risk-averse since the financial crisis…they are more eager to lend pricey mortgages to wealthier clients than to people (usually first time buyers) who seeking smaller loans for less pricey homes.

Another factor to consider is the one of preference. Millennials more prefer urban living in central cities of metros with populations of at least 500,000 than Generation X did when they were the same ages of Millennials today. And, of course, home prices in many cities are often out of reach. New York City, as an example, has only 33% homes that are owner occupied whereas 64% of homes nationally are owner occupied.

All this being said, it’s likely Millennials will buy but, according to Lahart, “…when it comes to the housing market, a Millennial home buying wave may end up being little more than a ripple.”