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56 | M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Gen Zers to Surpass Millennials in Homeownership Youngest generation to have a more favorable market in 15 years. T he Zillow Home Price Expectations Survey revealed that, 15 years from now, Gen Z will find a much more favorable market as they age when com- pared to millennials. Millenials at the peak of the generation curve will be turning 40 in 2020, lived through a 10-year period of turmoil and strain in the housing market. From having to plod through the slow recovery from the Great Recession to navigating the effects of the affordability issues raised by the rising home values during that season, the homeownership rate within this age bracket declined. Zillow states the homeownership for those between 35 and 44-years-old fell from 66% to 60% since 2009. Additionally, panelists agreed that the homeownership rate among Gen Z homebuyers will increase by 2035 when the oldest Gen Z members will turn 40. Thirty-five percent of those surveyed said the homeownership rate of those currently aged between 35 and 44 will be lower by 2035. America's homeownership rate has climbed to 64.8%, bringing it up to par with recent years' peaks. However, the market is still a far cry from its heydey, when homeowner rates reached nearly 70% in 2004. The reasons given by experts for why millenials had such a hard time taking the leap to homeownership, thus opting for continuing to rent, came down to numerous factors. Some of the major issues facing millennials are record levels of student loan debt and the lack of down payment assistance from parents who were unable to help since their own home equity had been highly impacted by value erosion. These factors—the preference to own instead of rent and student loan burdens—will remain key elements in shifting the tides of the coming homeownership rate trends, according to experts, yet there is still no consensus among them as to which way the tides will flow. A majority of the panelists did predict that home values will grow 2.8% in the coming year, which is a much more optimistic outlook compared with the 2.5% expected growth for 2020 that was predicted from last year's survey. Recession Indicators on the Decline Chances of a recession fell to 42%, according to a report. T he likelihood of a recession in the near future is on the decline and is likely to drop further as the year ends, accord- ing to the latest BuildFax Housing Health Report. The chance of a recession stands at about 42%, ac- cording to BuildFax. BuildFax's recession prob- ability estimate started the year at 29% and then rose sharply to nearly 50% by September. Now it is on the decline. According to BuildFax, the time to "raise red flags" is when the likelihood reaches about 60%. September's heightened prob- ability was due to "a culmination of sluggish housing activity, global tensions, and turbulence in the U.S. stock market," according to BuildFax, which bases its prob- ability on 14 factors, including single-family housing authoriza- tions, AAA corporate bond yield, average hourly construction earn- ings, average hourly manufacturing earnings, average manufacturing hours worked, personal income, employment levels, and more. "The probability is expected to decline even further by the end of the fourth quarter as long as economic conditions remain favorable," BuildFax stated in its report. One of the most important factors in BuildFax's predictions is single-family housing authori- zations, which BuildFax labeled "one of the most predictive fac- tors" in housing recessions that occurred between 1961 and 2008. BuildFax's recession probability indicator has followed housing activity throughout the year—fall- ing through most of this year and picking up in the past few months. Moving forward, Jonathan Kanarek, Managing Director at BuildFax, said single-family authorizations are "a must-watch indicator" for the market. Single-family housing autho- rizations showed some positive movement in November for the second time following 11 months of decline. Authorizations for single- family housing rose 1.16% over the month in November and posted a substantial 7.09% gain over the year. BuildFax also tracks a trailing three-month average, which was 4.99% for the three months ending in November. Existing maintenance volume increased 7.26% over the year, and remodeling volume rose 4.60% over the year. Increases in main- tenance and remodeling often accompany home purchases and sales, according to BuildFax. "Housing activity is seemingly on its way to a stabilization, as new and existing construction both saw increases this month," Kanarek said. "However, declining single-family housing authorizations in 2019 have led to an increasingly dwindling housing supply." The damper on housing supply could have implications on prices in the new year, Kanarek noted, saying that the market will have to "grapple with the lingering ef- fects of the 2019 slowdown." Overall though, Kanarek reported that BuildFax is "cautiously optimistic that continued increases in housing activity into 2020 will alleviate some of the economic uncertainty that the country has felt throughout this past year."