October showed some signs of life in the American dream, if you consider owning a home the core of the American dream.
Last month, U.S. housing starts soared an astounding 25.5% to 1.32 million units, crushing Wall Street’s estimate for 1.16 million units. It was the highest level since August 2007, as starts jumped across all four regions.
What’s more, permits for single-family homes increased 2.7% in October — a leading indicator that we should continue to see growth in home starts in November.
While new home sales dropped 1.9% in October, existing home sales soared 5.9% from a year ago to 5.42 million — setting the fastest pace since February 2007.
Of those existing home sales, 33% were first-time buyers — significantly higher than we’ve seen in previous years.
Millennials Driving the American Dream
And this could be just the tip of the iceberg for a much larger trend that will still play out.
According to Pew Research Center, 32.1% of all millennials (age 18 to 34) still live with parents. For the first time since 1880, this portion is larger than those who are living with a spouse or partner (31.6%).
For this rising generation (who number more than 91 million in the U.S.), the American dream has been put on hold as they struggle with student loan debt and finding a good job. That 32.1% represents millions of people who are preparing to jump from the sidelines to buy their first home.
And with that first home comes new furniture, new appliances, new fixtures and much more. These big-ticket purchases will spur growth within the economy and new opportunities for investment.
For millennials, the American dream isn’t dead. It was just deferred. And this group of roughly 92 million is getting ready to change everything.