Generation X is still reeling from the housing crisis, according to a report by real-estate site Zillow released last week.
Home-owning Seattle Xers with mortgages still owe a median of 61.9 percent of their homes’ current values—far behind the boomers before them at 49.3 percent. For context, when Seattle millennials own a home with a mortgage, they still have a median 67.5 percent of the value to pay off.
Overall, the Seattle homeowners still have a median of 55.6 percent of their home’s value left to pay off.
88.7 percent of Generation X homeowners are paying off a mortgage, almost identical—even slightly more—than millennials, at 88 percent. For boomers, that drops to 76.3 percent; for the silent generation, that’s 45.6. (The silent generation has, unsuprisingly, the best equity overall, with the less-than-half that are still paying owing a median 37.6 percent.)
This is a little better than the national numbers, where the typical home-owning member of Generation X still owes 70.1 percent of their home’s value. But they have a similar, narrow lead over millennials, at 76.2 percent.
So what happened, other than hard times?
“So much of the explanation for why the housing crisis hit Gen X hardest comes down to simple bad luck and bad timing,” Dr. Svenja Gudell, chief economist at Zillow, told Curbed Seattle over email. “Gen X was aging into their early 30s—the prime home buying years —in the boom years immediately leading up to the bust. For those that purchased a home in 2004, 2005 or 2006, there was really no way of knowing the calamity to come, and at the time these buyers were simply making the best choice they could based on available information.”
Because many were buying homes around the top of the market at the time, “these newly minted homeowners had farther to fall,” said Gudell.
At the time, said Gudell, it was easy to buy a home with a tiny downpayment, meaning that much more home value to pay off. Many lost their homes in the crisis, “effectively shutting them out of homeownership for seven years or more.”
Many of these homeowners are starting to buy houses again—another reason why they may not be that far ahead of the generation after them. Some previously home-owning Xers may still be waiting to get back in.
This is consistent with March 2016 study from the Urban Institute that found that out of 9 million people that went through a foreclosure between 2003 and 2015, just under 5 million were still renting—and more of those previous homeowners were from Generation X than any other age group.
Even for those that managed to hold onto their homes, though, “the past few years of solid growth have been spent building back equity lost during the bust, instead of starting with a clean slate like their younger millennial peers.”
Those homes may still be worth less than they were purchased for, added Gudell. According to Zillow’s data, 6.5 percent of homes were in negative equity during the first quarter of 2017.
Gudell said in a statement that because “roughly half of American wealth is held in home equity,” this puts Generation X farther from retirement than previous generations. With rising home values, Gudell said, Xers that own their homes should build equity back up.
That leaves a big gap for both the Xers that lost their homes and never bought new ones, or were never able to buy a home at all. With those rising housing costs, will they be able to buy back in?
And while home-owning millennials are on track with the generation before them in terms of equity, that’s only for those that own a home. Nationally, as of this time last year, that was only around a third of them. Around the same time, 58.9 percent of Generation X owned a home.