Young under 35 year old homeowners have halved in the last decade.

The difficulty for young people to access their own homes is increasing, and such data is confirmed by the Bank of Spain, which certainly indicates that the home ownership rate among those under 35 has fallen by half in the last decade.

Specifically, this share has fallen from 69.3% in 2011, during the last crisis, to 36.1% in 2020, as indicated by the Financial Survey of Families 2020, published on Wednesday by the Bank of Spain, relating to the period 2017-2020.

According to the supervisors, the sharp drop in home ownership among young people is largely due to two factors. First, this is due to the development of the credit market, which is becoming more difficult to access every time. Secondly, it is the uncertainty about their income, as "incomes are becoming increasingly volatile".

Experts at the Bank of Spain point to a third factor that could also have influenced this dynamic, although to a lesser extent than the previous two. It's about tax developments and especially the fact that the tax deduction for home purchases has been eliminated.

From 2017 to 2020, corresponding to the Family Financial Survey, the percentage of households owning their primary residence whose head is a person under the age of 35 decreased by 5.2 percentage points, which is significantly higher than the average decrease of 2 points (to 73.9%).

Source of wealth

It is thus recognized that it is becoming increasingly difficult for young people to have access to a valuable asset that is the main source of wealth for Spanish families. Principal housing accounts for about 60% of the asset value of low-income families, while it exceeds 20% for high-income families.

The Survey shows that the average income of Spaniards is 38,900 euros, while the median value is 29,400 euros. The richest 1% of the population owns 8.6% of total income, while the 5% control 21.7% and the 10% control 42.8%. Between 2017 and 2020, the period referenced in this report, median household net wealth increased by 4.6%, thus breaking the downward trend seen between 2011 and 2017, when it fell by 27%.

Financial burden

In another aspect, the Bank of Spain presents in this Survey an assessment of how an increase in interest rates could affect the financial burden of families. Currently, the percentage of households with high financial burden is 10.9%, far from the crisis years (16.6%). The Bank of Spain is analyzing a scenario in which short-term interest rates rise sharply by 300 basis points, in which case vulnerable households would increase by five percentage points.