Tracking Where Millennials Settle
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What is the main topic discussed in this episode?
Your Money Briefing. Money and market stories from the Wall Street Journal. I'm Charlie Turner in New York. The ability to gauge where sectors of the population move and settle down, potentially driving up home values, could be a valuable piece of information to investors and the real estate industry. This is especially true with millennials. More on this in a moment. First, here are some money stories. Energy stocks are getting pricey again. The Wall Street Journal's MoneyBeat team says that oil and gas companies, bolstered by a surge in global crude prices, have taken over as the U.S.
What investment insight motivates tracking where millennials settle?
stock market's priciest segment. The energy sector is trading at a ratio of 19.7 times expected earnings over the next year. according to a report from Credit Suisse. That's above the tech sector's rate of 17.9 times earnings and the S&P 500's rate of 16.3 times earnings. Energy stocks have surged lately alongside rising crude prices. The price of crude is now approaching $70 a barrel, a level not seen since 2014 as major oil exporters hold back production and geopolitical tensions have threatened supply. From the Wall Street Journal's economy team, U.S. tariffs on steel imports are likely to cost the American economy jobs, according to new research from economists at the Federal Reserve Bank of New York.
A recent posting from the New York Fed's Liberty Street economics blog said, Although it is difficult to say exactly how many jobs will be affected, given the history of protecting industries with import tariffs, We can conclude that the 25% steel tariff is likely to cost more jobs than it saves. The blog goes on, the new tariffs are likely to lead to a net loss in U.S. employment, at least in the short to medium run. The New York Fed research came after the Federal Reserve said U.S. businesses reported rising steel prices due to the new tariffs. Coming up, J.R. Whalen with an interview on how tracking where millennials move can be a goldmine of information. This is your Money Briefing from The Wall Street Journal.
How have recent market headlines and oil prices set the economic context?
Welcome back, everybody. Rising home prices throughout the U.S. no doubt provide an investment opportunity, but being able to gauge where sectors of the population are moving that would potentially drive up home values can be a valuable piece of knowledge. What if you could track where the largest generation on record is moving to setting up roots? That generation is millennials, and they're poised to reshape real estate markets throughout the U.S. Melissa Reagan is head of research for the America's Division of Nuveen's TH Real Estate Division, and she joins us to discuss. So, Melissa, this is an enormous block of the population.
Correct. Yes, it's about 80 million people. And the millennials, as we categorize them, were born between 1981 and 1998. And we group them into what we call the older millennials and the younger millennials. And the older millennials are ages 30 to 36 today. And the younger millennials are ages 19 to 29 today.
So let's start with the investment opportunity of following the older millennials. Is the potential impact on the real estate market that pronounced?
Yeah, we think so. So the older millennials, millennials overall are about 80 million people. Of that, older millennials are about 30 million. And so what we think is going to happen is that we've tracked kind of where are millennials living right now, where are they concentrated. And you'll see it a lot in the coast, so very expensive places, New York, California. L.A., San Francisco, Seattle, Boston. And they're living in urban areas right now. But if you think about that, they're likely to move to the suburban areas of these regions. And we say that because we think they'll actually stay in these metros because they actually have pretty good paying jobs, high paying jobs. But living in an urban area once you start to get married and have children becomes just a little bit expensive.
And so we think they'll move out to the suburbs. And then that is where that will create a lot of investment opportunities.
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