The global chairman of PricewaterhouseCoopers was asked by a cable business network Wednesday to share an observation about his firm's millennial workforce. Nally was happy to note this youthful subset makes up about two-thirds of the professional staff at PwC, a worldwide accounting and business consulting giant. The average age is 28 to 29.
"I think the thing that's really interesting about the millennials is they clearly want more flexibility than any of us ever dreamed of," Nally said.
Nally was referring mostly to career-related demands, but Steve Slifer would likely nod in agreement. A day earlier, the former Lehman Brothers chief economist was making the case about how this up-and-coming generation of wage earners is flexing its collective buying power.
Slifer introduced residential real estate as Exhibit A. For millennials, a paid-off house in the suburbs might not be on the bucket list of the American Dream.
"There's something going on here - a real shift from homeownership to renting," he said Tuesday.
That was a key takeaway from Slifer's annual economic forecast.
The changing housing preferences can be seen in the U.S. homeownership rate. That figure fell from a peak of nearly 70 percent a decade ago to a 20-year low of 64.3 percent more recently.
Meanwhile, despite the improving job market and rock-bottom loan rates, the share of first-time homebuyers has dropped to 33 percent, its lowest point since the mid-1980s, the National Association of Realtors said in a survey released last month.
"Rising rents and repaying student loan debt makes saving for a down payment more difficult, especially for young adults who've experienced limited job prospects and flat wage growth since entering the workforce," Lawrence Yun, the group's chief economist, said in a statement. "Adding more bumps in the road is that those finally in a position to buy have had to overcome low inventory levels in their price range, competition from investors, tight credit conditions and high mortgage insurance premiums."
Also, an increasing need to be mobile, mainly for employment purposes, is certainly another big reason millennials don't want to be anchored to a mortgage.
Slifer cited most of those factors and added a couple of his own in trying to sort out what's preventing young renters from taking the plunge. There are no simple explanations.
"To understand why it's dropping, I think you need to understand why it rose in the first place," he said of the U.S. homeownership rate.
He traces the ups and downs to the federal Affordable Housing Act of 1992, which was crafted to bring more lower-income buyers into the fold.
"Isn't it amazing how everything is 'affordable' today, housing, health care," he quipped.
However well-intentioned, the act eventually backfired as mortgage-lending standards fell by the wayside, Slifer added.
"So we obviously got a lot of people engaged in housing that probably had no business owning houses," he said. "They had a lot of those adjustable rate mortgages, Then, when the Fed began to raise rates in 2004 or 2005 and these things started to reprice, guess what? These people couldn't afford it, and all of the sudden they lost their houses and had to switch to renting. So that's part of the decline in ... homeownership."
But not all.
The so-called Great Recession probably had a role as well. Slifer noted that for his entire "adult lifetime, home prices always went up," aside from the occasional "wiggle."
"You couldn't lose," he said. "This was a sure bet. But suddenly in the recession we just had - whoops - home prices dropped a lot. ... So that may have had some influence on people's willingness today to buy homes."
He circled back to reports about falling homeownership levels. When broken down by age bracket, Slifer said, the decline is mostly traced to the 35-44 and under demographic.
"Sort of younger people," he said. "There may be ... a change in mindset, that they don't have the great desire to own their own house that my generation, that my parents' generation had. Maybe. Can't prove that."
Slifer said the shift in behavior comes at a time when the U.S. isn't adding enough residential space - 1 million units per year for 1.3 million new households.
"What it says to me is ... housing is going to do well," he predicted for the overall market. "But if you split the part between the single-family and the multifamily, we're going to find this multifamily thing grows very, very rapidly."
Not everyone agrees that mil- lennials are determined to become lifetime tenants.
A survey from the real estate research company Trulia in 2012 found that 93 percent of 18- to 34-year-old apartment dwellers and other renters plan to buy someday. Numerous other studies and experts also project the younger set will become homeowners eventually, just a little later in life.
Either way, they're flexible.