Study after study has shown that Millennials - that generation of Americans currently between the ages of 18 and 34 - are becoming homeowners at rates way below that of earlier generations at the same age.  Now Zillow has released a survey showing that, while they might not be buying, Millennials would definitely like to do so.

This was one finding of the most recent U.S. Housing Confidence Survey conducted by Pulsenomics LLC.  The most recent survey was conducted in July and the resulting Zillow Housing Confidence Index (ZHCI) rose to 64.2, from 63.7 in the prior survey in January. Housing confidence increased among residents of 11 of the 20 major metro areas surveyed.

The ZCHI is composed of three sub-indices:

• The Housing Market Conditions Index (HMCI), which measures prevailing market trends and buying/selling conditions.
• The Housing Expectations Index (HEI), measuring expected changes in home values, home affordability and the value of homeownership.
• The Homeownership Aspirations Index (HAI), which measures household home-buying plans and attitudes toward the social value of homeownership.

The headline index and the three sub-indices are measured on a 0 to 100 scale, with readings above 50 indicating positive sentiment.   The survey consists of more than 10,000 completed household interviews with adult landline and cellphone users nationwide. The ZHCI and all sub-indices are also analyzed by tenure, to enable measurement and comparison of housing sentiment by homeowners and renters.

Overall, housing confidence is higher among homeowners than renters, likely owing to historically high rents and favorable home buying conditions, but younger renters are more upbeat about their future home-buying prospects than their elders. Among millennial renters 82 percent said they were confident or somewhat confident that they will be able to afford to own a home someday, compared to 64 percent of Generation X renters (those aged 35-49) and just 48 percent of Baby Boomer renters (aged 50-64). Millennials overall were also far more optimistic about future home value appreciation. One-third of millennials (33 percent) said they expected home values to rise more than 6 percent per year over the next decade, compared to 21 percent of Generation X and just 15 percent of Baby Boomers.

"It's heartening to see younger renters express so much confidence in their ability to buy a home in coming years, because today's renters by necessity are tomorrow's buyers," said Zillow Chief Economist Dr. Stan Humphries. "Cynics might argue that these results represent no more than youthful exuberance, or perhaps some naiveté, but that's missing the point. We need this generation to be confident and wanting to buy, regardless of the difficulties they face. And there are difficulties, including saving for down payments in the face of high rents and high student debt burdens, uncertain job prospects among younger workers and limited entry-level home inventory. But optimism is a necessary first step, and indicates a desire among a very creative generation to find creative solutions that will enable them to achieve homeownership."

San Francisco, Seattle and San Jose residents expressed the most confidence in the housing market. Residents of Philadelphia, Chicago and St. Louis expressed the lowest level of confidence.

Zillow said that in some respects, millennials may have more conventional views about housing than older generations. Almost two-thirds (65 percent) agreed with the statement that owning a home is necessary to living the "good life" and is central to the American dream, compared to 56 percent of Generation X and 55 percent of Baby Boomers. Roughly 46 percent of millennials agreed that owning a home is necessary to be a respected member of society, compared to 38 percent of Generation X and 30 percent of Baby Boomers.

Both the HMCI and HAI rose in the most recent survey, to 62.1 and 62.7, from 60 and 62.4 in January.  The HEI fell from 66.3 in January, to 66.1 which puts consumers' expectations for more modest home value growth going forward are in line with Zillow's predictions.  The Zillow Home Value Forecastⁱⁱⁱ predicts home value growth of 3.1 percent through next August, down from 6.6 percent over the past year.

"Although strong aspirations are no substitute for financial capacity or creditworthiness on a mortgage loan application, this feedback from millennial renters is significant because it confirms that they bear relatively few psychological scars from the housing bust, and because the attitudes of this generation will drive housing trends in the decades to come," said Pulsenomics Founder Terry Loebs. "Regarding the outlook of renters across all generations, in 14 of the 20 major metro areas in which we conduct our research, a majority of renter households don't believe that right now is a good time to buy a home. However, a larger, two-thirds majority of these 3,764 renter households said that owning a home someday is a specific goal that they are determined to reach, or something that they think about a lot."