Kelsey Marshall and her boyfriend Chris Eidam, both 27 yearsold, call the home-buying process “terrifying.” But they’re clearabout one thing: It beats the heck out of renting.

“We’re wasting money where we are right now,” near Bridgeport,Connecticut, Eidam said. “We just take our rent and we throw itaway. That money doesn’t go to anything.”

If that line of thinking sounds familiar it’s because, contraryto much of what’s written about them, millennials have many of the same attitudestoward housing as their parents and grandparents. Most say theywant to eventually own homes, and only rent because of financialnecessity. They even appear to be choosing more traditional housesin the suburbs over renting or buying in city centers.

So far, so good, for the housing industry -- but that’s not thewhole story. Home-ownership rates are still near record lows,several percentage points down from before the housing bust, evenafter one of the longest economic expansions on record. Hardlyanybody expects them to come all the way back. And that’s notbecause of some new mindset among millennials -- it’s because ofthe economy they came of age in.

For now, realtors are celebrating a small but noticeable uptickin buying among millennials, the country’s largest age-group.Nationwide, for two straight quarters, the homeownership rate amongthose aged 35 and younger has increased.

That’s “huge’’ for the industry, and shows that millennials are“getting back into the game,” said Ralph McLaughlin, chiefeconomist at Trulia. “In the long run, we expect millennials to ownhomes at rates of their parents or close to it,” he said. “It’sjust that they’re experiencing headwinds.’’

But what if those headwinds are here to stay? Rents consume alarger share than they used to out of earnings that aren’t growingmuch, making it hard to save for a down payment. Lending standardshave relaxed some; still, young buyers already carrying recordlevels of student debt can struggle to qualify. Home building haslagged and become increasingly geared toward high-end houses, aswealth skews upward. Perhaps above all, for the generation that’sjust getting started on careers, job security is a thing of thepast.

“You go back 20 or 30 years, people would get a job in theirlate 20s, early 30s with the idea that they might work there untilretirement,” said Dean Baker, co-director of the Center forEconomic and Policy Research and an economist who studies housing.“People aren’t in that boat today.”

For young people whose careers will likely require frequentmoves from city to city, the math often doesn’t add up. Owners haveto stay put for some years to recover the transaction costs,especially in regions where prices don’t rise much. Tax proposalscurrently in Congress would reduce or eliminate deductions formortgage interest and property taxes, further undermining the casefor buying.

That’s “not necessarily a bad thing,” Baker said. “It’s good fora lot of people to be a homeowner, but in a lot of cases, you mightsay someone wants the option -- they’re in Chicago, New York andthey get a good job offer in California or something -- you wantpeople to be able to take that. If they are tied to their homes,that’s a big commitment.”

There are barriers on the supply side, too. Builders all overthe country have been shying away from the more affordable homesthat millennials favor. That’s limiting availability and driving upprices, leaving the market ill-prepared for a large influx of youngbuyers. Industry analysts cite labor shortages, restrictive zoninglaws and materials prices among the reasons.

“The result is that price gains continue to exceed income growththrough scarcity,” said Rob Dietz, chief economist at theNational Association of Homebuilders. “Particularly in that smallerhome market, which is the hardest market for a builder toessentially reach and build to these days.”

Jessica Feliciano has noticed the squeeze. Every house the34-year-old has looked at in Hartford’s desirable suburbs gotsnapped up before she could make her move.

“Once a good house comes on the market and it’s priced properly,it’s gone within like five days,” she said. “So if you don’tschedule a showing and make a decision basically on the spot, it’sgone.”

Zoning and associated land costs are especially tough inConnecticut, helping make it one of least dynamic housing marketsin the U.S. The state’s 169 towns all have different standards, andmost have been resistant to building more homes per acre, eventhough in places where that’s been attempted, it’s often been asuccess.

“Every town has their own politics and their own zoning andtheir own ideas of what they want,” said Johnny Carrier, a buildernear Hartford, who succeeded with a neighborhood of townhomes inNewington and is looking for opportunities to replicate itelsewhere.

The U.S. housing industry expresses confidence that in spite ofall the obstacles, millennials will come round to home-ownership astheir life-situations change. While they’ve been getting marriedand having children later than their parents did, young adults arestarting to cross barriers typically associated with buying.

The number of households is edging up, as the last millennialsgraduate from college and strike out on their own. When that trendsurfaced in 2014, young adult households typically became renters.Last year, more became owners.

“Right now, probably a third of our housing business is youngcouples coming out of the apartments,” said Chris Nelson, a builderin Simsbury, an upscale Hartford suburb. “We really think thatthat’s just the beginning. That over the next three to five years,we’re going to see a ton of people coming out of the apartments,buying homes.”

Conditions should eventually get easier for those buyers: Morehomes are expected to come on the market as Baby Boomers downsizeor pass on. But it may take a while -- and it may be another,yet-to-be-named generational cohort that sees the fullbenefits.

“In the long run, we’re going to age out of the problem,” saidMcLaughlin, the Trulia economist. “That may be, however, another 20years before that starts to happen en masse.”

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