High student loan debt is one main culprit for the lower rate of home ownership over the past decade, a new study from the Federal Reserve shows.

Home ownership of all Americans has fallen 4 percentage points from its peak of 69 percent in 2005. It has dropped the most—from 45 percent to 36 percent—among those 24 to 32 years old.

“In surveys, young adults commonly report that their student loan debts are preventing them from buying a home,” Fed researchers Alvaro Mezza, Daniel Ringo, and Kamila Sommer write in the paper. “Our estimates suggest that increases in student loan debt are an important factor in explaining their lowered home ownership rates, but not the central cause of the decline.”

The Fed’s paper did not identify the other causes for the decline in the home ownership rate among younger adults. Researchers attributed about 20 percent of the drop in the rate to high student loans.

Every increase of $1,000 in debt contributed to a 1- to 2-percentage-point drop in home ownership, the study finds. Researchers note that this equates to about 400,000 people who otherwise would have expected to own homes but have not because of their student loan debt.

“This finding has implications well beyond home ownership, as credit scores impact consumers’ access to and cost of nearly all kinds of credit, including auto loans and credit cards,” the researchers noted in the report. “While investing in post secondary education continues to yield, on average, positive and substantial returns, burdensome student loan debt levels may be lessening these benefits.”

The National Association of REALTORS® has also conducted studies showing the impact student debt is having on delaying home ownership. A 2017 NAR study found that student debt delayed homeownership by about seven years. It also had an impact on the rest of young adults’ lives, such as holding millennials back from making financial decisions and reaching personal milestones, such as changing careers, continuing their education, marrying, or even having children.

The real estate industry will soon see what kind of impact weeks of declining mortgage rates have had on home sales. Will it provide the boost some experts are predicting?

Since early November, the 30-year fixed-rate mortgage has fallen nearly half a percentage point, from 4.94 percent to 4.45 percent, where it stood at the end of this week. This could provide an important incentive for potential home buyers to make a move. The 30-year rate, which didn’t budge in the latest week of reporting, was on a downward trend for six consecutive weeks prior. Existing-home sales in November were already bouncing back from unusually low volume in the summer months, gaining 1.9 percent month over month, due largely to stability in the overall economy, according to data from the National Association of REALTORS®. But when NAR’s data for December existing-home sales is released Tuesday, it may reveal whether lower mortgage rates have escalated sales gains.

NAR Chief Economist Lawrence Yun told Yahoo! Finance on Thursday that he expects recent declines in mortgage rates to keep home sales on an upward track—possibly leading to an additional 200,000 transactions this year. “Buyers will want to take advantage of the lower rates,” Yun says. “This additional demand will help absorb inventory. Both home prices and home sales will be lifted.”

Though rates were flat in the latest week, due largely to weaker manufacturing data and a prediction that the Federal Reserve will leave its benchmark interest rate alone for now, other industry experts echo Yun’s positive outlook. “Interest rate-sensitive sectors of the economy—such as consumer mortgage demand and homebuilder construction sentiment—are on the mend, which indicates that lower interest rates are beginning to have a positive impact on some segments of the economy,” says Sam Khater, Freddie Mac’s chief economist.

Freddie Mac reports the following national averages with mortgage rates for the week ending Jan. 17:

• 30-year fixed-rate mortgages: averaged 4.45 percent, with an average 0.4 point, unchanged from last week’s average. Last year at this time, 30-year rates averaged 4.04 percent.
• 15-year fixed-rate mortgages: averaged 3.88 percent, with an average 0.4 point, dropping from last week’s 3.89 percent average. A year ago, 15-year rates averaged 3.49 percent.
• 5-year hybrid adjustable-rate mortgages (ARMs): averaged 3.87 percent, with an average 0.3 point, rising slightly from last week’s 3.83 percent average. A year ago, 5-year ARMs averaged 3.46 percent.

Builders across the country are betting on luxury town homes to try to get more young adults into home ownership. Open floor plans, high ceilings, and upgraded amenities are features they hope will lure millennials to buy their first home.

“When a lot of people think of townhouses, they think of these very narrow homes because the floors are stacked on top of one another,” Felix Bravo, a sales executive with Pordes Residential in Miami, told Forbes.com. He is selling town homes up to 3,000 square feet starting at $900,000. “With the amount of space we have, they have a very open feel.” The amenities include a private rooftop terrace with a jacuzzi and outdoor kitchen.

“The wow factor is how much space they have and how luxurious the interior is in terms of appliances, cabinetry, and the kitchen island,” says Bravo. “The second biggest wow factor is being able to go up to your own private rooftop and hop into your private jacuzzi. It makes you feel like you’re worth a million bucks.”

Builders hope that such luxurious  town homes will attract more young adults to consider buying one.

“There are plenty of examples of townhouses being built as luxury homes,” Robert Dietz, chief economist for the National Association of Home Builders, told Forbes.com. “You’ve got your four-story townhouses, particularly in high-cost metro areas.”

A town home can offer a “suburban-type feel” while also adding in some walkability to a neighborhood—two features that millennials say they desire in a home, Dietz says. Single-family attached townhouses provide a higher density and, therefore, more opportunities for retail and commercial around it that is walkable, Dietz says.

Since 2009, new town home construction has been increasing. Townhouse starts were 24 percent higher in the third quarter of 2018 than the previous four quarters, according to NAHB data. The market share of townhouses is currently at about 14 percent of single-family home construction, which marks a post-recession high.

Dietz predicts over the next five years that the town home market share will continue to rise and reach about 20 percent.

Farmhouse design continues to gain popularity in kitchen remodels, according to the 2019 Houzz Kitchen Trends Study, a survey of more than 1,300 homeowners who are planning or in the midst of a kitchen project.

Eighty-two percent of renovating homeowners this year who are changing the style of their kitchen says they’re making it farmhouse. Farmhouse now nearly ties contemporary in popularity (14 percent versus 15 percent, respectively). Transition—a mix of tradition and modern—still remains the most popular in kitchen design at 21 percent.

“This year’s study illuminates a number of prominent trends in today’s kitchen,” says Nino Sitchinava, Houzz principal economist. “Engineered materials are clearly taking over natural stone in countertops and flooring. Thanks in part to the versatility of these materials, white continues to dominate the kitchen, from cabinets to countertops and walls. Finally, rapid advances in wireless and voice technology are transforming some kitchens into ‘air traffic control’ centers of the home.”

Kitchens aren’t cheap to redo and are about 10 percent more expensive this year, according to the study. The median kitchen renovation cost $11,000, while a major renovation to a large kitchen (more than 200 feet) cost $33,000.

Here are some more kitchen trends that emerged from the Houzz report:

Gray cabinets: White cabinets remain the most common (43 percent), but gray cabinets are winning over more fans. About one in ten homeowners—or 11 percent—chose gray cabinets for their kitchen. Gray cabinets are then often paired with brushed or satin nickel door hardware.

White and quartz countertops: Granite continues to decline in popularity, while engineered quartz is surpassing all of the natural stone materials combined among kitchen remodelers who updated their countertops. White counters are gaining steam, making up nearly one in every three upgraded countertops.

Mixed finishes: More than half of homeowners—54 percent—say they’ve mixed metal finishes across their fixtures and hardware. For those who mix and match, nickel is popular, but many then opt for oil-rubbed bronze or brushed or satin black finish for door hardware and lighting fixtures.

Engineered flooring: Only a quarter of remodelers who updated their flooring chose natural hardwood, marking a significant decline from recent years. Engineered flooring—such as engineered wood, vinyl, and laminate—have become nearly twice as popular in the meantime.

Appliance finish: Stainless steel may still rule, but black stainless is growing more popular as an appliance finish. It is now in one of every 10 upgraded kitchens. Read The New Kitchen Finish: Black Stainless

High-tech add-ons: More than half of upgraded faucets are high-tech, including water efficiency, no-fingerprint coating, and touch-free activation. Other high-tech features in the kitchen include wireless controls in upgraded appliances and home assistants.