Hayley Johansen and Marcus Kienlen at their home in suburban Portland, Oregon.
Hayley Johansen and Marcus Kienlen at their home in suburban Portland, Oregon. - 
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The housing industry appears to finally be in broad recovery mode after years of struggle following the official end of the recession in 2009. Housing starts and sales are rising, home prices are increasing steadily, mortgage rates remain low, and fewer people are stuck in underwater mortgages, locking them in place and making it difficult to sell.

And one key demographic group that could fuel the housing recovery now shows signs of re-entering the market as well: people under 35. This group’s homeownership rate peaked in 2006 and has been declining ever since, falling to just below 35 percent in the second quarter of 2015. But that rate may have bottomed out and started to rebound. Household formation has begun rising after falling during and after the recession. The birthrate also appears to be inching up after declining for nearly a decade.

Hayley Johansen and Marcus Kienlen are in their mid-20s and just purchased their first home in suburban Portland, Oregon. They paid $325,000 for a three-bedroom, two-bath ranch home, which was well within their price range (both are engineers associated with Intel’s huge semiconductor complex here).

“We watched a lot of ‘House Hunters,'” says Hayley Johansen, sitting in her new carpeted living room, still sparsely furnished. The couple are about to get married, so cash has been tight.

“We decided we wanted a place of our own and didn’t want to keep paying rent. We actually want to be putting it into something and make it our own,” she says.

Kienlen chimes in. “We really wanted some land and privacy,” he says, looking out the sliding patio doors to a midsized backyard. “We wanted to get a dog, and have outdoor barbecues and hang out.”

Fannie Mae recently surveyed young renters and found that the steep fall in homeownership among people under 35 might be more a matter of personal finances and the overall economy than a lifestyle choice. The survey found that 90 percent plan to own a home eventually. But many think it will be difficult for them to save for a down payment or get a mortgage (73 percent of young renters say it would be very difficult to get a mortgage, compared to 50 percent of the general population). The two most often cited obstacles to saving and qualifying for a mortgage are credit standards (which have tightened dramatically since the early 2000s housing boom), and student loan debt.

Another obstacle to homeownership for many young individuals and families — even if they have good jobs and incomes — is rising rents, which make it harder to save for a down payment, especially in hot urban markets.

Bethann Coldiron and her husband are in their mid-20s. She is a journalist and he is in the Air Force, which saved them from having to come up with a down payment.

“One of the benefits of having a V.A. loan is that you don’t have to have a down payment,” Coldiron says. “It would have been pretty hard, just because neither of us make a ton of money.”

The Coldirons are in the process of buying a two-bedroom house in a suburb of San Antonio for $125,000. They decided to buy now because interest rates are low, and they were eager to stop paying rent to a landlord, rather than building equity. And they think the San Antonio market — with low unemployment and growing businesses — will prove to be a good investment in coming years.

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Follow Mitchell Hartman at @entrepreneurguy