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Millennial borrowing habits could mean big trouble

As many of you know I spent more than a decade in the housing industry before coming to Boating Industry, so I still keep an eye on what's going on in that market.

Not only do I have a personal interest in it, the housing market plays a huge role in our overall economy -- and the boating industry.

And that's why a recent report from Discover Financial Services worries me. It seems like Millennials weren't paying attention to the previous decade as they are turning to their houses as ATMs, a practice that played a huge role in the housing crash.

The survey focused specifically on older Millennials (those 30 to 34). The key finding: of the 64 percent of older Millennials who own a home, 51 percent have used a home equity loan.  The numbers are drastically lower for other age groups: Only 29.4 percent of those between 35 and 44, 19.9 percent of those between 45 and 54, 25.7 percent of those between 55 and 64, and 22.3 percent of those 65 and older also said they took out a home-equity loan.

What are they using that money for? The most popular reason Millennials took out home equity loans was vacations at 43.3 percent. Emergency cash was second at 41.8 percent. (Respondents could choose more than one reason). For the older age groups, debt consolidation and home remodels were the top responses.

The survey also showed that Millennials are more likely than Boomers to use their home as a financial asset by selling it to make money (27 percent vs. 13 percent). While a quarter of older Millennials see their home as an investment property, just 7 percent of Baby Boomers feel the same way.

That shows a fundamental disregard for history. We are already seeing near-bubble values in several markets and many of the housing experts I know are very worried about certain parts of the country racing into another crash.

The last housing crash dealt the boating industry a blow that we are still working our way back from. Considering we're counting on Millennials to keep the industry going, that's not a good sign.

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