How Millennials Could Hurt These Stocks: Bank of America Corp (BAC), Citigroup Inc. (C)

First and foremost, the housing industry brought on the financial crisis, and returning it to its former health has been a priority of economists and policymakers. Yet with more young adults choosing to rent instead of buy, the challenge for homebuilders will be to adapt. Already, Lennar Corporation (NYSE:LEN) has added multifamily projects to its single-family construction, and both Lennar and Beazer Homes USA, Inc. (NYSE:BZH) have bought up inventories of foreclosed properties in the interest of renting them out rather than reselling them. Continued interest could boost those stocks further.

Second, on the vehicle front, lower sales of cars and trucks could help Zipcar Inc (NASDAQ:ZIP) and buyer Avis Budget Group Inc. (NASDAQ:CAR), as well as others seeking to offer car-sharing services to renters. As long as car use stays high, fleet sales to car-sharing companies may help support automakers’ businesses, albeit perhaps not at the same margins they enjoy on direct sales to customers through their dealer networks.

Finally, falling credit card debt will inevitably weigh on big card issuers Citigroup Inc. (NYSE:C) and Bank of America Corp (NYSE:BAC). With rates on other debt at very low levels, credit cards remain the one reliable source of plentiful interest income, and as delinquency rates have fallen, the business has gotten more profitable. Credit cards represent more than half of Citi’s total consumer loans outstanding, and for B of A, cards produced $6.3 billion in pre-tax profit during 2012, one of the bank’s most profitable segments.

Good news and bad news
What’s bad news for investors, though, is good news for the Millennials themselves. With a background of taking financially responsible actions, Millennials may well be setting themselves up for great financial success if the economy ever gets back on an upward track.

The article How Millennials Could Hurt These Stocks originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger owns warrants on Bank of America. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Zipcar. The Motley Fool owns shares of Bank of America, Citigroup, and Zipcar.

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