Becoming parents in today’s society takes more than absent-minded thought patterns. There are many more considerations – including the cost of everything that goes into parenting. Home-owning is one of these considerations.
According to Elizabeth Grey, home ownership is an inalienable part of the American dream – or at least has been over the past 60 years. As she has stipulated in her article, ‘Is Generation Rent Threatening the American Dream?’ since WWII, home ownership has formed the cornerstone of upward mobile aspiration.
It seems as if this dream is somewhat diminishing with the Millennial generation (adults under the age of 35). The fact that only 37% of Millennials currently own their own home compared to the 42% of home ownership only five years ago is creating quite a stir!
There seems to be quite a bit of discussion as to why home ownership levels have diminished. Some believe that the Millennials are worried about the frustration of aspiration while others believe it to be a decline in living standards. Some even believe that the lessened home ownership could be actively harming the economy.
What many are worried about is if the 20 and 30-somethings are being forced out of the housing market or if the situation is more complex. They would like to know the potential consequences for our country and the economy.
Millennials are not buying home because of a lack of money. The Millennial generation currently has the highest rate of student debt that our nation has ever seen. The average amount of student debt has continued to soar over the past decade with the average student debt equal to $24,000. However, experts have proven that this amount can even be higher if the student attended private school or continued on with a post-graduate degree. The average law school graduate now owes more than $100,000 in debt – not to mention medical students!
When these students graduate, many will head to where the jobs will pay the best in order for them to be able to afford to pay off their student debt. The only issue is that the rents are higher, too. In April, NBC5 announced that the middle class cannot afford rent in Chicago any longer. New York and New Jersey residents will pay on the average of $1,200 per month for a modest two-bedroom property. California residents pay even more!
In addition to student loans and high rent, there are other struggles the Millennials must face as well. In this economy it is not only to get a job, but to keep a job as well! This does not allow one to even begin to save money! This means that they are unable to save enough for a down-payment on a house. If their credit is bad, and their debt-to-income ratio is high, it may be impossible for them to get a home for a very long time.
Next week, more information will be revealed about Elizabeth Grey’s study and Generation Rent. The more we are informed, perhaps the more we can make better decisions in the rest of our lives and help others do the same along the way! Parenting is hard, being a young adult seems to be even harder!