On Wednesday, an article explaining the difficult position that Millennials are in these days where purchasing a home is concerned. Many Generation Y folk are even having a hard time affording their rent since they are just so darn far in debt because of schooling debt. Another contributing factor is the fact that the job market still has not returned to normal and the recession has not allowed for any type of relief at all!
The money situation for this generation has changed their minds on so many issues. The group as a whole has even decided to choose to rent over buying and they are doing so for longer periods of time. According to the Huffington Post a large portion of this decision is because people are choosing to marry later in life. In fact only 26% of 18- to 33-year-olds have chosen to marry. This percentage is significantly smaller than Generation X or that of the Baby Boomers.
Even a portion of the married Millennials have chosen to stay in rental properties whether or not they will eventually plan to buy a home. This decision has been determined many times because this generation of individuals has witnessed their family, friends and colleagues get burned by the housing bubble. They don’t want to join the rank of those experiencing upside-down mortgages or properties that can’t sell when they need to relocate. This generation of people agrees with the banks that are making more cautious decisions.
As Elizabeth Gray, the author of “Is Generation Rent threatening the American Dream?” states, potential buyers are tallying up the cost of mortgage payments, maintenance, taxes and insurance and finding that it’s just not worth it. Often already burdened by debt, many Millennials are reluctant to take on a financial commitment that could see them one missed bill or household disaster away from ruin.
Generation Y is finding out that renting has proven to have other benefits, too. These younger individuals, even if they want to buy, are losing their ground to older, more established people because they have bigger incomes and much more ability to have large savings accounts. Therefore the younger generation sticks with renting a more modern apartment, closer to where they work and socialize, with good public transit opportunities as opposed to buying in an area of fixer-uppers, many times in foreclosed neighborhoods that bear long commute times. Renting is much more attractive given these two choices.
Then renters of Generation Y stipulate that flexibility as one of their top lifestyle benefits. It is much easier to pick up and move – even with a long-term lease in place. The younger crowd wants to be able to pick up and go to where the jobs are as opposed to being tied down to a house. At this point, renting is a no-brainer for this age group.
All of this data presented, both on Wednesday and today may just be proving to parents everywhere that they should not be concerned about their Millennial children. Perhaps the American Dream is just changing rather than collapsing!