As we know, across the country, many cities are experiencing a complete decline in homeownership, as it relates to millennials. Since the recession in 2007/2008 it seems young people aren’t too anxious to purchase their own home. They say student debt is far too high for them to afford to purchase their first home.
Meanwhile, boomers and past generations still question whether buying a home is even a priority anymore. They can see that millennials are perfectly fine with living with their parents. Granted we all would love to never grow up and experience real life, the question becomes why. Is it still a matter of priority, safety, or are millennials just flat out broke?
After speaking with several millennial families and recent college graduates the truth is ALL THE ABOVE. Right now, student loans are at an ultimate high and still rising. While college graduates are in debt anywhere from $34,000 to hundreds of thousands of dollars in student loans, it’s safe to say their bank accounts can not afford to factor the lifestyle of a homeowner.
To them, being a homeowner isn’t as important as chasing financial freedom. According to CNBC, last year about 46% of millennials had less than $1000 in their savings. This tells us that even the majority of working, young adults are living paycheck to paycheck at minimum.
Not only are they saving less and less, as the world changes, it seems perspectives of life are becoming new. Millennials are taking a different approach when it comes to house shopping. They would rather pay $1800 a month for a rented condo than to buy it at $500,000. It seems more practical, less responsibility, and in hopes of moving, less stressful.
This brings an interesting point to my attention because if millennials aren’t saving up to buy homes, what will that trigger for the market itself? It has also been said that baby boomers who were expected to downsize in retirement years, instead are keeping their homes. This changes the narrative for real estate as a whole.
It makes me wonder who’s up next in real estate. Granted less responsibility sounds good, it also lessens the opportunity for complete control and ownership. It’s scary to think about how some millennials don’t value home ownership.
Although bills and student debt can be through the roof, how can we teach millennials how to plan for buying their first home? Since it seems that their funds are extremely tied up, due to what was meant to put them ahead, how do we teach and initiate true life savings?
It’s partially a matter of financial education. But how can we grab their attention in an area that they have no faith in. I believe free workshops in colleges and churches would be a start. Many times millennials need other millennials to prove importance. Therefore it’s also important for millennials in real estate to stand up and make it known that it’s cool to own your own.
As a 30 year old single mother college graduate, I feel the concern from both sides. For me, owning a “starter home” isn’t the first thing on my priority list, but investing in property, that can create revenue surely is. Yet, eliminating student loans and credit restoration is the first task at hand.
I personally believe the teaching of how property could work for you would be of interest to this generation. As millennials, we like to see and calculate ROI, rather than investing in what will ultimately be another set of bills out of our check.
I believe it’s going to take a little longer for millennials to grasp the importance of owning real estate but I believe when it begins to click, millennials will then begin to make a way out of no way. Real estate has many aspects and options. It’s important for more millennials to begin to talk about it.