Looking into millennial behavior and trying to compare it to that of the previous generation is nothing new. We are always trying to see how they differ, in which areas they are better and where they are lagging behind. This is no different when it comes to real estate.
So, what is the truth? Are millennials killing the home-buying industry as well? Do they actually prefer renting or would they consider buying a house? Well, the truth is that this generation, just like all of those that came before, consists of individuals who all have different preferences and goals in life. This is why we can easily come to the conclusion that millennials “swing both ways”. Read on to learn more.
Why do Millennials buy homes?
While the rate of homeowners aged 25 to 34 is lower among Gen Y when compared to baby boomers and Gen X when they were the same age, it would be very unfair to say that millennials don’t buy homes. They do, they just prefer not to rush into things. Here are some of the reasons that can lead this generation to become property owners.
They are starting a family
Most people want to put down some roots once they find the right person they will spend the rest of their life with – and millennials are the same. The assumption that they are killing marriage is simply not true. Large numbers of individuals are still getting married and doing this is one of the greatest motivations for buying their own home. However, the fact that this generation is delaying this chapter of their life and settling down much later than their predecessors makes it feel as if they are not considering real estate ownership as an option. Once they decide to start a family and have kids, they are sure to look for a place that will be more expensive, in a quality neighborhood, near a good school and well-connected – there’s no doubt about it.
They’ve found the right place
On the other hand, there are also those individuals who do not plan on marrying but are still looking for some stability in their life. They have a good job which they expect to last for a long while, they like the city they live in and are happy with where they are. All of these factors can influence a millennial to purchase a home. Keep in mind that there is no rule saying they have to get a house – maybe they’ve found an apartment that fits all their needs and they decide to settle down. In case this happens, millennials are very savvy money-wise and will look into all the options they have in front of them. From learning more about home loans to seeing how much they could potentially borrow from their family, they will carefully consider all options before they make a decision in order to ensure they can afford it.
Why does this generation opt for renting?
Of course, there is the other side of this coin as well. While some millennials strive towards purchasing a home regardless of how “late” it might be, some simply don’t want this for themselves or think that they will never be able to achieve it.
They can’t afford to buy
Even though some individuals wish to own a property that is only theirs, they are currently in such a situation that it seems that they will never be able to reach this goal. Unfortunately, there are many reasons for this. For one, many people are burdened with their student loan debt and struggle with repaying it as is. Adding more debt into the equation can only result in a disaster which is why they plan to deal with their student debt first. Furthermore, even if they aren’t already in debt, it might be hard to get a loan or mortgage due to their financial situation. They might not have a stable job, maybe their credit score is poor or they don’t want to ask their family for help in order to prove themselves. Finally, another reason why they might not able to save enough for a down payment is the fact that their rent is too high, which means that they can’t put enough money aside.
They don’t want to settle down
Then again, some people simply don’t want to settle down. They are not interested in buying a home or getting married. These millennials like living in the moment and going with the flow. This kind of lifestyle means that they prefer renting because it allows them to move whenever they want and to go wherever the wind takes them. Perhaps they are digital nomads who travel the world while working and looking for new experiences and opportunities. This approach to accommodation benefits them as they can rent for as long as they like and easily move on. Furthermore, another great benefit of renting instead of owning is that they don’t have to deal with the maintenance and repairs of a home – they simply let the landlord handle it.
As you can see, there are many approaches your typical millennial can take when it comes to housing options. Some wish to settle down and work towards achieving this goal however they can, while some take their time to make sure they are not making a mistake. Others simply don’t have the desire to stop experiencing new things and thus opt for renting and the relative freedom it affords. All in all, while there are all sorts of people and decisions, you can rest assured that millennials, just like any other group, want to be able to have a safe and secure place of residence, be it their own or otherwise.