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Millennials, the demographic group aged between 26 and 41, appear to have their eyes wide open when it comes to home ownership.   Statistics show that they have less interest in the American Dream than either the generation before them, Generation X or even the Baby Boomers at the same age.   The reasons are varied.  At some level complicated, and to me, rather surprising. 

Millennials are the largest generation in Western history and simultaneously are the most talked about.  They have grown up totally immersed in a world of digital technology, which has shaped their identities at every level:-  socially, culturally and politically.   They are the most highly educated generation to date (with women leading the pack) when it comes to earning BA degrees.    Unlike generations before them they see no downside to the digital world, declaring it brings people closer together as opposed to the rest of us who feel that it’s the complete opposite.   That discussion or thought is for another time.   For now, let’s focus on why the millennials have less interest in owning a home at this stage in their lives.   

1. Education costs are a big factor.    Nearly ¾ of all millennials have substantial student debt and that alone means that their ability to save for a down payment as well as the capability to finance a home of their own is much more difficult.  This is a little surprising in today’s low interest environment but valid none the less.

2. Millennials are not rushing into marriage and are either staying at home with their parents longer or enjoying their status quo and choosing to share space with their peers.   Single life has become more acceptable and preferable for many.  Though stigmas have shifted, the economic system that incentivizes marriages has not.  Also we all know that “two people can live as cheaply as one”!

3. Banks aren’t making it very easy for this generation.  Quite simply they don’t want a repeat of 2008 and have tightened up their lending criteria.  If you’ve never applied for credit it’s tough to get approved for a mortgage in today’s world.  

4. And don’t let’s forget that for the last several years, it’s been a sellers’ market, and any buyer with or without the disadvantage of credit challenges, has been beaten out by cash buyers.   Some millennials understandably don’t have enough money to pay for a place in full.   The recent boom in home prices has only made it harder especially when cash is king.

5. The millennials are drawn to metropolitan areas rather than the suburbs.     They are willing to forego owning their own place in favor of the prospect of greater work opportunities as well as an active social life in urban America. Maintaining this bigger social network can be more expensive when you figure in dinners out with friends and drinks out with coworkers, not to mention Uber rides home.  All of this puts a dent in their bank account but it’s a tradeoff that makes sense to them.  They don’t seem tempted to explore rural or suburban areas where they could find more affordable housing as well as sellers who would be willing to negotiate.  

Never say never though, and just because millennials are choosing not to jump in with two feet to buy their own home as early as previous generations, they “get” it and know only two well that there’s nothing better than home sweet home.  They just don’t feel there’s any rush.  Honestly, it’s hard to argue with them.    Let them be single and carefree for as long as they want. What do you think?