- Millennials aged 25 to 34 have a home ownership rate that is nearly 8% lower than the baby boomers and generation X at the same age.
- A student loan is a major factor when it comes to making the decision to settle down.
Owning a home continues to elude Millennials by the millions.
According to the policy research group, the Urban Institute, there are a variety of reasons such as economic disadvantages and personal preferences, that help to explain why the Millennials have a lower ownership rate compared to the lower volume generations of their parents and grandparents.
Past generations made every effort to invest in a home as soon as possible, but with the Millennials, they don’t seem to be in any rush to becoming homeowners.
A major reason is likely to relate to delayed marriages. On average, a married couple is about 18% more likely to own a home compared to their single counterparts.
Weddings for Millennials are less and later. The average age in the 1960s to get married was the early 20s. However, this has changed to the 30s for the Millennials.
Investing in a first home gives a stable, safe and comfortable place to live for the long-term.
According to the National Association of Realtors, there are plenty of young people that wish to buy a home. For instance, nearly 16% of first time buyers are unmarried couples. Also, 25% of first-time buyers are single men and women. Latest studies indicate that about 57% of buyers new to the housing market are married. This compared to nearly 75% in the 1980s.
Many of today’s young generation aren’t rushing to have a baby. In 1990, the number of married couples with children (18-34 years old) was in the region of 37%. However, today this has reduced to about 25%. Also, the young people with a child can see an increase in home ownership by nearly 6%.
A further point of consideration is the fact today’s Millennials are a lot more diverse. For instance, the Asian-Americans, black and Hispanic are lower than the Caucasian Americans. An idea of the figures is 14.5% of black Americans are homeowners, while this increases to nearly 39% for Caucasian Millennials.
The rate of home ownership is seeing the most noticeable fall in the black American group.
Additionally, many of today’s Millennials are taking on high student debt, which further reduces the ability to buy a home. According to the Urban Institute, any student with a total debt in the region of $50,000 to $100,000 will see their ability to become a home owner fall nearly 15%.
There is also the issue of the Millennials with no college degree who are starting to fall further back mostly due to rising rents and unstable incomes.
Millennials are finding it difficult to save the required amount for a down payment because many are living in expensive locations. On average, the 18 to 34-year old will spend nearly 30% of the income on the monthly rent.
For the Millennials with parents as home owners, they have learned the value of home ownership, which can see a 10% increase in investing in a property sooner rather than later.
Many of these Millennials say that home ownership will give them greater stability throughout their life.
While it is expected that Millennials will invest in property in later life, they are in fact buying a home a lot later than in past generations. A consequence of this is that they are creating