A Quick Look at Why Many Millennials are Not Homeowners
Millennials tend to tick all the right boxes when it comes to adapting to the times. However, homeownership has proven to be elusive for many of them. A report compiled by a policy research group, the Urban Institute has shed light on a number of reasons why.
An Urban Institute representative, Laurie Goodman, noted that her generation -the baby boomers – tended to buy homes as soon as they were capable. She mentioned that at times, some resorted to missing a couple of vacations just to save sufficient funds to make a downpayment on their first homes. In contrast, she’s noted that millennials are in no apparent hurry to get possess property.
Analysts believe that delayed marriages have a massive effect on the homeownership rate. They have noted that marriages increase the likelihood of people settling down in the comfort of their own homes. In contemporary times, the median age for first marriages is almost 30. Millennials are 3 times less likely to become hitched when compared to individuals who are now in the later stages of their lives, 70s and 80s.
As Goodman shared, homeownership is the number one objective for many married couples since it represents a haven to live out the rest of their lives. She shared that many single people have the belief that there’s more to come in their lives. As a consequence, many are still hopeful of finding someone to connect with.
Researchers were able to ascertain that having children increased the odds of homeownership by a whopping 6 percent. Of importance is also the fact that millennials are nowadays more diverse than ever. Compared to white Americans, the black, Hispanic and Asian-American communities were less likely to pursue homeownership.
Goodman also took note of the fact that homeownership levels among black Americans was on the way down. The numbers are simply mind-boggling. When reviewing millennials aged 18-34, researchers established that 39 percent of white Americans were likely to settle down in the comforts of a home. This number contrasts to the 14.5 percent of black Americans willing to take pride in homeownership.
Another factor that has been said to have an effect on home ownership is student debt. Urban Institute researchers discovered that if the level of student debt rose from $50,000 to $100,000, one’s odds of homeownership decline by an incredible 15 percent. While this is true, the researchers also realized that millennials with a college degree stood a better chance at owning a home than those who didn’t. Factors like unstable incomes and the ever-rising rent prices were attributed to being key factors.
The numbers show that about 50 percent of individuals aged 18-34, struggled to pay up their rent. Incredibly, Goodman and her team of researchers stumbled on an interesting stat. They were able to see that individuals who grew up in a home setting had better odds, about 10 percent, of owning a home than individuals whose parents weren’t homeowners. They believe that the reason for this odd statistic is the fact that the concept of a home has already been ingrained in the young minds. She shared that most tend to envisage the home setting as a sign of stability and achievement.
Still, Goodman has reason to be optimistic. While the rate of homeownership among millennials has nosedived, she believes that the numbers will improve as millennials get older. The only problem is that many millennials are amassing wealth at a slower rate compared to older generations.
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