Owning a home is one of the great American dreams, but something is happening within the millennial generation. What used to be a coveted accomplishment, homeownership, is not something has is being put off for years. From a personal perspective, one might think this is an excellent “financial conscience” move.
However, this decision is happening across millennials and is one that does not just affect the individual, but the economy has a whole.
When you look at the basics of economics, supply and demand are what makes the world go round. When a consumer purchases a good, in this case, a house, money is put back into the economy. When people decide to save their money and spend less, the economy feels it.
Because Millennials are waiting longer and longer to purchase homes and instead choosing to rent or even live with parents is causing a significant shift in the real estate market.
The glut of homes is feeling the hit, and there is more supply than demand is some areas. This is good for property investors as the property values are on the downturn, but for the economy and those in real estate it can seem slim pickings to find a qualified buyer.
Why are millennials waiting to buy homes (don’t forget to check out last week’s post, Sooner and Later)? The main reason is that the job market is spars and college graduates are finding it hard to get a job. Combine that with overwhelming school loan debt, and you have individuals not able to qualify for home buying.
The rise of college loan debt and consumer credit card debt with college students is outrageous and is affecting our economy as the whole.
Another reason that could be contributing to millennials not purchasing a home early on is they are only not settling down as their proceeding generation. The normal age of marriage for millennials is early to mid-30 instead of the beginning of the twenties. For a single person, renting an apartment or home is an easier more free method of living.
Why would they want something as permanent as owning a home if they don’t know where they will be in a year because they have not settled down.
It is something to consider and a way the millennials are set apart from the previous generation like the baby boomers.
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