While the baby boomer generation dreamed of owning suburban homes behind white picket fences, a new study shows that this isn’t the reality for millennials.
A recent survey showed nearly 62 percent of millennials would rather rent than own and of those individuals polled, two-thirds said they currently rent with family members or roommates.
Many people speculate that millennials are opting to rent rather than buy because of the state of the economy. Obviously, the economy plays a role but there are other factors believed to be contributing to the decline in home ownership amongst this demographic.
So, what might be contributing to millennials choice to rent instead of buy?
According to the Consumer Financial Protection Bureau, Americans owe roughly $1.4 trillion on school loans, 67 percent of it is owed by people younger than 40. This coupled with skyrocketing home values, hovering mortgage rates and median wages has left many millennials who would have bought homes living at home longer or choosing to rent.
Aside from debt, social and cultural factors are also to blame for the trend. Here are some of the things more millennials are considering.
These days, being geographically flexible (taking freelance projects, short-term gigs and other job opportunities as they become available) may be one of the more valuable tools for earning a stable income. Younger people are more career conscious, spending more time and effort on being successful at a younger age.
Owning a house and being tied down could limit a millennial’s ability to advance their professional life. So, many millennials are content renting, allowing them to pick up and move across the country at the drop of the hat for a new job.
In the past, part of the “American Dream” meant owning your own house with four walls and a yard. Today, millennial’s are seeking different housing preferences than previous generations.
In fact, a recent study showed that nearly 60 percent of millennials prefer to be near shops, restaurants, offices, and transit.
Let’s face it, the younger generation is on the go. Between multiple jobs, relationships and extracurricular activities, many of these people simply don’t have the time to commit to taking care of a home. If you choose to rent, you can decide how to approach maintenance, either doing it yourself or calling your landlord for maintenance issues or home improvements.
The mind set of this younger generation has certainly changed. While many continue to consider renting over buying, there are still those individuals who desire own their own house.
Not sure which option is right for you?
Consider the following before making a decision.
- Budget. Whether you are looking to buy or rent, having the finances in place is crucial. Start saving early and think about the other financial obligations you have and if it would hinder you making your monthly payments.
- Location, location, location. There is a lot more that goes into finding a good home. Make sure to check what amenities are available and what’s nearby before making a final decision.
- Commitment. Both renting and buying a home require some type of commitment. Whether long or short term, considering your personal and professional situation before settling on the option that is best for you.