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USA Real Estate Blog

A Majority of Millennials are Delaying Homeownership

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Photo by Julián Gentilezza on Unsplash

Here’s why: the environmental press for young people today is out of sync with a viable future.

I write about future trends and in an era of better marketing, generational trends depict real changes in society on sociological levels.

Millennials also need to understand their own situation in absolutely the most pragmatic terms. Here I’m talking about the world of money, economics and the way we see our future. I’m not on Medium to spoon feed you some inspirational message.

Since the great recession of 2008, the future of “adulting” has changed dramatically. When you search about Millennials delaying aspects of their lives, it’s a sad list:

What Google tells is the way we used to mark stages of our independence and early markers of adulthood are changing.

For many of us struggling with student debt, higher urban housing costs and stagnant wage growth, this means not just delayed homeownership, but an exodus from expensive big cities.

Over 60% of Millennials Have Delayed Homeownership

The rules have changed for young people in today’s version of capitalism. The once fabled abundance mindset of the American dream has turned into a scarcity mindset for millions of Millennials, which has popularized things like minimalism and that idea that global travel is a new milestone.

Would you trade frequency vacation and travel experiences for the stability of homeownership? Many Millennials are making different choices from their parents and grandparents because we haven’t changed, but the world has.

Sixty-one percent of millennials said they’ve delayed buying a house because of student-loan debt, according to a SoFi survey.

That’s a really significant number, because Millennials are also more mobile than their parents or grandparents had to be. Moving state, exiting expensive cities just to be able to afford to have families is not uncommon or remaining single, delaying marriage entirely to some indefinite period.

This is what happens when there are student debt and cost of housing crises simultaneously. If by birth and accident you don’t inherit any wealth from your parents, your journey in the North American economy may not be filled with opportunity.

More millennials are ditching big US cities for the suburbs, and it shows just how dire the unaffordable housing crisis is. — Business Insider

Surveys are showing how this is taking place, and how Millennials must constantly adapt just to make ends meet and build a better future. Yet this very concept of youth is extending far into adulthood in the technological era which was supposed to offer up more opportunity and GDP growth.

Millennials Continue to Leave Big Cities

Around 27,000 young adults moved away from major US cities in 2017, reported Janet Adamy and Paul Overberg of The Wall Street Journal.

  • Student-loan debt and skyrocketing housing prices make homeownership unaffordable for many millennials.
  • We experience capitalism as a crippling inequality instead of an American dream in 2019, and there’s no reason to hope it will get better.
  • Aging populations, ballooning healthcare costs and rising tuition rates are going to get expensive for society.

Economic trends are making “adulting” more difficult for everyone including Gen Z, the generation that comes after Millennials, who are now graduating from college and entering a new kind of workforce.

While skills shortages will exist, machine intelligence and new advances in technology will make many job positions and tasks obsolete, putting stress on the labor market in fields like transportation, retail, finance and even some of the most “people” jobs we once considered untouchable by Artificial Intelligence over the next 20 years.

Even knowing if we are Middle Class is becoming more difficult.

TL; DR: the Fed found that student-loan debt is linked to more than 20% of the decline in homeownership among adults from 2005 to 2014.

When you delay milestones of adulting what happens to your life? You remain single, your career takes longer to define itself, your debt to income ratio remains high, you begin to realize you may never have a “normal life” as your parents or grandparents thought of life.

The nuclear family is in decline in America. The choices highly educated Millennial female professionals are making are also changing life for all of us globally, including the future of consumerism.

Young people we are delaying life, basically, because we cannot afford it. Sixty-one percent of millennials said they’ve delayed buying a house because of their student-loan debt, according to a new survey by personal finance company SoFi. The survey polled more than 1,000 Americans ages 22 to 35.

But that’s not the only major life milestone they’re delaying because of student-loan debt. Of the survey respondents,

  • 61% of Millennials delay buying a house due to student-loan debt
  • 39% of Millennials delay moving to another city
  • 35% of Millennials delay starting a family

If student loan and credit card debt is the bar, what is the solution for the economic uncertainty of life for young people in the new Capitalism?

While Gen Z (Greta’s team) protests the 7th great extinction of the planet caused by humanity on biodiversity on Earth, Millennials are nearly too busy with their own self crisis to care that much. What do I mean by this?

Is the New Matrix of Capitalism an Affordability Crisis?

Millennials are facing what some term a “Great American Affordability Crisis” — that is, they’re financially behind from the aftermath of the Great Recession of 2018. For many of us, we’ll never recover from how 2008 changed our place in the system, our careers and our lifetime earning prospects. The economic, mental health and emotional costs are high.

So in dealing with a higher cost of living than previous generations were, student-loan debt just weighs these problems down even more. It invariably leads to delaying home ownership, starting families and even dating (seriously).

This isn’t just an individual problem, this is a flaw in society in a version of capitalism that has become more exploitive of young people and the aspirational American Dream.

The United States’ total national student debt was over $1.5 trillion, and the average student-loan debt per graduating student who took out loans was $29,800, in 2018, according to Student Loan Hero.

What happens when we retreat from major cities because we cannot afford them? Millennials who are victims of the Great Recession are like a new class in American society. If we want a family and a more balanced life, we have to make hard choices.

The reality for young people today forces us to suffer in our housing because the the high cost of living and unaffordable housing are pushing millennials to the outer suburbs. So for example, even so called “rich millennials” are ditching expensive cities, like New York City, in favor of more affordable places, like Dallas.

It’s all about finding the right work-life balance for you, our optimal place in the world and, in the world of “late adulting”, we have a couple of decades longer to find the “tricks” that work best for us.

What’s becoming clear is that a 2020 Recession could be brutal for Millennials. Home ownership is a symbol of Millennials settling down, but even how we settle down is changing in fundamental ways. We’re staying single, we’re going solo and Gen Z as a generation of ruthless pragmatic individualists make Millennials look downright communal.

If in 2017, student loans cut down the number of homes the average buyer could afford by 10%, what will it be by 2025? Gen Z have to be more pragmatic also, depending on the severity of the 2020 or 2021 recession. In a better marketing world, the rules of capitalism get more intense and high-pressured for young people.

As Millennials mature and are ready to settle down and have families (albeit later in life) they are still following in baby boomers’ footsteps in moving to the suburbs, also belatedly — and on their own terms, being more selective about location. Millennials need to be smarter than ever in how they plan their future.

What’s the inevitable formula for Millennial and Gen Z living in this new capitalism?

  • The collision of all these factors has created an environment in which millennials are renting longer and buying later.
  • Going solo longer, dating less, fighting for social mobility longer, by getting even more educated.
  • Being more selective about geographical mobility, and moving to the suburbs when the time is right for the best life-work balance deal.

The 2019 Version of Capitalism Works Against You

If you think about it though, it really is a new kind of capitalism for young people, as the fundamental equation has changed in purely economic terms.

Not only do we have an affordability and student debt crisis, those buying their first home today will pay 39% more than first-time homebuyers did nearly 40 years ago.

It’s perfectly fine to delay dating, home ownership, having a family and settling down because you know it’s your entire generation that has less freedom due to economic uncertainty and monetary restraints, that’s just how the world works today.

If you wanted a different America I guess you’d end up voting for someone like Elizabeth Warren or Bernie Sanders, or you could just continue business as usual, renting and remaining single for the rest of your life.

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