Why Is Homeownership Among Millennials at an All-Time Low?
The traditional life path that many people followed for years was “Go to college, get a job, get married, buy your home and spend 20-25 years paying off the mortgage.” We see Millennials doing all of those things except for owning their own house. In fact, homeownership amongst this age group is at an all-time low. Experts are currently unsure if this trend will change direction in the near future.
While this statistic may be alarming, it is rather easy to deduce how we have arrived at this point.
Let’s start with the fact that it is now harder than ever for college graduates to find a job that is related to their degree. On top of that, many are struggling to find any sort of employment. It is common for Millennials to go through multiple jobs until they are able to land something that is more permanent and representative of a career.
Secondly, the college tuition rates are rising every year without any sign of slowing down. Millennials are graduating with tens of thousands of dollars in debt that may never be paid off in their lifetime. Most of them find themselves unable to pay their loans off fast enough and the debt simply continues to rise due to the accumulation of interest.
When you couple those two factors together, the picture becomes far clearer: Millennials are simply unable to afford the cost and responsibility of owning their own home. This problem is exacerbated in cities like San Francisco and New York where the housing prices are among the most expensive in the U.S.
How are Millennials going to pay off their debts and save up money for a home in the future? They will usually split the rent with their friends in order to save money on living costs. Failing that, they will live with their parents until they can save enough money to pay off their college debts, buy a house, or do both at the same time.
It is simply not feasible for many Millennials to own a house from a financial perspective. There are many problems that need to be fixed in order to increase homeownership amongst this age group. Everything is getting more expensive and Millennials find it challenging to adjust to the financial hardship of paying off large debts and finding stable employment.
Why do you think homeownership is at an all-time low for Millennials? Leave your thoughts on social!
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