As millennials grow older, many Americans are curious as to how Gen Y’s current predicament will impact aspects of the recovering U.S. economy including investing, the job and housing markets, and particularly home ownership.
Since this demographic is crushed under student loan debt, it’s been said that home ownership will end with millennials. After all, they were firsthand witnesses to the devastating effects the Great Recession had on their parents’ and grandparents’ finances.
However, it isn’t a lack of desire to become homeowners that’s turning millennials off to the housing market. Many simply aren’t in a position to buy a house due to their financial circumstances, and won’t be for quite some time. In turn, this may cause home prices and mortgage rates to drop, benefiting those who are ready to purchase a home.
Renting allows an individual to enjoy a luxurious, high quality living space for an affordable price, making it popular among millennials, especially those living in metropolitan areas where renting with roommates is simply a way of life.
Massive amounts of student loan debt, a highly competitive and weak job market, combined with a tendency to marry later than past generations, have contributed to millennials putting home ownership on the back burner. Millennials want to own homes, but they just aren’t able to do so right now.
A survey conducted by real estate website Zillow revealed that participants between the ages of 18 and 34 were firm in their belief that owning a home is necessary to becoming a respected member of society, living a good life, and achieving the American dream that previous generations relentlessly chased.
Even if millennials really don’t want to become homeowners, the basic rule of supply and demand will make it necessary for the housing market to become more affordable — and also more desirable.
