Millennials and Home Buying: What’s the Situation?
There is a rather large myth surrounding millennials and home buying. There’s this idea that millennials have no interest in purchasing a home. The truth is, millennials want to buy! Just like previous generations, millennials want the security of owning and living in a home – just not yet. Millennials feel that they cannot afford to purchase a home, nor is it a main priority for them at this time in their lives.
First things first, it is important to realize that homebuying is down amongst all age groups. With different reasoning for each generation, millennials are not purchasing homes due to debt, credit score, income, and unfortunately unemployment. Seeing as it’s rather difficult to find a job these days, millennials are facing numerous obstacles in their home purchasing journey; choosing to postpone the entire experience.
- Debt: Though they might be in debt for various reasons, the most common factor is student loans. Unfortunately many millennials are still paying back student loans, which results in a less disposable income.
- Credit score: Due to numerous factors, having a bad credit score makes it difficult for anyone to receive a bank loan; which in turn makes it difficult to purchase a home.
- Income vs. Payments: Without a stable income, and with constant payments for rent, car insurance, etc. it is difficult for millennials to balance and prioritize their income and payments. This leads to debt and back credit score, which results in a lower chance of them being able to purchase a home.
As they’re getting married later, buying a home in their early, even mid, 20’s is not a priority. With millennials pursuing further education, resulting in them staying in school longer, travelling and taking time to become financially secure, buying a home is not something they’re thinking about until they hit their 30’s. Many millennials are choosing to rent, not only becasue they feel they cannot afford to purchase a home, but because of lack of security in their jobs and lives. Many millennials are choosing to move to larger cities, moving around for place to place, and exploring various opportunities. Because of this, buying a home is not something that is seen as a priority.
Don’t Forget About Them!
With this said, it is important to not forget about millennials. Although they may not be purchasing at this moment, it is safe to say they will eventually!