Why Aren’t Millennials Buying Homes?
Why do millennials prefer smartphones to owning homes? Flickr
Millennials consistently receive a lot of stick for either buying or not buying certain things. Some financial experts believe this demographic are spending too much money on brunch. Others believe they’re not spending their money on smart investments, like houses.
This brings us to the topic of discussion today; why aren’t millennials buying homes? When you compare people in the millennial age range to other demographics, you see there are far fewer of them actually owning properties. Instead, they seem to prefer to rent, but why is this?
There are a few reasons behind this, and it all starts with the idea of financial insecurity…
Millennials Are Financially Insecure
Clearly, most of the points made in this article are generalisations. Yes, some people in this demographic are financially secure and loving life. However, the broad landscape of millennials are living in a state of financial insecurity. They don’t always have a lot of money, which makes owning a property extremely hard.
After all, how will you buy a home if you don’t have lots of money? You’ll never be able to apply for a mortgage, so it’s not something you even begin to consider. The source of this insecurity can be narrowed down to one thing; student debt. The millennial era signifies the first era of people that are graduating from university with massive tuition fees to cover and vast piles of student debt. When you have tens of thousands of pounds in debt to pay, the last thing on your mind is a fancy new home.
Not only that, but a lot of millennials are finding it hard to nail down permanent jobs. We live in a world where freelance and part-time work is increasingly popular. As a result, some people struggle to have a fixed wage every month, which makes it hard to plan how to save for a home.
This generation is reluctant to sign away their life to a home. Max Pixel
Houses Aren’t Built For The Average Millennial
Another reason for the decline in homeownership amongst this group of people is that houses are just not on their agenda. For many millennials, a house is simply impractical. Loads of people are living alone or with one other person. Consequently, it just doesn’t make sense to put a massive deposit down on a house that you won’t really get the most use out of.
This is why a lot of young people choose to rent flats; it suits their lifestyle better. A flat close to a busy city presents loads of job opportunities and makes life more comfortable for you. You pay rent, but you’re paying for something that you’ll get the full use out of.
For me, this is a crucial reason behind the lack of homeownership in the millennial generation. If we wanted to see more millennials buy homes, then the way homes are built should change. Just take a look at the real estate options here over in the US, you’ll notice that a lot of them are custom built contemporary homes. If you give millennials the opportunity to buy a home that’s custom built, then there’s more chance of them buying it as they can customise it to their specific needs. Currently, there is an abundance of family homes – particularly old-style big Victorian houses – and they just don’t appeal to a millennial. They need homes that are suited to their lifestyle!
Millennials Don’t Stay Put
Following on from this idea of homes not suiting the millennial lifestyle, we can look at another critical trait of this generation; they love travelling. How many young people do you see on social media continually going travelling to different places? They work for a few years, then take a year out and travel the world, possibly even staying abroad for a couple more years because they like it so much.
I’m not saying there’s anything wrong with this; travelling is fantastic and we should all try it. However, it does explain why so few millennials buy homes. What’s the point in buying something that essentially keeps you rooted to one place? Sure, you can rent the house out when you’re away, but how do you know how long you’ll be away for?
It boils down to this concept of millennials enjoying a sense of freedom. They like to be able to just pick up their belongings and move whenever they want. Whether this means moving to a different city for a new job, moving around the world as they travel, or just moving into a different flat down the road. They don’t like the thought of owning property as it feels like a weight that keeps them firmly stuck in one place.
Millennials prefer living along. Max Pixel
Marriage And Children Isn’t On The Agenda
Perhaps an overlooked reason for this generation not buying homes is simply to do with the concept of family. Back in the day, people would settle down and start a family in their early twenties. It was almost seen as a crazy thing to see 30-year-olds that weren’t married and living in a home with their family. Nowadays, it’s completely different; millennials are waiting longer before settling down.
When you aren’t married and don’t have aspirations of starting a family, then your reasons for buying a home are limited. The only possible reason you have for buying one would be as an investment. However, millennials are more interested in other investment ideas rather than getting involved in real estate. The cryptocurrency craze is an excellent example of this.
More and more young people are living with their parents well into their twenties or renting apartments in busy cities near where they work. The prospect of marriage and children is not something on their minds, so homeownership takes a back seat.
Why does all of this matter? Who cares if millennials aren’t buying homes? Well, people that have invested in a property will care! We don’t want to live in a country where the property market completely crashes because a generation of people just isn’t buying homes. I think a few things need to change dramatically before we see millennials actively getting involved in the property market.