It could be said that millennials are changing the American dream. Owning a home with a white picket fence is no longer the end goal for this generation. As Gen Y begins to establish their personal and professional lives, renting allows them the freedom to come and go as they please. Moreover, they wish to enjoy life instead of working hard trying to maintain a house, as empty nesters often do when they downsize. Renting presents an easier way of life.
This mentality differs from previous generations who saw homeownership as the ultimate objective. The current state of the market is also a factor that could be adding to the delay. Why do millennials rent instead of owning a home? Read on to find out!
1. Gen Y Is Drowning in Debt
Many individuals in this group are still trying to pay off college debt. This, coupled with the financial woes of the pandemic, can make it difficult for millennials to purchase a house. Although a monthly mortgage payment may be similar to monthly rent, buying a home also means forking over a 20% down payment. This could leave millennials less inclined to start a house hunt.
2. Millennials Move Often
Millennials are more mobile than previous generations. They like to travel and move more frequently, which makes owning a home too much of a financial anchor. Renting allows them the freedom and flexibility to come and go. Moreover, they believe working for the same company their whole career would be boring. They understand moving up the corporate ladder might also mean changing jobs or moving to another city.
3. Property Is Too Expensive in Desired Areas
Properties in cities and other popular areas are often costly. Oftentimes, the prices for homes in these locations are higher than the average income for the millennial generation. This is often why many individuals from this group live with their parents.
Additionally, many properties are selling for way over the asking price in today’s market. Millennials simply can’t afford it, especially if you factor in additional costs such as the down payment, property taxes, insurance and homeowner’s association fees.
4. Millennials Want to Enjoy Their Weekends
The thought of cutting the grass and fixing up the house on the weekend doesn’t appeal to Gen Y. They value their freedom and don’t want the responsibility of maintaining a home.
5. Millennials Are Settling Down Later in Life
While getting married and having children are goals that millennials desire, they are waiting to pursue them. Gen Y enjoys taking the time to discover what they want out of life first, before making a lifelong commitment to a home. Moreover, by delaying marriage and choosing to rent, they save money until the day finally comes to wed and buy a house.
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