Believe it or not, millennials are all grown up. Having entered the workforce in 2007/2008, they’ve been dealing with adult issues for almost a decade, and the crippling recession didn’t make it easy. It forced them to settle for low-wage employment, oftentimes competing with older, more experienced heads of households for those same jobs. It didn’t matter that they were overqualified.
Post-recession, college graduates burdened with high student loan debt were finding themselves lining up for the slim pickings offered by the job market. As the economy slowly recovers, millennials have been trying to find their place in a world that has changed significantly. The real estate market is also on the upswing and many are thinking about purchasing their first homes.
And thinking, and thinking, and thinking…
It’s not because they don’t want to buy. A good number of millennials feel they simply can’t invest at this time. Could this be one of the reasons our country’s overall homeownership rate is at an all-time low since 1965? Experts think so.
Why are they vacillating? There are several reasons, a few of which we’ll discuss in this article.
The caveat: high demand for city homes is driving prices through the roof and out of reach of those who want these properties most.
Student loans and insufficient income to pay off debts is one reason real estate investment has been delayed for millennials. They simply can’t get out from under. For many, even though home prices have been lower, their income is too low to save for a down payment. Many live paycheck to paycheck. Rising rental costs create another stumbling block on the road toward homeownership.
With city living costs escalating, you might think millennials would be moving to suburban areas to buy their first homes. To the contrary, unlike the urban flight of past generations, they are moving into big cities at a fast rate. Access to public transportation and resources, along with the idea of being close enough in proximity to work to bike or walk make city life more appealing. The caveat: high demand for city homes is driving prices through the roof and out of reach of those who want these properties most.
It’s obvious that a shift is overdue. Millennials were, unfortunately, front and center during the economic downturn and shake-ups in the real estate industry. Their generation is the most impacted by the query, “Where do we go from here?”
In our next article, Pete will discuss what he believes needs to happen in order for millennials to benefit from real estate investment, both with homeownership and opportunities in the lucrative real estate investment business.