Millennials, the largest generation in Western history with a population of approximately 80 million people, is anyone born between 1981 and 1996. According to this range, in 2018 the millennial generation will be between the ages of 22 and 37 years old. Often defined as adventurous and impatient, this aging generation has been named the reason as to why the rental vacancy rates have decreased over the years. Harvard University’s Joint Center for Housing Studies projections suggest that overall household growth will be strong over the next 10 years as increasing numbers of the large millennial generation reach adulthood.
With their flexible nature, millenials are notorious for “jumping” whether it would be homes, jobs, or travel spots, which makes renting a more suitable option for this generation. Although home owning can be seen as a major life milestone, for many millennials, renting is more suitable from their lifestyle. A Rent.com survey of 1,000 renters between the ages of 18 and 34 found that nearly eight out of 10 don’t plan on trading their apartments for homes anytime soon. As a property management company, we have found several reasons as to why millennials rent at a higher rates than those in previous generations:
Lasting from December 2007 to June 2009, The Great Recession is to blame for a series of damages, such as higher unemployment, lower wages and incomes, lost opportunities, and education achievement. Because of these effects, millennials find themselves in a large amount of student loan debt with a restricted job market and limited prospects. Therefore important financial decisions, such as buying a home, are postponed or not sought out.
Also, with student loan debt causing damage to many millennial’s bank accounts, it should be no surprise that they prefer monthly rent payments to acquiring more debt, like a mortgage. Although mortgages can often be lower than rent costs, closing costs, insurance payments, and taxes can add up quickly, making renting a more cost-efficient option.
Postponing a Family Life
According to the article, Millennials Want Jobs and Education, Not Marriage and Kids, in 1975, 8 in 10 people were married by the time they turned 30. Now, 8 in 10 are married by the time they turn 45. A significantly larger percentage of millennials are delaying marriage, whether this would be due to their want to discover a different lifestyle, pursue their career, or travel. Since there is a lack of pressure to adhere to a family lifestyle, this dramatically influences the need for home buying.
Whether it be traveling overseas, finding a new job, or moving across town, being able to pick up and go is highly desired among millennials. A mortgage is viewed as a way to “settle down” or “being tied” to a specific area and does not allow this generation to pursue their dream job across the country on a whim. Renting allows flexibility and a way for them to preview the neighborhood before choosing to commit to a long-term financial decision. Living downtown next to the cities hottest bars may be nice in your twenties, but may not seem as great when you start pursuing a different lifestyle and renting helps with choices of this nature.
Not owning the property that you reside takes away many of the responsibilities that homeowners have to deal with on a consistent basis. Repairs, upkeep, and yard work are only a few things that require money and time when it comes to maintaining a home. If you are a tenant, many of these responsibilities are handled by the landlord or property manager. This isn’t to say that millennials do not like having responsibilities, but allows them to have more time and funds to travel and explore. Many millenials are diligent and hardworking individuals and value the time away from the office, which, if someone is mowing your lawn every week, gives you that extra hour to focus on yourself.
Not all millennials are a cookie cutter version of what is described above, some do choose to settle down and purchase a home right away. So, to buy or not to buy, has no concrete answer, but personal factors and lifestyle can dramatically influence which one would be ideal for you. If you are considering renting a commercial or residential property in the Asheboro, NC region, check out our listings from Schwarz properties here: https://www.schwarzproperties.net/property-type/residential/