Millennials are all the talk these days. They’ve been deemed “the generation to watch” and everyone from analysts to business leaders is tracking their habits in order to better reach the nation’s largest nation. It’s commonly reported that Millennials aren’t buying homes—they have too much student debt; they don’t want to be tied down; the list of reasons goes on. We’re here to tell you they are buying homes and here’s why:
1. They’re becoming more financially savvy. As Millennials age, many of them are entering their late twenties to mid thirties. At this stage of life, their romantic relationships are getting a little more serious, they might be newly married and have one or two kids… With these responsibilities come more bills to pay and mouths to feed. As a result, they’re spending less on trips to Europe and late night cravings and more on Costco groceries and monthly payments on a midsize sedan. They have to be more thoughtful about their purchases and this includes their dwelling. As they get older and their responsibilities increase, they’re becoming more interested in investing and they’re learning that buying is a better investment than renting. When it comes to living situations, their student loan debt has forced them to be frugal and practical (even though their ideals aren’t). Once they learn that buying a house is financially practical, a good long-term investment, and possible with low down payment options and relaxed debt requirements, we predict they’ll soon turn to homeownership.
2. They’re outgrowing the sharing economy. Last year, we talked about Millennials being the pioneers of the sharing economy—this just means they’re not buying goods and services as much as they’re sharing them. The benefit of this trend is access without ownership, which makes for maximum convenience at low cost. Some examples of this are transportation services like Uber and Lyft or cloud-based storage like Google Drive and Dropbox. Millennials simply pay a smaller fee for a service or good that someone else owns and manages. However, as they grow up, they’re growing more independent and, consequently, more tired of waiting on people (think waiting for a car ride, like transportation services, or waiting for apartment bills to be paid, like having a roommate who handles the bills but rarely pays them on time). Millennials are tired of relying on other people and they’re realizing that ownership is a beautiful thing that grants them more independence. And while sharing is convenient, low risk, and low responsibility, it pales in comparison to the glory of ownership.
3. They want more room for their pets. This is no joke! Millennials are dog-lovers (hello dog moms and dads!) and their pooches need room to roam. For Millennials, their dog is a part of the family. They have a serious love for their animals, but it may seem to them that their apartment management doesn’t feel the same. Many apartment companies have a separate fee for pets—typically a one-time fee around $200–$350 plus a monthly fee that could be anywhere from $10–$45. This is highway robbery for a Millennial who feels their pet is just as much a part of their household as they are. In addition to sky-high fees, many apartment complexes just don’t have the outdoor space for their residents’ dogs to roam. Millennials don’t mind the dog park, but it’s much more convenient to let the dog out in their own backyard.
So Millennials are starting to buy homes. Why do we care? Well, the homeownership rate is a good indication of many economic factors. Think about it: when you buy a home, you need a steady source of income, good credit, money for a down payment, etc. All of this demonstrates financial stability and the ability to repay—characteristics that might not be true of Millennials if the economy wasn’t doing well. Are you a Millennial who’s ready to take the plunge and buy your first home? We’d love to help! Give us a call and let’s get started.