There are a ton of theories about millennials and why they make the decisions they do.
They’re the first generation to grow up with the internet and numbers show that they’re taking it slower when it comes to purchasing their first home.
One third of millennials have returned home to live with their parents, and many others are opting to rent instead of buy.
The questions is, do millennials want to buy?
Or, are they turned off by the concept of being tied down geographically and financially?
Instead of sticking with theories, we decided to find out what millennials are thinking about feeling about the subject of home buying. Why are they? Why aren’t they?
It’s too big of an investment
Millennials, more than any other generation, value experiences over things. And, a home is a really, really big thing that costs a lot of money. Crystal, a millennial from the Pacific Northwest, shared her fears about homeownership on this Quora message board.
For me, personally, I just recently realized how little I wanted to own a home. It's just such a huge investment and after learning about the background of the market crash because of the housing market, I don't want to even touch it.
Crystal’s sentiments were echoed by Brandi Lalanne’s who said,
“Where am I going to get the magical money to own AND maintain a home with?”
The investment of homeownership is daunting, especially for millennials who are still paying off debt.
We want to own, but we don’t want the debt
In addition to not wanting to take on the investment or be tied down by such a large purchase, millennials simply don’t want to take on more debt. They have the desire to own, but with the burden of student debts, taking on even more seems impossible. Tyler Pasco wrote on another Quora forum,
“I don't think we value home ownership less. I think it's more that we value lack of more debt.”
Millennials recognize that times have changed, more people are going to college, and more jobs require advanced degrees. That all means more money and more debt. Tyler continued:
Generations prior to mine had the chance to earn a comfortable living with little more than a high school diploma. More and more, degrees are necessary. When that degree costs $50,000 in loans or more (often more than a hundred thousand), at higher interest than mortgages or title loans, there's no room to save for a $20,000 down payment on a home in a good job market with decent schools and low crime.
Renting is easier
Millennials like easy. They’ve cut the cord from cable in favor of streaming video and they opt for online shopping and subscription services over the mall. They value time and experiences and for many, the option of renting is simply less stressful. Crystal continued in her Quora post:
It's much easier to rent. I don't have to worry about replacing a water heater, fixing burst pipes, buying flood insurance, etc. That's more stress than I care to have in my life. Moreover, after your lease is up and you're going month-to-month, if something abrupt happens - you lose your job, a medical emergency, or you need to move in to take care of family - you can easily pack up your things and leave. With a mortgage over your head, you really can't prepare for those types of things.
We don’t want the homes our parents had
According to a post from Alexander on Quora, it isn’t that he doesn’t want to own, it’s that he doesn’t want to own on the same scale as his parents. He said,
“I would prefer to own some type of duplex. There is no way I will ever be able to afford a house like my parents had.”
[Photo credit] (https://shanehomes.files.wordpress.com)
We need more time
We asked Nashville native, Austin Tobak, why he hasn’t bought a home yet and the answer was simple,
“I don’t have the money for a down payment yet.”
Marriage age among millennials is at an all time high, 59 percent of millennials are single and have never been married. They’re waiting longer to settle down and therefore taking a bit longer to purchase a home.
In the end, it all comes down to the finances. Millennials watched the housing bubble burst and saw their parents and older friends lose so much. Add that to the burden of student debt and the added costs of maintaining a home and you’ve got millennials picturing themselves as Tom Hanks in The Money Pit.
The desire to own is there, but the underlying fear of failure and financial insecurity make acting on the desire more difficult for millennials.