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The funny thing is that most millennials I either work with or are younger siblings of my friends want nothing to do with anything involving mortgages and homeownership.
Where I work at least a third of our employees are less than 5 years out of college, putting them in the 22-27 year old range.
They either:
- Live in downtown/midtown/Corktown in apartments or rental properties with roommates (A handful live alone)
- Live in Royal Oak or Ferndale in a rental house with roommates
- Live at home with their parents out in the 'burbs
Mind you these are all people that are making $50-75k per year. None are married or really even seem to want to get married anytime soon. None have children or even think about having children. Some don't even own a car.
What we are talking about really are first time home buyers, but that age group is really now the 27-35 crowd. People in the early and mid-20s are simply not getting married, not settling down, not buying homes, and not entering into any sort of long term commitments.
The average age of people getting married now is 29 for men and 27 for women, and I'd venture this probably skews a bit higher if we are talking about young professionals. Yes, there are some single people who do buy houses and condos but they are also ones that have gotten to a place where there is some sort of stability in their life.
The funny thing is that most millennials I either work with or are younger siblings of my friends want nothing to do with anything involving mortgages and homeownership.
Where I work at least a third of our employees are less than 5 years out of college, putting them in the 22-27 year old range.
They either:
- Live in downtown/midtown/Corktown in apartments or rental properties with roommates (A handful live alone)
- Live in Royal Oak or Ferndale in a rental house with roommates
- Live at home with their parents out in the 'burbs
Mind you these are all people that are making $50-75k per year. None are married or really even seem to want to get married anytime soon. None have children or even think about having children. Some don't even own a car.
What we are talking about really are first time home buyers, but that age group is really now the 27-35 crowd. People in the early and mid-20s are simply not getting married, not settling down, not buying homes, and not entering into any sort of long term commitments.
The average age of people getting married now is 29 for men and 27 for women, and I'd venture this probably skews a bit higher if we are talking about young professionals. Yes, there are some single people who do buy houses and condos but they are also ones that have gotten to a place where there is some sort of stability in their life.
I agree. I would say the homebuyers in this market are older millennials who are either starting families or planning to start families. And I think it's much more accurate to say that they're buying the typical 1,000 square foot ranches in mid-tier (not top 10) school districts like Livonia. CJ's description is way over the top.
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Quote:
Originally Posted by DTWflyer
The funny thing is that most millennials I either work with or are younger siblings of my friends want nothing to do with anything involving mortgages and homeownership.
Where I work at least a third of our employees are less than 5 years out of college, putting them in the 22-27 year old range.
They either:
- Live in downtown/midtown/Corktown in apartments or rental properties with roommates (A handful live alone)
- Live in Royal Oak or Ferndale in a rental house with roommates
- Live at home with their parents out in the 'burbs
Mind you these are all people that are making $50-75k per year. None are married or really even seem to want to get married anytime soon. None have children or even think about having children. Some don't even own a car.
What we are talking about really are first time home buyers, but that age group is really now the 27-35 crowd. People in the early and mid-20s are simply not getting married, not settling down, not buying homes, and not entering into any sort of long term commitments.
The average age of people getting married now is 29 for men and 27 for women, and I'd venture this probably skews a bit higher if we are talking about young professionals. Yes, there are some single people who do buy houses and condos but they are also ones that have gotten to a place where there is some sort of stability in their life.
They sound smart. They're in their 20s. They shouldn't be thinking about marriage yet. And by renting their keeping mobile with their careers and education. I lived in 5 states for jobs and school by 32, and a couple more since.
Do you honestly think this is an accurate portrayal of an entire generation?
No I think that is what this thread is telling me (and the article to some extent). OK I am maybe exaggerating a little bit, I have not actually herd millennials claim they are entitled to three masseuses or masseurs for neighbors in such a cheap house.
It is like there is some sort of shock. 25 year olds now cannot buy a nice house int he top suburbs. Why is that new? When could they ever. You can pretty much end that sentence with "buy a house" There is nothing new here nothing unique to this generation or to these times. Most 25 year old have always had to wait to be able to buy a house, at least since I have been alive. Maybe post WWII veterans were able to buy homes at an early age, I do not know. However they were not nice homes, they were mass produced matching cracker boxes that were 700 - 900 s.f. .
What I think is interesting is a shift in trends in home buying. When I finished college in early/mid-2000s and eventually returned in Michigan we were in the early staged of the real estate bubble and in the peak home building years in Southeast Michigan.
Sure most people that were 22-23 were living in apartments, but many people in my age group were buying up condos, "starter"homes in Royal Oak/Berkley, and buying real estate as it was ingrained about how it was a such a good investment and could never loose value. I had many single friends buying up places around town.
Then things got pretty silly as buy 2006/2007 I knew people with barely a $40k salary buying new-construction $250-$300k homes up in Shelby, Macomb Twp areas with like zero down and ARMs. That was right before the bubble burst.
Fast forward 10 years later. Many of those people who bought houses or condos back in the early/mid 2000s either couldn't sell them, or took a significant loss. Condos in suburbs like Rochester Hills, Troy, Shelby, etc were taking a long time to sell or even just break even. I know couples who got married and each brought a house or condo to the marriage, ended up turning one of them into a rental and would love to sell the other one off. And some of those people who were buying $300k new builds in 2007, some wanted to move out of state but were handcuffed by their mortgage, others stuck with it got a new job but are stuck with horrendous commutes.
It seems like the younger generation is a bit smarter than those who came of age in the early 2000s and fell for the "everyone needs to buy real estate" hook, line, and sinker prior to the downturn and housing bubble collapse.
The home builder-developer-real estate military industrial complex would love for Southeast Michigan to revert back to the way things were in 1998 or 2005. Truth is they've mostly run out of large tracts of viable land in any sort of reasonable commuting distance to plow over and their target demographic isn't buying houses the way they were a generation ago.
They realize that relying on their gravy-train of building $400-600k McMansions in Canton, Novi, Lyon Township, or Washington Township can't sustain them forever.
Post-WWII they were was a huge boom of people in their early 20s buying homes, many of the mass produced bungalows under the GI bill / VA loans.
There was also a period from about 2003-2007 in the midst of the real estate bubble and all of the highly suspect lending practices were many in their early/mid 20s with a paycheck and a pulse could get financing and buy real estate under the false pretense that their incomes would always grow, their job would always be there, and their real estate would always appreciate in value.
No I think that is what this thread is telling me (and the article to some extent). OK I am maybe exaggerating a little bit, I have not actually herd millennials claim they are entitled to three masseuses or masseurs for neighbors in such a cheap house.
It is like there is some sort of shock. 25 year olds now cannot buy a nice house int he top suburbs. Why is that new? When could they ever. You can pretty much end that sentence with "buy a house" There is nothing new here nothing unique to this generation or to these times. Most 25 year old have always had to wait to be able to buy a house, at least since I have been alive. Maybe post WWII veterans were able to buy homes at an early age, I do not know. However they were not nice homes, they were mass produced matching cracker boxes that were 700 - 900 s.f. .
I agree, it is unrealistic for most to buy an awesome house in a top suburb at 25 years old. Last year, purchased my first house at 25 - it needs a lot of work, and isn't in one of the "hot and trendy" suburbs with awesome schools. But, it works for me, and it was something I was able to afford.
I do have to disagree with your point about nothing being new or unique to this generation - I think the student debt load has ballooned far beyond what it was for past generations, which hinders the ability for folks my age to buy a home. Personally, I wish I had avoided the student loan debt altogether and gone to community college and really leveraged other sources of funding, but hindsight is 20/20. The reality is a good deal of my generation is carrying around this black cloud of student loan debt over our heads, which hinders our purchasing power for the next 15-20 years at least.
With all that being said, I think a lot of folks in my generation need to taper their expectations of what their first home will look like for a variety of reasons, with the student loan debt being a primary one. I consider myself fortunate to be able to have bought a move-in ready house within 15 minutes of my office for under $90k. I know a lot of people my age expect the "perfect" house right away, so I can see where you're coming from.
I think a trend I've noticed among my friends is a sense of financial anxiety which prevents them from thinking about home ownership as the sort of investment or ladder that older people did/do. Everyone I know who is interested in purchasing a home is doing so under the assumption that it is final, that they are finding the place they plan to live in for the next 50 years.
If you look at a home purchase as being something like a car purchase, where you intend to continually trade up, it is easy to compromise on location or features. But if you lived through a period of extreme economic anxiety, emerged from it as an adult with a lot of debt and relatively low earning potential, you probably aren't as apt to see that 2 bedroom bungalow in a mediocre suburb as an investment that you can eventually swap out for a 3 bedroom family home down the line. After all, what if you lose your job? What if you never earn more than you are earning at 25? What if you buy a ****ty little Westland ranch and then that is it? No more fantasies of living in Ferndale or getting yourself a nice place with a deck and a basement. So if this generation is choosey, it's because there is deep seated FOMO rooted in the experience of living through the recession. In a world where an English degree from Michigan State only qualified one of my closest friends to be a receptionist at age 25, this seems like a real and honest fear.
I think a trend I've noticed among my friends is a sense of financial anxiety which prevents them from thinking about home ownership as the sort of investment or ladder that older people did/do. Everyone I know who is interested in purchasing a home is doing so under the assumption that it is final, that they are finding the place they plan to live in for the next 50 years.
If you look at a home purchase as being something like a car purchase, where you intend to continually trade up, it is easy to compromise on location or features. But if you lived through a period of extreme economic anxiety, emerged from it as an adult with a lot of debt and relatively low earning potential, you probably aren't as apt to see that 2 bedroom bungalow in a mediocre suburb as an investment that you can eventually swap out for a 3 bedroom family home down the line. After all, what if you lose your job? What if you never earn more than you are earning at 25? What if you buy a ****ty little Westland ranch and then that is it? No more fantasies of living in Ferndale or getting yourself a nice place with a deck and a basement. So if this generation is choosey, it's because there is deep seated FOMO rooted in the experience of living through the recession. In a world where an English degree from Michigan State only qualified one of my closest friends to be a receptionist at age 25, this seems like a real and honest fear.
Hopes of 5-8% appreciation aren't the only reason to buy a home. For virtually everyone, it serves as their largest single asset. Home ownership vs. renting is quite literally the choice between paying yourself every month or giving your money to someone else.
The only reasonable financial argument against home ownership is the idea that you could rent and put all the money you save on maintenance and property taxes into some other investment vehicle. Unfortunately that probably happens in about 1 in a million cases.
I asked many of those who I work with in Detroit if they owned a home. Most average $15 an hour and 90% said it was tough enough o pay $900 monthly rent, let alone get a few thousand together for a down payment and a $1000 month mortgage bill..
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