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One of the lingering consequences of the financial crisis is that young adults are launching their careers in a historically weak economy with limited wage growth and high underemployment. Millennials are clearly facing an uphill economic climb that differs greatly from that of their baby boomer parents. The statistics are concerning: $1.3 trillion in student loan debt outstanding, 14% of 25- to 34-year-olds living at home and historically low purchase activity from first-time homebuyers.
While gains in housing-related assets have been material in recent years despite weak purchase activity among young adults, demand will have to shift from investors to young adults for prolonged strength in the housing market. As a result, we believe that a proper understanding of the financial trajectory of the Millennials is critical to housing market assumptions over the secular horizon (three to five years) as well as for the broader economy.
In our view, the problem is not that these young adults will never grow up, get married, have children and buy real estate. Instead, we believe this to be a timing issue, not a structural roadblock; the path to traditional adulthood has simply been delayed for many Millennials. But over time the economy will overcome the burden of student debt, and pent-up demand for housing could surprise to the upside.
meh, in many areas, it is cheaper and more advantageous to rent in terms of social mobility. it costs over $200,000 to raise a kid from 0-18. and marriage is an archaic concept with far too much to lose.
this is the hipster generation. we reject societal norms of previous generations while taking a **** on anyone else who believes otherwise. and we're entitled hypocrites too.
this is the hipster generation. we reject societal norms of previous generations while taking a **** on anyone else who believes otherwise. and we're entitled hypocrites too.
Every generation prior to yours has said the exact same thing for as far back as history goes. You'll learn, boy will you learn, lol!
Ok, unless states restore funding to universities comparable to the levels of 20 years ago adjusted for inflation, students will continue to have big student loan burdens. Sure, Gen Y will pay their loans off eventually, but by then the next group (Gen Z?) will be in the same situation.
The way to fix this problem is NOT "wait it out". The way to fix it is to make higher education affordable once again.
Most of the faux outrage over the "millennial condition" can be summed up as follows:
1) A lot of them are living at home, therefore they will ALWAYS live at home
2) A lot of them are renting into their late 20's and 30's, therefore they will ALWAYS rent
3) A lot of them have high student loan debt, therefore they will ALWAYS have high student loan debt
4) A lot of them are underemployed, therefore they will ALWAYS be underemployed
We've definitely seen a shift, but there's no evidence the current situation will persist indefinitely.
As for the effects on the housing market, I think the biggest impact is that fewer millennials are willing to "drive until they qualify" in order to get into a starter home. Many don't even own cars and would rather pay a bit more in rent to keep it that way. As a result, I see no coincidence that the remote and poorly accessible housing areas tend to be the hardest hit. This generation didn't produce as many young adults that want to buy those homes even if they could. This I believe is a secular shift that will continue well beyond the current cycle. The other aspects probably not.
Every generation prior to yours has said the exact same thing for as far back as history goes. You'll learn, boy will you learn, lol!
never heard of prior generations calling themselves entitled hypocrites but whatever you say bud. not sure what you think i will be learning. i'll just attribute it to the older generation thinking all of us young'uns are naive idiots.
i am just trying to pay off my student loans, live frugally, and dump as much as possible into my 401k's/IRA so that i can check out of the rate race before i am too old to enjoy it. not trying to compete with the joneses while simultaneously drowning in credit card debt.
Last edited by StAcKhOuSe; 09-02-2014 at 10:33 AM..
Most of the faux outrage over the "millennial condition" can be summed up as follows:
1) A lot of them are living at home, therefore they will ALWAYS live at home
2) A lot of them are renting into their late 20's and 30's, therefore they will ALWAYS rent
3) A lot of them have high student loan debt, therefore they will ALWAYS have high student loan debt
4) A lot of them are underemployed, therefore they will ALWAYS be underemployed
We've definitely seen a shift, but there's no evidence the current situation will persist indefinitely.
As for the effects on the housing market, I think the biggest impact is that fewer millennials are willing to "drive until they qualify" in order to get into a starter home. Many don't even own cars and would rather pay a bit more in rent to keep it that way. As a result, I see no coincidence that the remote and poorly accessible housing areas tend to be the hardest hit. This generation didn't produce as many young adults that want to buy those homes even if they could. This I believe is a secular shift that will continue well beyond the current cycle. The other aspects probably not.
If this is so, we'd expect to see a tight correlation between the housing market and VMT (vehicle miles travelled).
Millennials are smarter than people give them credit for. At least we know that we got f*cked and our financial system is corrupt and meant to be exclusive.
I think most are just trying to live their lives as best as they can-travel is a BIG thing. Boomers will be working into their 90s trying to pay off the McMansion and new car lease.
meh, in many areas, it is cheaper and more advantageous to rent in terms of social mobility. it costs over $200,000 to raise a kid from 0-18. and marriage is an archaic concept with far too much to lose.
this is the hipster generation. we reject societal norms of previous generations while taking a **** on anyone else who believes otherwise. and we're entitled hypocrites too.
Every generation says that until they hit about 30 and wake up. Remember that todays Corporate management was yesterdays hippy.
Every generation says that until they hit about 30 and wake up. Remember that todays Corporate management was yesterdays hippy.
why did you quote my post twice and respond twice with nearly identical statements?
perhaps i am not the only one that should wake up.
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not sure what you think i will be learning. i'll just attribute it to the older generation thinking all of us young'uns are naive idiots.
