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The problem is the definition of millennials is far different that the perceived demographic. By definition a millennial is anyone born between 1982 - 2002. My definition would be anyone born after 1995. People born in the 80's and early 90's are culturally far different from those born in the internet era. The value, decisions, interests, and choices vary vastly from those that are true millennials.
People born after the mid 90s are defined as "Generation Z". Millenials are 80s to mid 90s.
The problem is the definition of millennials is far different that the perceived demographic. By definition a millennial is anyone born between 1982 - 2002. My definition would be anyone born after 1995. People born in the 80's and early 90's are culturally far different from those born in the internet era. The value, decisions, interests, and choices vary vastly from those that are true millennials.
The problem really is trying to pigeonhole and stereotype generations.
I know millennials who think Prez. Trump is a The Second Coming.
I know millennials who think he is Beelzebub incarnate.
And, I know millennials who have other things on their mind.
Millennials generally are following a trend line that started some time ago, and are being commoditized emotionally by people who need to stereotype rather than individualize.
How many of these millenials truly bought a home 100% without any assistance?
Assistance includes:
Living with parents post college (or having bills paid) to help save money
Receiving transfers of wealth to boost savings and help with down payment
Having in laws pay for their weddings and providing substantial wedding (cash) gifts
Inheriting property from their parents
I don't know too many people my age with homes that did all the heavy lifting on their own. The number of Gen Yers that did it this way is likely much, much, much smaller than past generations.
Research is showing that the millennial generation is forgoing the once cherished tradition of purchasing a home. For many of us 'Baby Boomers' our greatest asset is the equity we have built up over the years by buying rather than renting. In my case several hundred thousand thousand dollars. If I had chosen to rent through the years and perhaps taken the easy route (no maintenance, freedom to move at will, etc) I probably would have payed about the same in rent as I did in mortgage.
I can see singles or childless opting for urban rentals and walk to work and bars but I can't really understand why families would choose to rent.
Lots of very smart folks on this CD forum so I would appreciate insight. Maybe things have changed and I am looking at things totally wrong.
I just read a report the other day that said Millennials now make up the largest home buyer demographic. So, I think your entire premise here is flawed.
All you have to do is research the average net worth of renters vs home buyers at retirement time.
Not the best comparison. You have to separate out renters that WANT to rent vs. renters that HAVE to rent. No goes through the undertaking of buying a home unless they truly wanted the house (or inherited the home, a small fortune etc.).
Comparing those that can afford a home but choose to rent vs. home-buyers would be an interesting comparison.
1) You usually have to take out a mortgage. Say you put $500K down and take out a 30 year $300K mortgage. Over the years, at say, a 5% annual interest rate, you're gonna spend $1,296,582.714. And you're stuck with these payments more or less unless you manage to sell it or refinance, which both cost lots of time and $$$. Oh, and should you lose your house to a natural disaster? You're homeless and STILL on the hook for mortgage payments.
2) You're responsible for ALL maintenance. Renting, you just submit a service request online and rental management takes care of the rest. Owning, you not only have to pay everything out of pocket, you have to deal with finding and managing the people you hire.
3) Property taxes. This in many areas costs a similar amount as rent, and guess what -- all that money is down the drain, and you have to pay it for as long as you have the house. Miss one payment, and goodbye house and all the years you worked to own it. Oh yeah, and the tax bill is based on current market value, not what you paid. So if you're $500K house appreciates to $5,000,000 -- your tax bill will be 10× higher than you anticipated. Ouch.
4) You're stuck. If you bought a house and suddenly you have neighbors moving in who let aggressive dogs run around, are hoarders, or who are loud muffle-free motorcycle enthusiasts, you probably can't leave unless you sell the house, which will be hard if the selling market is bad in that area, and especially with neighbours like that.
5) You often have to abide by illogical rules, like having to keep a mowed lawn rather than using that space to grow fruits and veggies. Or having to have your house painted only neutral colors.
I am a millennial, so here is me personally with my personal opinion.
Years ago, you were able to stay put at your job. Meaning, once they hired you, you were pretty much set where you graduated high school and got college level jobs without going to college, and they kept you there for life unless the business closed, recent years with lay-offs and you were still there, etc (thats why people say they were at their job for 40 years!). You pretty much had it made so there was no need to go from job to job after 3-5 years because it was a better job - you already had that better job to start with. Thats what I kept hearing everyone say.
So, in recent years, thats all changed because they dont have those jobs anymore - they only usually keep you for 3-5 years, so everyone then has to move to be at their new job. Its unpredictable how long they would keep you.
So, thats why it made sense for baby boomers, etc to buy homes, while we have to rent. We can just literally pick up and go instead of trying to prolong something because you have to wait until your house is sold. By that time, the job may not be there for you because of how long its taking. Thats why it seems like everyone is renting.
Yes I know you could possibly be throwing away money because you cant get anything back once you leave the apartment (in this sense), but I think the other half of this is that no one can afford homes anymore. With an apartment, you just pay rent, thats it. With a house, you pay mortgage, taxes, etc. You also have maintenance that you need to be able to afford. Its all the outside maintenance, plus anything inside like furnace and plumbing. All of that you need to do yourself out of your own money if it should break or have problems. So thats why its a little better if you rent because the landlord has to do that out of their own pocket.
I can probably go into a lot of details, but this is the gist of everything.
How many of these millenials truly bought a home 100% without any assistance?
Assistance includes:
Living with parents post college (or having bills paid) to help save money
Receiving transfers of wealth to boost savings and help with down payment
Having in laws pay for their weddings and providing substantial wedding (cash) gifts
Inheriting property from their parents
I don't know too many people my age with homes that did all the heavy lifting on their own. The number of Gen Yers that did it this way is likely much, much, much smaller than past generations.
Couldn't you say the same about any other generation? I'm pretty sure parents have always helped their children in one way or another. If you go back just a little ways in history people didn't usually leave the family home until they were getting married. And as for having parents pay for weddings, without having any hard data I would be willing to bet that more people self-finance their weddings now than in the past.
Oh goodie, a boomer wondering why on earth millennials don't just go buy a house. It could be that we have massive student debt because the cost of education skyrocketed, we graduated in a horrible economy (thanks for that, boomers), the cost of living has increased, and we can't afford a 20% down payment.
Sorry, this is a pet peeve of mine--people who think millennials aren't buying things because we don't want to. Sure, some don't want to, but largely we just can't afford it. I pay the equivalent of a mortgage every month in student loans. We will buy homes (and cars, and whatever else economists want to complain we're not buying now) once we can get the money together. It's just going to be about a decade past the age when our parents bought homes because, as a generation, our economic situation is radically different than our parent's. Unless you'd like to give us some money from your pensions or social security (which we also won't have) for a down payment?
Edit: I thought some numbers might help, because I have realized in talking to the older generations that they don't really realize just how much more expensive our education was compared to their's. I dug up the old UNC tuition numbers. In 1985, the oldest number I could find, tuition and fees for an in-state student was $794. Plugging this in to the CPI inflation calculator says this is the equivalent to $1,797 in 2017 dollars. Today, tuition and fees for an in-state student at UNC is $8,834. That's just tuition and fees, not counting housing and books, etc.
When I attended the major state college in the early 70s, my in-state tuition was $25 per credit hour. My part-time job (semi-skilled--I'd had the job since 11th grade) paid me $2.50 an hour.
So 120 hours of part-time labor--6 weeks--paid for a full-load semester.
People born after the mid 90s are defined as "Generation Z". Millenials are 80s to mid 90s.
Yeah I'm confused as to how someone could think of someone being born then as a millennial.
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