So as this 2016 year is slowly coming to an end, and a new year is approaching us a lot of questions are raised. Mostly considering the trends that are currently visible, and those are that mortgage rates are really close to all-time low and that there has been a significant imbalance between sellers and buyers. This mostly means that there are not enough houses for medium-class citizens or people simply do not want to sell them at a lower rate than what they are actually worth.
Among everything else, there is a question; are actually millennials buying houses?
The answer on this one, unfortunately, is easy.
No, they are not.
There has been a significant decrease comparing to what has been happening in last few years, noticing that only 34.1 percent of people under the age of 35 actually own a home. This record is one of the lowest, from the startup mid-2000s.
One might think, “well if they are not buying houses, are they renting them?”
The answer on this one is no as well, as rent rates have gone up as well, making it harder for millennials to achieve even that. Apparently, young people are falling more and more from that dream of owning their own home, mostly returning to their parents after some time, or not leaving it at all. According to researchers, currently, 1/3 of people between 18 and 34 years, are living with their parents, which is a high number.
Some might ask, what has caused this, and is it anyone’s fault? Maybe simply young people do not want to be independent and are spoiled, not wanting to accept the reality of growing up, and new tasks that come with that? Well, that is not true again. Actually out of people that were researched, from 21 to 45 years, 93 percent reported that they would like to own a home. So what is delaying this?
There are, again, a few factors.
Some millennials simply do not want to buy a home until some more time passes, as they think that it obligates them to get married. Another and more important and relevant factor is that they are actually poor.
As already mentioned, prices of houses are rising, and there are not enough of those for mid-class people. This is caused by factors like lower levels of payment, indebt student loans and actually struggling to save money, due to other costs. They have not been aware of down payment options, though. The fact is that actually, not only has there been a decrease in millennials owning a home, but all age groups are at risk as well. Although some might think differently, this is not caused by a possible bubble forming that is just about to burst.
There is one side though of the view that might not be so bad when it comes to the fact that most of the people from the age of 18 to 34, do not actually have their own home.
Once you buy a home, you pretty much lock yourself up, considering your location. So there is not much room for movement, or trying to find better life options in other places. From that side, it is actually good that students, and degree graduates, actually have the opportunity to go to a few places, being there for a while, and trying to find a job that suits them most. This way, it can be positive for the U.S. economy, with people actually having jobs that they are educated for and that they are paid enough.
Along with that, we must note that there are actually some options created to help millennials, but they aren’t being utilized because no one knows about them. For example, FHA is actually offering loans for people with lower credit scores. Also, some are not aware of how much money they need, and what they need to pay, so a mortgage calculator might help in educating on that purpose. As of the in-debt loans, some might qualify for income-based repayment, and if they get accepted, they are mainly released from the loan.
All in all, this can turn into a significant problem, considering that people are not being able to afford a home in their most useful years, so both the government and millennials themselves have to try and affect this trend in future.