Generation Rent: Why Millennials Aren't Buying Homes
2015-06-02
Back in the day, moving out of your parents' home probably meant you were moving into one of your own.
But whether you blame it on the economy or just a generational shift in values, young adult homeowners are becoming increasingly rare.
Case in point: recent stats find that only 38 percent of millennials between the ages of 25 and 34 owned homes in 2012, compared to 52 percent of the same age group in 1980.
So just why is "generation rent" so adverse to home-buying?
Well, that depends on where they live. A survey from Carrington Mortgage Services found that the underlying causes actually vary from region to region.
In the Western states, for example, millennials are most worried about being able to shore up enough for a down payment. That makes sense -- considering the region's average down payment amount tends to far exceed the national average.
Moving over to the Midwest however, millennials have misgivings for a much different reason: student loan debt. Experts suspect this is because salaries tend to be lower here, leaving student loan debt taking a greater chunk of the generation's take-home pay -- and making homeownership a more daunting challenge.
In the Northeast, Gen Y is most concerned with credit card debt, while Southern millennials actually shy away from homeownership for two reasons: concern about low credit scores, as well as simply not knowing where to start.
But not everyone is ditching the white-picket fence altogether. Despite their current low confidence, more than half of millennials surveyed said that they plan to buy a home within the next two years.
Case in point: recent stats find that only 38 percent of millennials between the ages of 25 and 34 owned homes in 2012, compared to 52 percent of the same age group in 1980.
So just why is "generation rent" so adverse to home-buying?
Well, that depends on where they live. A survey from Carrington Mortgage Services found that the underlying causes actually vary from region to region.
In the Western states, for example, millennials are most worried about being able to shore up enough for a down payment. That makes sense -- considering the region's average down payment amount tends to far exceed the national average.
Moving over to the Midwest however, millennials have misgivings for a much different reason: student loan debt. Experts suspect this is because salaries tend to be lower here, leaving student loan debt taking a greater chunk of the generation's take-home pay -- and making homeownership a more daunting challenge.
In the Northeast, Gen Y is most concerned with credit card debt, while Southern millennials actually shy away from homeownership for two reasons: concern about low credit scores, as well as simply not knowing where to start.
But not everyone is ditching the white-picket fence altogether. Despite their current low confidence, more than half of millennials surveyed said that they plan to buy a home within the next two years.
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