Millennials, all 80 million of them, might finally be taking the plunge and stop renting and start buying. This vast group of consumers, those born between 1980 and 2000, has recently overtaken the so-called Baby Boomers as the largest generation as the Boomers are riding into the sunset. What has kept the millennial generation on the home buying sidelines and why might they be changing their collective minds?
Millennials entered their young adult years very near the beginning of the Great Recession when foreclosures were all the rage. Banks failed, at least the smaller ones, and it was plain to them that should the economy ever “go south” then they could lose their homes, ruin their credit and be unable to sell the home should they get into financial straits because home values plummeted. “No thanks, not me!” they said.
This group, around 36 and younger, has now reached an age where their jobs are more secure, pay checks pay more after a few rounds of raises and credit has been established. They also see the economy is steadily improving and there hasn’t been any real sort of economic uncertainty for the past few years. They may also simply be ready to buy now and are getting tired of renting and not having a place of their own. Young workers just entering the work force are extremely mobile and that’s their choice. They don’t want to be tied down and a 12 month lease may even seem too long. But as they begin to mature and see themselves in a more responsible light, home ownership becomes closer to reality.
And for those graduates who took out student loans to get them through college, their student loan balances have gradually dwindled and monthly credit obligations have fallen, expanding their buying power. Finally, mortgage rates continue to fall. And maybe the best reason of all? Hey, YOLO!
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