The statistics are in, and millennials simply aren’t buying homes like previous generations. In fact, home ownership has dropped below 64 percent in the United States, which is very close to a 50-year low. But many people already knew this, as it’s been in mass media for a few years already. The big question is why are millennials slow in acquiring a mortgage?
Home & Family Come Later
These days, people are getting married and having children much later in life – especially in comparison to that of their parents and grandparents. Today, the average person waits until nearly thirty before getting married. The exact average age for women is 27, while men average at age 29. Just a decade ago, women were getting married around 23, and men were getting married around 26. In years prior, they were getting married even earlier, and the upward trend in age seems to only be continuing. A lot of millennials say they don’t even plan on getting married, or that they feel marriage is unnecessary.
In that important second part of starting a family, people are also waiting later to have children. The average age a modern-day woman has her first child is 25, which is up from age 24 in 1990. In 1970, women were having their first child around age 22. This shows us that this is yet another trend which appears to be continually on the rise. Not to mention that many woman are opting to not start a family at all, while a decent percentage opt not to start a family until they are already well into their thirties.
The problem with this is that homes are typically bought by married couples with children, or those who are planning to have children in the near future. It does not make sense, after all, for a single man or woman to purchase an average three-bedroom home if they have no intentions of having children or marrying in the foreseeable future.
Another determining factor in purchasing a home is that millennials are consumed with college debt. Depending on the payback schedule and how quickly they found jobs in their chosen fields, millennials can be saddled with debt for as many as thirty years after college. With interest rates seeming to be perpetually on the rise, this doesn’t really leave a lot of extra funds to purchase a home with. Instead, people are choosing to live with their parents for longer periods of time, or else get stuck in the rental market. The price of monthly rent is also very high in comparison to historical data, which means it doesn’t leave a whole lot of room for savings.