The homie WisdomIsMisery pointed an article on Huffington Post my way the other day that was really intriguing. This article discusses the fallout of Millennials (Generation Y or ppl born from mid 1970s-early 1990s) choosing to rent rather than buy homes, and the potential trickle down effect this has on our economy. I found this article interesting because I’m a part of Generation Y and I don’t own a home and neither do most of my peers. I’m 30 years old and I’ve rented my entire life. 40 years ago, I would have been an anomaly as most men my age would have owned a home, been married and would have had a couple of children.
Burdened by $1 trillion in student loan debt and wary of taking on a new loan with a home mortgage, millennials are choosing to rent or move back in with their parents. …… Pierre Lapointe, a financial strategist, says student-loan debt is turning into “a significant drag on the housing market.”
I remember when I graduated from undergrad I moved back home for about three months before I got an apartment with one of my line brothers and a college friend. Although when I stepped foot off my college campus and had zero debt, buying a house was the furthest thing from my mind. My reasoning was a home/mortgage was a 30-year commitment that I wasn’t ready to make. You think it’s hard for a man to commit to a woman? Try mortgage and buyer’s remorse. I know plenty of people who moved back home after college to stack bread so they could make power moves. Perhaps it’s coincidence that most of my friends who went that route were also 1st generation foreigners, but that’s another post in itself.
“My subjective experience is that when people buy a house,” Dan Ariely, a professor of psychology and behavioral economics at Duke University, tells MPR, “they immediately start renovating and fixing it — going on Sunday afternoon to Home Depot, doing things that I think people would never do for houses that they rent.”
Now this is where I disagree with the author. From the outside looking in, most people who own homes tend to be more fiscally responsible. They’re committed to a home, which is something that you have to keep investing in. The hot water heater goes out and you just can’t call the super or rental management to come fix it. It’s the homeowner’s responsibility. That said, people who rent spend more money in the long run (on rent) but sometimes they may have more extra short-term disposable income. More disposable income to be pipelined directly back into the economy in terms of retail sales.
They’re not only putting off buying a home, but they’re choosing to get married and have children later in life as well. Comparing U.S. Census Bureau data, millennials are getting married at half the rate their parents’ generation did.
Now this is where the article gets interesting. I’m definitely not married and I don’t have any children (that I know of). I put that off in pursuit of higher education and self-betterment. I’m not alone in this aspect. Most of my classmates are single and childless, men and women alike. My mother had five children and her mother had five children. Adoption aside I’ll probably have no more than two children and I’m ok with that. Generation Y is probably the first generation where there are subsets of the population who choose education over children. The general consensus is that buying a home is an investment and I don’t doubt that, but I won’t be buying one until I get married at least and definitely when I start having children.
Are you a homeowner? If so, do you think you purchased at the right time? If not, do you plan on purchasing a home in the near future? If you are married or have children, do you own a home or do you rent? How did you make your decision?