Generation Y carries weighty stigmas, such as being entitled, being nicknamed Generation Me, and constantly taking “selfies”. While some of this may be true for specific individuals, it turns out it is not so for those that entered the workforce at the height of the Great Recession. The recession is technically over. The National Bureau of Economic Research said it officially ended in June 2009, lasting a total of 18 months. Millennials continue to surprise, especially in terms of home ownership and location. Here are the latest key, economic findings about our younger generation.
Myth #1: Millennials Fly Back To The Nest
Many writers cover the boomerang effect of millennials, meaning those who return home after college or never left the nest at all. The number of young adults living with their parents increased during the recession due to a combination of lack of jobs and high student loan debt. With the economy stabilizing, millennials are landing jobs and buying homes.
Myth #2: Home Buying Millennials Do Not Exist
Demand Institute’s recent survey and report on millennials covered their current living situation and thoughts on home owning. It is an interesting study since it breaks from the norm by focusing on future trends and growth. They predict:
Today, there are just 13.3 million households headed by millennials, but this number will swell to 21.6 million by 2018, and they will spend more than $2 trillion on rent and home purchases combined – more on a per-household basis than any other generation over the next five years.
Millennials are not marrying at rates seen in previous generations and many have different views of marriage and partnership. Yet a strong 75 percent believe home owning is an important long-term goal, and 73 percent believe ownership is an excellent investment. As millennials age, they will settle into relationships, create families, and purchase a home.
Myth #3: Millennials Can’t Get a Home Loan
Home loans are available to Generation Y, even though 44 percent believe it is difficult to qualify for a mortgage. Numerous factors influence an applicant’s ability to secure a loan. One major consideration is a person’s credit score. If you struggle with meeting your monthly student loan payments, but always pay on time, your credit score is probably higher than you think. It is difficult to save for a down payment when paying off student loans. Do your best, and speak with a mortgage specialist at First Option. We also have a variety of real estate agent partners around the country. These are agents we have vetted, trust and recommend.
Demand Institute found 69 percent of Gen Y would consider lease-to-own approaches to home buying. The loan industry may change as millennials make up the majority population in the U.S.
Myth #4: Millennials Crushed By Inability to Save
Overeducated, jobless and poor — that’s your average, hip millennial, right? Wrong. They’re hard working (on their own terms), creative money makers, skeptical of the safety net Social Security should provide, and savers. Forbes recently published “The Recession Generation: How Millennials Are Changing Money Management Forever,” showing how millennials are changing the norms to fit their smartphone-led lifestyle. The article also reveals: “Millennials […] control maybe $2 trillion in liquid assets […]. By the end of the decade that number is expected to surge to $7 trillion.”
Myth #5: Millennials Swarm To Metro Lights
Price and supply — the tried and true realities of real estate — are the main decision drivers for millennial home buyers. A small percentage will always be attracted to big city living. Though with the economy improving, millennials are spreading to the suburbs and popping up in unexpected places, like Fayetteville, North Carolina. The members of Gen Y put a high premium on affordability.