Millennials – the generation labeled as lazy, entitled, and whiny by most media outlets. And I’m one of them. The number of 18-34 year-olds living with their parents rose from around 27% before the crash to over 31%, where it remained in 2013.
So is it true? Why has this generation received so much flak in mainstream media? The parents of this generation fulfilled their idea of the “American Dream” [home ownership] at a much younger age than this current crop of potential homeowners. Without diving too deep into the psychology of this generation or beginning a warfare-class discussion, here are 3 of the reasons millennials rent instead of own.
#1 “Peter Pan Syndrome”
“I don’t want to grow up!” By far, this is the Millennial mantra. More often than not, this group has the income to own, but choose to rent in an urban metropolis for the experience after college. This falls under the entitlement I mentioned above – fear of commitment is huge within this mindset. Flexibility to come and go, without responsibility to a certain location is very attractive. In addition, when young adults shack up, more money can be saved: nationally, a 2-bedroom apartment is 35% cheaper than two 1-bedroom apartments.
Despite higher mortgage rates, buying is still 38% cheaper than renting in all of the 100 largest metro areas. However, assuming most Millennials (this is far and away, a large assumption) have graduated from a 4 year college, student debt can range upwards of six figures. Paying that down can be a 10 year commitment – add on a 30 year mortgage, a 20% down payment, and that “Peter Pan Syndrome” doesn’t look so bad.
For the uninformed – wanderlust is a strong desire to travel and explore the world. This has become a more dominant priority for Millennials. Consider the previous two points, most people of this generation want to grow and mature internally without the big life commitments their parents encountered. Wanderlust isn’t a new phenomenon; it’s simply tackled much differently than previous generations. Joining the military used to be the norm to cure wanderlust, however this is no longer the de facto.
Owning a home is a huge milestone in any individual’s life. However, who’s to say that is still society’s norm? Perhaps renting is the best option for these “satisfy-me-now Millennials” who prefer things a la carte. One could look at the rise of peer-to-peer car sharing companies such as ZipCar or Lyft as further evidence that this generation yearns for constant change. Further examples include the jobs young adults take on before truly deciding their calling. Notice I stated “jobs” and not “careers”. Renting works in a similar fashion, where there’s more room for trial and error.
Moral of the story? Make sure your vacancies are in front of our highly mobile, millennial audience. Trulia has 35 Million unique visitors with 51% of renters earning over $75K/annually. 89% of Trulia renters are 25+ years old. Call us at (888) 987-8542 to list your vacancies at no cost.