Just like many other aspects of the current economy, the housing market is changing. And, in most cases, all of those changes are fueled by one single generation: millennials. And, Millennials are going off the idea of settling down and buying a house.
Instead, they prefer to rent a flat or home whenever they need one in a certain place. Of course, certain characteristics of today’s housing market have caused them to rent for longer. However, even those who could afford to buy a home prefer not to. Here’s why.
High Housing Prices Are Delaying Purchases
House prices across the US have been skyrocketing throughout the past years, today reaching peaks higher than the ones of 2006. Interest rates might be low, but the prohibitively-high house prices still represent a major obstacle to start climbing the property ladder. It is possible that Millennials are only waiting for house prices to be low enough to make a purchase, but their lifestyles are better for renting.
They Don’t Want to Increase Their Debt.
The interest rates might be low, but all this is not enough for Millennials to buy a house, especially if their bank accounts are compromised by a student loan that is growing every year. If they are just at the stage of repaying such debt, they might wait until it is paid off before taking on an even greater loan – such as a mortgage.
Renting Offers Them More Flexibility
One of the main characteristics of Millennials as a generation is their love for flexibility, versatility, and location independence. And, now that the pandemic has fueled the trend of remote working, there is no reason for them to buy a home in a specific geographical location. Instead, they prefer to rent and move whenever they want.
They Are Not Ready for a Mortgage
Because of the student debt, increasing house prices, and stale wages, many Millennials delay getting married and having children. Indeed, starting a family is only a priority for just a few Millennials in their late 20s.
Because they are still moving around, finding a job that fulfills them, and looking for a place to settle, they are not likely to take on a mortgage. Especially if they are not starting a family right now, many would prefer to wait until they have settled down.
They Prefer Not Having to Manage the Property
Owning a house can be an exciting experience, but it can also be tiresome and time-consuming. Indeed, there is always some repair and maintenance task to keep up with. And, of course, looking after the house is an extra cost that many Millennials might prefer not to have to account for. In general, having a landlord who takes care of all issues represents a more suitable solution for them.
Because of these rapidly developing trends, Millennials are always on the lookout for rental properties that are modern and offer them all the little luxuries they would expect from a newly built home. Because of this, build for rent housing options are becoming increasingly popular, while the supply is still too slow to meet the demand.