Are millennials buying homes or are they instead staying in their parents’ home and living up to their reputation of being entitled, lazy and addicted to social media? The answer may not be so simple. How Did Millennials Get That Bad Rap? First off, let’s give millennials a fair shot and understand why they may have gotten […]
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First off, let’s give millennials a fair shot and understand why they may have gotten a bad rap. In a CNBC article titled Why Do Millennials Get Such a Bad Rap at Work?
, Lindsey Pollack, consultant and author of Becoming the Boss: New Rules for the Next Generation of Leaders
explains the negative labels are often the results of misperceptions. For example, when it comes to laziness Pollack says the laziness label “may simply be a reflection of millennials’ comfort level with technology. Having grown up with Google and GPS-enabled smartphones, they’re used to finding the answers with just a few clicks.” Because of this millennials are going to the take the “quickest, easiest route.” It’s not that they don’t want to work hard, “they just want to know why they are in their role and what the larger goal is,” says Pollak.
Now that we have our misperceptions of this generation out of the way, let’s talk about their home buying trends. A 2015 Forbes article titled More Millennials Living At Home Than Ever Before
shows more of them are living at home than five years ago regardless of the economic recovery, based on a report by the Pew Research Center
. The national unemployment rate for millennials was at 12.4% in 2010 and declined to 7.7% percent in 2015, yet millennials are still choosing to live at home. Why?
Again, it may not be as simple as to label millennials as lazy. Millennials actually have “more debt, a higher cost of living and stagnant relative wages,” says Luke Delorme, Research Fellow at the American Institute for Economic Research. Delorme backs up this fact by explaining that student loan debt was at about $509 billion in 2006, and increased to about $1,360 billion in 2015, an increase of 167%.
Richard Fry, a Senior Researcher at Pew Research Center, agrees that the higher cost of living and student debt factor into the lack of millennials buying homes, but the article also points out the lack of home buying could be related to changing attitudes. Fry, as well as a millennial profiled in the article, point out millennials (and probably their parents) are more accepting of the living arrangements and more mindful that it’s wise to pay down debt first, establish a solid financial footing and get ahead before jumping into a home purchase.
Millennials still comprise 68% of all first-time buyers, according to a NAR 2015 Home Buyer and Seller Generational Trends report
. Millennials appear to be most attracted to markets that are growing, yet affordable. Des Moines, Iowa ranks as #1 with 59% of millennials representing the shares of purchased mortgages, according to Realtor.com. Other cities that made the top ten list of millennials purchasing the most mortgages include cities in Utah, Michigan, Wisconsin, Louisiana (several cities), Pennsylvania and Tennessee. You can see the full list here
The take away:Millennials are still buying, yet they represent buyers who are truly ready to buy and able to handle the expenses as opposed to not being able to come up with the down payment or having to foreclose on the home.