Millennials, a demographic cohort defined loosely as the generation born between the early 1980’s to the early 2000’s, are purchasing homes less and renting homes more. True homeownership rates for ages 18-34 have fallen to a record low. It is predicted the homeownership rate will continue to fall throughout the next 10-15 years meaning millennials will be renting for a longer amount of time than the previous parent generation.
What has caused this dramatic popularity in renting? Increase in unemployment rates and average student loan debt coupled with a reborn sense of adventure and need for flexibility will be the demise of purchasing homes. Purchasing homes is becoming outdated and not fiscally smart with the lifestyle changes millennials are making.
Millennials are facing astronomic unemployment rates coming out of college as they carry around their record high average in student loan debt. On top of the difficult financial situation millennials are facing, they are also met with a time when mortgages are simply harder to get. Fiscally it isn’t even possible for the majority of millennials to even think about purchasing a home, so they have moved on to renting. With this move, millennials are starting to see the benefits in renting over purchasing, and there isn’t much reason to go back.
With the millennial generation there has been an increase of interest and understanding for mixing different cultures. Renting provides access to affordable living situations in otherwise unaffordable urban areas with nightlife, restaurants, and other ways millenials are using to meet multiple people. Renting also provides flexibility in where you want to live making it easier to move. Millennials have a new sense for adventure, leaving behind the feeling of needing to settle down. According to some studies, millennials stay with a job for a surprisingly short 3 year average and then move up or move on. Renting makes moving every three years a possibility.