In a country where marketers are trying to make ‘rent’ the new buy, are people losing the pride of ownership?
Why Did This Happen?
After the horrendous Great Recession, houses are not viewed as reliable investments anymore. Without being tied down to any one city from their mid-20s and into their 30s, the young are allowed to go wherever the best employment is. With the growing value and prestige given to higher education in this economy, maybe it is a good things to allocate resources into gaining skills, networking as opposed to choosing a permanent roof over their heads.
But why is there a sudden drop in ownership?
Firstly, millennials are putting off getting married, which many still observe as an essential to homeownership. Ironic because the first question a girl’s father will ask her suitor is if he has a decent roof to shelter his daughter!
Two is while they’re earning less than the previous generation, costs are steadily rising.
“With a median household income of $40,581, millennials earn 20 percent less than the baby-boomers did at similar stages of life, despite being better educated”
-Advocacy group Young Invincibles.
(Values are adjusted for inflation, of course!)
We’ve all been at the mercy of loans! It is believed that most millennials are drowning in student loan debt, start-up loans etc. Given that there is a huge rush of qualified graduates and a stagnant number o jobs, education isn’t helping improving their financial situation that much.
Lastly and this resonates so much with us at TMM- Investing in experiences brings us more happiness
Isn’t that the point of our existence- the quest for happiness however we get it! A recent study found that millennials are more likely to travel than any other generation with a whopping 60% of them saying they prefer to spend on experiences rather than purchase material possessions.
Even if you consider owning houses as a measure of wealth which you can sell or rent out if need be, there are other kinds of investments you can make for a equal or higher rate of return (as said by Nobel Prize-winning economist Robert Shiller.) Study hard, get into college, work hard in a safe and reputed career and retire at 60 with decent savings.
A recommended path for many generations, the latest cohort of 20-somethings aren’t buying this way of life anymore.