According to recent sources, the real estate industry has hit its highest record last year, since its major fall. This is the strongest and quickest rate of recovery. This is definitely an unusual caveat. The percentage of home buyers has declined dramatically. This is the lowest in the past thirty years. Market watchers attribute this to many factors. It has an impact on the person’s sociology and economy. Many first-time buyers believe that the drop would aspire and improve them. It will have a long-term shift in their lifestyle. Though Millennials are pushing away their dreams of buying a new home, they have not destroyed the “American Dream”.
It is quite interesting to note that millennials between the years 1980 and 1995 are experiencing serious challenges. More than 77 million millennials are going through a tough time before they can sell their curtains and carpets.
In the year 2017, nearly 5.77 million homes (both new and existing) were on track. The Census Bureau and National Association Realtors (NAR) saw a 4% rise since the year 2014. This makes 2017 the best year in the real estate industry since the recession. With respect to the economy, there is plenty of good news. In the past few years, only 32% of the purchases are by first-time investors. This figure has increased to 40%.
Why are the Numbers Low?
Many clinical reasons have delayed and reduced the rate at which millennials marry or buy homes! Nevertheless, experts claim that this situation will change and wear away in the next few years.
Are lifestyle and debt the root cause?
Millennials are known for their hefty student loans. They pay thousands of thousands of dollars on educational loans. This drains their hard earned income. Moreover, millennials love to live in urban environments. These places have minimal chances for homeownership. Most of the time, these places are terribly expensive. Luckily, these challenges (alias obstacles) are bound to improve in the coming years. As the young age group settles and grows old, these obstacles will wear away.
Students from the Class of 2015 carry a debt of 35,000 USD. Mark Kantrowitz, an expert in loan analysis verified these numbers. Since 2005, these numbers have increased sharply. More than 74% of students with a Bachelor’s degree have loans worth thousands of dollars.
A student loan is a major burden on millennials. And, this is why many youngsters from the millennial era live with their parents. A study by the Pew Research Center declared than men between 18 and 35 years of age live with their parents. And, 37% of women from the millennial era live with their family. This number has increased drastically since the early 1940s.
The Job Market
Another reason why millennials are not prepared to buy homes, marry or have kids is due to their job profile. Millennial graduates are finding it difficult to secure a high-paying job. The unemployment rate for millennials between 20 and 30 years of age is 13%. Though the number has dropped in recent years, it has had a long-term impact on their home buying plans and financial commitments.
The Young Families.
Millennials who try to change this pattern, make investments, marry and raise kids have very little money. They go through numerous challenges. Here are few challenges faced by young millennial families:
- They have minimal (or restricted) access to credit
- They have hefty student loan debts
- They experience high chances of unemployment. They go through employment uncertainties.
- They have saved very little (or no) money.