You’ve been told, perhaps even warned, that Millennials — or Gen Yers — are the largest, most diverse, and well-educated demographic ever to come of age, and that as they grow into late adulthood, they will bring with them the power to make big changes. This group has more written and hypothesized about them than any generation that has come before, and for good reason. They are alpha-influencers with the power to share their ideas with — and to influence — both older and younger generations with their ambition, drive, and their technological and ideological savvy. Many think that, as a group, they will have the collective power to shake up institutional and ideopolitcal structures in the decades to come. They have the strength in numbers to tip the scales of any market trend — often in a very short span of time.
Last year, Millennials were blamed for a huge drop in home ownership. A combination of low income, high student debt, and a precarious job market meant that the homeownership rate dropped to 64.7 per cent according to the U.S. Census Bureau — the lowest level in nineteen years. This year, that notion has been turned on its head. Now, the same demographic is being hailed as the force that will drive down housing prices and mortgage rates for everybody. As the demand for housing shrinks while young adults put off buying their first house, so does the cost.
While the Renting vs. Buying argument rages on, it is valuable to consider both sides of this critical debate.
There are a number of solid reasons to consider renting on a long-term basis over committing to homeownership. Many Gen Yers simply cannot afford the twenty per cent deposit and the ongoing maintenance costs associated with owning a home. Buying also means making a substantial time commitment, since buying a home means living there for a minimum of five to seven years. Due to their habitual wanderlust and the precarity of the job market, many young people don’t want to be tied down in the same living space for that long. Renting offers flexibility that homeownership just can’t match.
Millennials are also more civically conscious than preceding generations, which means that choosing the right chic, urban neighbourhood is as important as choosing the right living space. This generation is devoted equally to financial and cultural concerns, and nothing risks displacing them more than gentrification. As big business moves into low-income, low-cost neighbourhoods, Millennials are the first to move out.
But as many are now entering their mid- to late-thirties, they are slowly building the necessary capital for eventual home ownership, and they may open the home ownership floodgates in the coming years. The widely publicized argument that “Young people just aren’t very interested in buying a house. Instead, the story goes, they want to rent a cool apartment, live in a city, and walk to coffee shops. Forever,” as posited by Time magazine may not be as true as some people once thought.
The reasons for buying a house over renting may be traditional, but that doesn’t mean they aren’t relevant. Millennials are in love with the idea of living the good life. From obsessions with accumulating massive vinyl collections to fanatical devotion to craft beer, they are very concerned with what they consume and how they spend their money. This means that there are more and more young people leaning toward home ownership, as living the good life requires a higher degree of control over your living arrangement.
Financial trends are also slowly shifting to favour this outlook. Malcolm Hollensteiner, the director of retail lending sales and production at TD Bank, says that financial institutions are adapting to the shift, and down payment requirements are less stringent than they have been historically.
One of the most interesting home ownership trends involves the disenfranchisement many Gen Yers are experiencing with traditional hierarchical institutions. Impatience with the imbalanced landlord-tenant dynamic has many renters considering a change, and since many couples are putting home ownership before marriage on their list of priorities, the first major financial commitment they make together won’t be a big wedding, but a down payment on their first house.
The Renting vs. Buying debate will only intensify as more and more of these intrepid, young people reach the age where they may actually be able to afford to make the shift from life as an tenant to life as a home owner. But until that time, renting is still the preferred option for the vast majority of Generation Y adults growing into their middle age. Many Millenials are still students, studying for a Masters or doctorate, which means that renting remains the reality amidst financial conditions that make owning a home nearly impossible. Looking for an apartment — especially in a busy city with many university and college campuses — can be a struggle, but if you plan to rent in a metropolitan city, be sure to do your research and visit one of a number of websites in order to find the best rental apartments on the market. Utilizing the web can make searching for apartments, condos, and homes much easier, especially when renting in a city that you don’t currently live in. Use today’s available tools and you will be relaxing your new place in no time!