5 Reasons Millennials aren’t buying homes… and how to change their minds
December 04, 2013
The economy is stabilizing, and home loan prices are still historically low in many markets across the country. Many are taking advantage of this, and buying new homes. But Millennials (people born in the 1980s and 90s) haven’t joined this home-buying club as quickly as others.
Here are a few reasons why:
- Student loans: According to CNN Money, the average amount of student debt for a 2013 grad is $35,000, in government and private loans. A truly frightening number is “$1.1 Trillion,” which is the amount of unpaid student loan debt across the country. Adding a mortgage on top of that is a harrowing undertaking, and something many aren’t willing to risk. Salaries for many entry-level jobs barely cover basic expenses like food and bills. There simply isn’t room for two debt payments in most budgets.
- Still at Mom and Dad’s: Last year, 10% of women and 17% of men lived with their parents. Many do this just after college or between jobs, because that’s when finances are the most unknown and unstable. Saving is often a luxury, and is put on the back burner.
- No steady job: The recession hit jobs hard. Even though many are starting to recover, Millennials are having a tough time digging out. A 2013 Center for College Affordability and Productivity report found nearly half (48%) of recent graduates work jobs that don’t require their college diplomas. Lower-skilled jobs often pay less, meaning many Millennials have far less money to save for a down payment.
- First thing’s first: Once they find jobs, Millennials need cars to get to and from work every day. For many, a car is the first major purchase they ever make. Once they have that under control, a house becomes a bigger possibility.
- Delaying other milestones: According to the Pew Research Center, the median age to get married is 27 for women and 29 for men (for grandparents of Millennials, the age was closer to 20). Often, this pushes back starting a family, and buying a home, even further.
But don’t be discouraged! Just because they’re not ready to buy a home now, doesn’t mean they have given up on the idea.
What your company should do in the meantime:
- Interact with them. This means having a visible presence on social media, and posting articles that they can relate to. Forbes gets it exactly right when they say, “If companies want to know what Millennials want, they need to engage in a dialogue with them. It’s a conversation.” If they feel like a company cares about them, they’ll be more likely to reach out in the future.
- Be patient. Many define success as getting all of their ducks in a row, and a house may be one of the last to fall into place. This means tackling student loans and a car payment are priorities. Once those are under control, they’ll start knocking on your door to tour a few homes. Plus, many Millennials are still in college. Once they start moving toward financial stability and independence, you won’t be able to keep up!