We live in an era where time is money, maybe more than ever, and this is something that is being installed in our minds from a very young age. We all know the steps, and when we are supposed to be making them, kindergarten, middle school, high school, college, and then – young people are faced with a whole new uncertainty. “Am I supposed to get a job, to find a house, start a family? When, how?”, the young adults might ask themselves. These similar questions have a lot of underlined stress in them.
In this article, we will unpack the main aspects to these questions and problems associated with them, mainly focusing around homeownership, and try to find out how each aspect fit into the whole picture that is the future of millennial homeownership.
The initial problem
When young people, in this certain period, millennials, get to the point in life where it is expected from them (both from social expectations and from their families) to “get independent”, they tend to get very stressed out. Since getting independent doesn’t come with a manual, there are a lot of ways that millennials go on with this problematic situation, but the most obvious answer is getting a job and moving out of their parent’s home. Now, this is where the dilemma begins. If you do get a job and also move out of your parent’s home, the possibility is high that you are going to rent an apartment.
Getting a job and renting an apartment
Getting a job in the current market is a whole another TED talk, but let’s talk about it for a moment. The thing is – finding your first job is really hard. Many companies don’t want to invest in somebody who is not experienced enough to do the job right but, in order to have the necessary experience you need to find a job first, and, as you can see where I’m going with this – it is a pretty paradoxical situation.
Now, let’s go a bit further and say that the person has landed their first job and is paid an average salary. If you have an average salary, you definitely are not going to have enough money not only to buy your first home, but you are probably going to rent a pretty average apartment.
The problem is that if you are going to live from paycheck to paycheck, how are you going to manage saving up for a house that costs five times more than your yearly income? Knowing the fact that long term, you will spend far more renting than if you were to buy the house initially doesn’t help with the absurdity of the whole situation.
Aspects to consider when renting
Sometimes you stumble upon an apartment that looks just perfect, and you can just see yourself enjoying everything about it – but it’s ridiculously overpriced. Some would say that the hedonistic approach is better, who cares about the money spent if it’s money well spent? And some would agree. But if you don’t, there are other important things to look for, is the apartment close to public transport, to your workplace, or other places of interest?
There are great articles online that show the price range of the apartments in reference to these aspects, and if you want to find out more about that, you can look into this useful guide in order to find out what you can do in order to lower your expenses. Being smart about choosing where to live and doing your research is your best bet on being able to save some money and not having to live making your ends meet.
Why is it different for millennials?
Millennials have truly lost a lot of ground because of the recession when wages were dropped and the unemployment issue started to rise. Those who have obtained college degrees usually have higher earnings, but this is also not always true. And also, those benefits often come with a heavy debt burden in the form of public student loans.
And as far as the housing market goes, it is important to consider that we have a staggering 1.8 billion more people in the world today than in 1999, which is only 20 years ago. And as we know, all the newly built homes cost far more than the older ones. And I’ll let you ponder and draw the connection between those two facts.
What lies ahead?
Even though the millennials are surrounded by so many different layers of uncertainty and adversities, the thing is – tackling them will only make them more capable and enduring in the end. And in a few decades, when it’s up to millennials to set the stage for the future generations…millennials, don’t forget the problems that you faced, and let’s try to make it better in the future!
