The traditional, linear sequence of stages in one’s life no longer applies. In today’s high-paced, hyper-connected world, we cannot be comforted by the thought of a predictable, sequential life. This shift has affected all aspects of life including homeownership. A recent – well sort of recent – 2014 study by the Futures Company, found the Millennials homeownership rate significantly lower than that of the baby boomer generation.
The study found that 75% of Baby Boomers own their home, while 20% of Millennials own their home. Some of this is due to age, as Baby Boomers have had many more years to acquire wealth to afford a home. The interesting concept the Futures Company suggests is that it’s the nonlinear lifestages – now commonplace for Millennials – that are causing the homeownership rate of Millennials to be so low.
The infographic below compares the traditional, linear lifestages of a baby boomer and contrasts it with the contemporary, nonlinear lifestages Millennials must navigate.
Don’t Blame Millennials for Low Homeownership Rates
HousingWire published an article “This is why you can’t blame Millennials for low homeownership rates”. They state that there are several factors involved in the low homeownership rate of Millennials, including a strong rental market and a lack of traditional household formation.
Increased connectivity and instant access to information have resulted in positive and negative results. One of the negative results is the disjointed, unpredictable lifestyle. The stress of this type of lifestyle can cause fatigue. One of the positives is that there is so much more opportunity available to everyone now. This connection economy, as Seth Godin puts it, we are in now is leveling the playing field in many industries and savvy people are capitalizing on this.
I am a true believer that communities are better served by citizens who own the home they live in. This is often times not possible in higher cost regions, like San Diego, but if a resident owns their home, they will be much more invested in making their community better.
My hope is that more Millennials chose to buy a home. I think this will likely happen, but just like with marriage, owning a home will happen later in future generations’ lives.