Year to Year: 5 Reasons Why More Millennials Are Choosing to Rent

A recent census study found that millennials (those born between 1982 and 2000) now outnumber all other age groups in the United States. At a staggering 83.1 million people, millennials now represent over a quarter of the U.S. population, and consequently have a significant portion of the nation’s buying power. When considering their impact on the housing market, it’s clear that the future of real estate is in their hands.

The most prominent trend emerging from millennial real estate activities is the consistent choice to rent rather than buy a home. This can be chalked up to an array of reasons, including their experience with the housing market, the desire for convenience and differential spending habits, as opposed to the preceding generations. Nonetheless, year over year millennial are choosing to rent properties rather than purchase, and understanding their characteristics and personalities will provide insight as to why they are doing so. Here are a few reasons:

Less of a Financial Commitment

A recent study found that the foremost priority for millennials in choosing their housing situation is affordability. Since the monthly cost of renting a home is often far less than that of monthly mortgage payments, millennials have opted to go with the more affordable option. Not to mention, a quick comparison of renters insurance with homeowners insurance also shows a much more affordable and attractive rate for millennials who are looking to save their money.

Freedom in Renting

In line with lower levels of financial commitment, millennials tend to lean towards renting due to the freedom it grants them. Millennial lifestyles have been characterized as being fast-moving and adaptable to change. They also have a desire to live in urbanized areas. When considering the long-term commitment that home buying entails, this generation is turned off by the idea of committing to a specific city or neighborhood for long periods of time.

Millennials are attracted to the freedom of renting a property, as it allows them to keep their options open to new experiences and lifestyles as they so choose.

Investing in Themselves, Not a Home

In previous generations, a major component of the American Dream entailed working hard to save money in order to buy in a house. Millennials are changing this whole perception, and creating their own versions of the American Dream. This generation is more focused on investing in themselves as opposed to real estate, as a means of enriching and fulfilling their own experiences. Rather than saving their money to invest in material items (i.e. a home), millennials have been more adamant about spending their hard-earned money on self-enriching things such as travel, education and personal development.

Minimizing Debt Levels

One key issue that is plaguing millennials’ financial situations is their overwhelming debt levels. Fresh out of college or graduate school, this generation has had a difficult time dealing with the debt accrued from student loans, which has impacted their capabilities as consumers. For many, buying a home means taking on even more amounts of debt, which is both daunting and unappealing. As a result, many millennials are turning towards rental properties as a means of keeping their debt levels as low as possible in the face of an unstable job market.

Convenience of Apartment Amenities

One of the more well-known characteristics of this generation is that they love convenience. Growing up in the technological boom, millennials have grown accustomed to an ease of access that was unparalleled in the previous generation.

Apartment complexes provide an array of amenities for millennials that are both appealing due to their convenience, but also in the costs they are able to offset. For example, a major selling point of apartment amenities are the fitness centers or swimming pools dedicated to residents. These features are both easily accessible for millennial renters, and offset the costs of having to purchase gym memberships outside of their complexes.

Why are millennials refusing to put a down payment on a house? They’re trying to save money! Renting is more affordable and offers millennials the chance to travel and wander at a moment’s notice. Really, who would want the added burden of a mortgage payment if you could travel cross-country instead? Millennials know what they’re doing.

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