Millennials Are Giving Up On Homeownership
2019 may be the year of the millennial renter, not the millennial home buyer.
All the hype appears to be getting stripped away as new data is coming out. This struggle to achieve homeownership doesn’t have to be a bad thing. Not even for millennials.
Millennial & Homeownership
Millennials were hyped up to be the biggest home buying force in 2019. Realtors have been pressured for years to prepare and invest heavily in changing their brands and marketing for it. It just may not happen.
The 2019 real estate outlook for millennial home buying has been severely dampened by the fact that most just don’t have any down payment. Half don’t even have a dollar for a down payment. Only 10% have anywhere near what is needed for the most modest homes. A home they probably don’t want anyway.
A new survey shows just how desperate millennials have become:
- 30% think they have a better shot at dating A-List celebs than buying a home
- 42% say they can’t afford to buy a home, even if they want to
- 30% don’t believe they will ever be able to afford a down payment
- 27% say their only hope is an inheritance
- 49% say they’ve had problems just trying to find a job
- 29% would give up their iPhones forever to get a home
- 25% would go to jail for a week to get a home
They are desperate but are giving up all hope.
This is also likely to be a big year for boomer and Generation Z movers. Many will likely have no choice but to rent instead of buy.
It’s Going to Get Harder for Millennial Home Buyers
The bad news is that the next decade is likely to make it even tougher for millennials to buy homes. If rising interest rates weren’t a big enough roadblock, then swelling debt and crumbling credit is the icing on the cake. 7M auto loan borrowers are now more than 90 days past due according to the latest data. That’s in addition to 11.5% of student loan borrowers who are struggling to make average payments of $400 per month. A new recession will make steady high paying salaries even harder to find too, even with a degree.
The Good News for Real Estate Investors
On the bright side, a nation of renters is great for multifamily real estate investors.
It will boost the demand for rentals. With no exit to buy homes, renters are going to have to perform well to keep a roof over their heads. These factors can help boost rents, income, and multifamily property values too.
We’d all love to see millennials more engaged in the real estate market. Perhaps a wiser and more effective way for them to participate in its benefits, for now, is as investors. That may mean starting out by house hacking and making money with Airbnb or trying no money down real estate wholesaling. Then once they achieve accredited investor status, they can begin participating in syndicated apartment deals boost their incomes further, gain stability, enjoy more tax breaks and use it to build real wealth.
ABOUT THE AUTHOR
Bill Zahller is the Managing Partner of Park Capital Partners, LLC and resides in Asheville, NC. As a Multifamily Real Estate Investor and Syndicator, he founded Park Capital Partners, LLC in 2016 after 14 years involvement in real estate investment. He works with accredited investors and professionals who are interested in real estate investment, diversification, and financial freedom.
Bill has been flying since high school. His father was a Naval Aviator and Captain for TWA. Bill has been flying professionally for over 25 years, 23 of those at his current company. He has accumulated over 12,000 hours and 7 Jet type ratings. He has also held Instructor, IOE Instructor and NRFO pilot positions with a large fractional flight company. He is currently flying the Global 6000 in a long range mission capacity. This keeps it interesting – one week its Beijing or Sydney; the next Rio or Rome.
Bill is also the founder of the Asheville Multifamily Investor Club. Visit www.ParkCapitalPartnersLLC.com for more information.