My parents bought their first house only six months after they were married. That was six months into my father’s Ph.D. program, and without the help of either of their sets of parents. When their children started to graduate college, home ownership was the farthest thing from our minds. We came of age during one of the worst economic recessions in recent history and, like those raised during the Great Depression, had learned to be money hoarders, rather than money spenders.
Say what you will about Millennials, but their debt is not housed in the housing market—it’s in the education market. Fewer and fewer young people are still holding on to the dream of home ownership—at least, in the near future. The recession is partially to blame. Many young people watched their neighborhoods proverbially crumble around them, as neighbors began to default on their loans and were forced out of their homes. They watched their own parents struggle to stay on top of mortgage payments. They watched their college funds, often stashed in money market accounts, tumble away into worthlessness.
A recent study conducted by Hart Research Associates found that most young people believe renting to be a better option than buying and that renters are less likely to have financial troubles than those who buy a house. During the first part of this year, homeownership rates have dropped to twenty-year lows, largely due to this attitude.
So, is owning a home still part of the American Dream? Surveys conducted by Merrill Lynch show that over 80% of Millennials still consider homeownership to be an important aspect of the American Dream. So are young people just turning away from that dream altogether?
Not entirely. In recent months, more and more young people have begun to show interest in home ownership. Though 70% of the population still believes that we are in the midst of a financial crisis, more and more people are reverting back to buying homes and are abandoning the cycle of renting. When young people realize that making the investment right now allows them to live more stable financial futures, and that there are unlikely to be interest rates this low for generations to come, it makes sense that home buying is again on the rise, even among the generation who had previously shunned it.