The desire to buy a home has not subsided across generations. Part of the American Dream is to have a family, a home, financial stability, and the freedom to partake in leisure activities. Although many millennials are more interested in traveling and leisure experiences than in material items, their desire to purchase homes is increasing.
As found by Zillow, home values have risen by about seven percent within the past year and are expected to continue to rise. Despite the rising prices of homes, millennials are currently the largest group of recent home buyers and are making their first purchases around the same age as that of previous generations, according to the National Association of Realtors. With the great student loan debt many millennials have taken on, it is surprising that they can make first home purchases at an age equal to that of previous generations. Even more surprising is that about twelve percent of our youth purchasing homes are unmarried couples.
How are millennials able to purchase homes under such stressful financial conditions? The answer is likely in our young people’s budgeting abilities. Yes, millennials budget while also purchasing ten-dollar Starbucks’ lattes. Hear me out.
Millennials tend to save money by purchasing single-family homes in suburban areas, where prices are typically lower compared to urban settings. One possible reason for the budgeting practices of millennials is explained by a study conducted by Eventbrite. The study found that seventy-two percent of millennials plan to increase their spending on experiences, such as traveling and concerts, than on material items. Perhaps stereotypically, about 70% of millennials involved in the study wished to increase their spending on leisure activities after becoming jealous of their friends broadcasting fun experiences on social media.
Millennials also have greater access to loans compared to previous generations, and thus have a greater chance of making successful housing purchases. Although our young people today have larger financial debt, their ability to purchase homes has gone unscathed in comparison with previous generations at the same age. The American Dream is still alive, and many Millennials are reaching that dream in their own way.