The American Dream of homeownership is fading among millennials.
Unlike their parents, they show little interest in setting down roots. Instead, they enjoy the freedom and mobility that comes with home rental.
It’s a trend that’s been gaining momentum for years.
There’s been a steady decline over the past decade in the U.S. homeownership rate. It now sits at 62.9%. This is the lowest rate since the census began tracking the quarterly figure in 1965.
And folks age 18 to 34 are a big reason for the drop. Their rate of homeownership recently fell to its lowest in history... 34.1%.
But with mortgage rates near all-time lows, why are the majority of millennials in the rental market instead of buying homes?
Besides obvious reasons like affordability and fewer available starter homes, they’re also faced with hurdles that didn’t affect past generations.
A big one is student debt.
College grads spend nearly one-fifth (18%) of their salaries on student loan payments.
That debt makes it harder for millennials to save for a down payment and afford the other costs of owning a home.
But the bigger question is: Do they really want to buy?
The answer is “no.”
Millennials are delaying marriage and parenthood, the primary drivers of homeownership, until later in life.
And instead, they’re focused on finding the best property to rent.
Since new apartment complexes deliver luxurious amenities like pools, gyms and private theaters, it’s easy to understand why.
Millennials are enjoying all those great rental amenities. If you know someone who lives in a luxury complex, try to get an invite. You will quickly see why the American Dream is fading.