Why Millennials Are Not Buying Houses Or Cars
“Since World War II, new cars and suburban houses have powered the economy and propelled recoveries. Millennials are not buying houses or cars, and may have lost interest in both.”
You mean the generation that paid three times as much for college to enter a job market with triple the unemployment isn’t interested in purchasing the assets of the generation who just blew an enormous housing bubble and kept it from popping through quantitative easing and out-and-out federal support? I’m curious as to how they have rationalized we have simply “lost interest”.
Let’s face facts. Unless you are independently wealthy, houses are a financial deathtrap. This is something I think a lot of people routinely overlook. Many young people would rather rent an apartment, or better yet purchase a more readily mobile ‘tiny house‘, than live in a permanently fixated on-the-grid home.
With a fixated house you have to repair anything that breaks, keep it up to code yourself, do all the yard maintenance and outside maintenance so that it conforms to community standards, and live where the house is, out in the suburbs or rural areas, which can means 30 minutes of driving into town if you need something.
Whereas from an urban apartment I can just walk to the store, or even to my place of employment if I am double lucky. Home Ownership has big risks for people on any kind of budget. Furthermore, a lot of people, old and young, are increasingly adopting this attitude. It’s better to pay your rent, or better yet none at all in your semi-mobile home, knowing that you get exactly what you put into the dwelling. What does a mortgage get you? Thirty years of repayments tied to a single geographic entity? Coupled with interest? All from a loan which was created out of thin air!? That sounds like heartache to me. I don’t like to be taken for a fool.
How about the talk of it being an “investment” in a market that doesn’t really provide any return? What if it’s in an annoying location that is a pain for commuters and socially active young people? How about those yearly property taxes which can essentially be translated as a form of state-sanctioned rent? It often amounts to thousands of dollars in it’s own right, even for a very modest-sized house.
My point is, that even if you could get financing to buy a home, that’s money that you could spend on a rental (or better yet tiny house) and spend your weekends actually enjoying your life and spending time with your family and friends. Sure, home ownership is a valid concept about buying tangible assets (the assets most worth having), but it means you’ve bought into the concept of living in the golden ghetto that McMansions and cars required.
Cars are an expense that generation Y is trying to live without. Just give a young person the hypothetical option of a free $1,000 smartphone or a $5,000 used sedan. Most will realize that the car is monetarily more valuable, but what do they really want out of personal and lifestyle choices from those two options? I’ll give you a hint, it’s the phone.
Petroleum is never going to go back down to a 1950’s or 1990’s level of affordability. We need to invest heavily in public transit, and with emphasis on high-speed rail. All that money spent on wars could have built a transit system that could rival that of Europe’s and Northeast Asia’s.
But I forgot, we are the United States. We’d rather worry about why more young people are not driving and paying almost $5/gallon of gas. So I’m sorry to be the bearer of bad news to older generations who think that Millennials are too “lazy” to get homes and cars. A new car, and a permanent abode of any kind, is an unimaginable luxury. Many people are paying more to their student loan lenders each month than their landlords.