Despite all the attention paid to millennials and their perceived preference to rent versus own — they aren’t alone. No one really ever has bought a house.
Obviously, I’m getting at something. Every real estate agent reading this will tell you, people are buying and selling homes every day. My point is people don’t buy the house — they buy the dream.
And up to this point, millennials simply have a different dream.
This percentage is vastly eclipsed by prior generations at the same point in their lives. Promises of tax breaks, equity and historically low mortgage rates are not enough to entice them into homeownership.
To answer that, we have to examine the broader picture. We have to understand what else they are saying “no” to. Here’s a short list:
- Marrying young
- Building a family
- Sticking with a single employer, community or even geographic region
- Increasing an already heavy debt burden
- Settling for others’ standards, ideas or expectations of success
In contrast, they seek convenience, mobility and the ability to embrace variety in their lives. They thrive on the flexibility of choice and a wide array of options.
They’re on an extended journey of self-discovery as they explore the broader world around them. Maybe because as a group they’ve had to “wait their turn” professionally — they’re in no hurry to settle down in life.
More than anything, they’ve eschewed perceived stability because their experiences have shown that stability to be a lie. Economic downturns, negative equity and unstable job markets have drastically shaped their perception of the American Dream.
Even their broader education — something that previous generations either needed less of or took for granted — has created for them previously unseen levels of debt.
With all of that in mind, it’s really no wonder that they value versatility over constraint. It’s no surprise that the “instant gratification” generation is more than a little skeptical of gratifying themselves with a 30-year mortgage.
What has to change?
Firstly, those factors that made homeownership so appealing to the generations that came before. We buy a home when we’re finally ready to put down more permanent roots.
As they age, experience promotion at work, build relationships and most importantly settle down with a partner and kids, their dream will change as well. But not necessarily in the same form we understand it today.
This is a generation that appreciates and demands innovation. Changes in our current system that complement their group identity will entice them to join in.
Banks or mortgage companies may consider creating mortgage products that allow for shorter terms, reduced fees and an easier exit. Real estate firms could adjust costs to buy and sell in a faster cycle and reward retention of service with reduced commissions within a specific period of time.
Employers who have experienced a downturn in loyalty should consider building in benefits that help create longevity through homeownership. Solutions like these could be possible ways to lend flexibility to homeownership stability.
The bottom line is that in spite of all the noise being made about this group of individuals, their motivations deep down remain the same. They seek happiness, gratification and fulfillment in their lives.
My generation found that personified in the “white picket fence,” safely protecting kids playing on a green lawn in a safe neighborhood. We wanted large yards and good neighbors.
We derived pride in showcasing a grand foyer and crown molding. It wasn’t so much about the house, but what it felt like to have been able to achieve it, live in it and enjoy the spaces it provided to grow together as a family.
When today’s generation is at the point in their lives that it becomes important to them, they’ll buy the dream too. Maybe in a different way; perhaps a little later in their lives — definitely on their own terms.
But they’ll buy. Not the house of course, but the dream it represents. Just like the rest of us. And as a result, the innovations they demand in other aspects of their lives might bleed over into the real estate world.
Sounds like a dream worth buying.