By MARISA LORANGER, Staff Reporter
When people envision the American dream they usually mean getting a job, getting married, buying a house and having children. However, many young Americans are deciding that some of these things aren’t for them. This generation, also known as millennials (generally born between 1981 and 1995) see buying a house as a luxury not a necessity, unlike their baby boomer (generally between 1946 and 1964) counterparts.
Some millennials are breaking from the norm though. Brandon Errer, 19, who very much considers himself a millennial, owns a home on the West Side of Saginaw. Errer, a Saginaw Valley State University student, decided he wanted to put down roots in the city because he loved the culture and community. Errer is part of the fewer than 25 percent of millennials who have taken the plunge into homeownership.
One reason millennials aren’t buying homes is because they are having a hard time finding jobs. They don’t have a source of income to invest in home ownership. When they do find jobs, the job is not in the area that they live, so by not owning a home, they aren’t tied down to any certain place. They have the ability to get out and find a new area of residence.
Howie Eagle, a 23-year-old Saginaw Valley State University student, is much like other millennials. For him, it is best to live at home with his parents. “I stay home so I can save money basically,” says Eagle. Living at home gives millennials like Eagle a chance to go to school and pay bills while also having money to do extracurricular activities. He doesn’t have to worry about saving money for things like home repairs and paying his mortgage. In the future, Eagle admits he doesn’t quite know what he plans on doing, living wise, “I’d be open to whatever the best deal would be for me.”
The Bureau of Labor Statistics October 2014 numbers on unemployment for 20 to 25year olds is 5.1 percent for men and 5.4 percent for women. With the large drop in available jobs, young Americans don’t have much of a choice other than living with their parents.
Brandon Boelter, a 24-year-old Lawrence University student is a renter. He has been renting for two years. Like other millennials, he finds renting convenient because it’s cost efficient and he doesn’t have to live on campus. He someday wants to own a home. “Sense of ownership, make any changes and hopefully have land of my own” are reasons why he feels renting won’t always work for him.
Millennials are more likely to be unemployed as young adults and live in their childhood home than their parents and grandparents were at the same age, according to a review of census data. By living in their childhood homes, it becomes easier to save money and pay off student loans.
Even with big drops in housing prices and interest rates, getting a mortgage has become a lot harder because student loans are hurting the chances young Americans have of getting approved for loans. Lenders require a steady source of income and large down payments before they will even look at potential borrowers. The website Money Counselor explains that nearly 60% of millennials income is going to debt services and it is therefore difficult for them to find money to set aside for a house.
The Pew Research Center explains that this generation’s emphasis on education is having a big impact on homeownership rates, which, “for millennials stands at 37.9%, this is nearly 14% points below the rate for baby boomers at the same life stage.”
“Millennials have increasingly focused on higher education and 34% of the cohort within that generation aged 25 to 32 had a bachelor’s degree in 2013 compared to 24% of baby boomers at a comparable age” explains the Pew Research Center.
Another reason millennials aren’t buying is because they are finding cities and urban areas more appealing than the suburbs that their parents found attractive. It leads to apartments being the only available living spaces for young Americans. The National Association of Realtors found that fewer than 25 percent of 30-year-olds own their own home, compared to 80 percent for boomers, and the number of young homeowners has been declining.”
In the long run, the chances of homeownership for college-educated millennials increases at later stages in life. So, homeownership is not completely out of the realm for millennials, they will just become homeowners much later in life.
Errer decided that buying a home was right for him after living in an apartment for a year. “I was tired of paying rent and not knowing where my money was going. Buying a home meant I knew where my hard earned money was going,” Errer explains. He feels that his money is helping the city and that he is making a future for himself.