I assure you I am late because I have been being very productive! Here is a question for you as always, how do you find the real estate market right now? If you are a realtor then the market is hot. The house bubble is great for making that BIG extra bit of change. Though from a first time home buyers perspective this outlook is dramatically different. If you are Gen Y/Millennial, you are between the ages of 18-35—you are intimidated by the current hot market. Would you choose to rent or own a house?
I know as a millennial, you come across individuals on Instagram and other social media platforms who are flaunting and selling their tempting lavish lifestyle! The ones that live in a 4000 square feet bungalow with surrounding glass windows facing a gorgeous water view. Tempting but unrealistic! Nonetheless that’s the American dream! But can you even afford that American Dream? How long do you have to save until you put down the deposit on your first house? Even if you choose to buy a house what if the market crashes and you lose money? Decisions, decisions, decisions!
The traditional American Dream is set as an expectation for us when we are young. It is instilled in our mind as a definition of success. If you own then you are successful. Hence, if you own a house, you are perceived as established. For an American Dream to be complete, you need to own a big beautiful house at a reputed area, have a really nice gleaming, eye catching sports car (I think it has to be red, as I imagine it) and also don’t forget to marry a very ravishing gorgeous lady or handsome successful business tycoon. A little exaggerated, but you get the point! The point is that not everyone is Evan Spiegel!
Fun fact, studies show baby boomers purchased homes not only because of the American Dream, but also they subconsciously feared of getting Alzheimer’s at an old age. Having Alzheimer’s and not owning a house would get in the way of security and safety. They also bought places to not to be a burden on anyone especially their parents. What’s your inner reasoning for buying a house?
Weigh your options & also change your perception
Think about it! Why should you own a house and why you shouldn’t? What does your finance look like? If you didn’t buy a house, what will you be investing your money on? Are you buying because it adds to the things you own or do you think of it as a security. Are you buying because of social pressure? Are you buying it as an investment? How does buying now benefit you in the long run or how does it stop your progress? These are important questions I never got to put my mind on. I saved and saved, then I bought two houses. Which is great, I am happy. Being in it for the long haul even if the market crashes the value will only slightly depreciate (that’s my self-pep talk).
If you are capable and you want to own a property as a security then by all means. Given that after the purchase you still have money left in your bank. However, the perception of ownership has changed overtime. It’s merely impossible for some to even put down a down payment due to the high prices in the market. Statistic show 65% people rent homes in the United States. Then we have Uber, who drives to work anymore? If not Uber then people choose to lease or finance newer models of cars. More and more people are starting use clothing subscription services such as Trunk Club and Stitch, where you hire stylists to pick out your clothes and return whatever that you don’t like.
Why Millennials choose to Rent?
Millennials choose to rent because of mobility. You are more mobile if you rent. Your finance is not stuck and you can use the same finance that you would use to purchase a house on another investments and securities such as education. Millenniala choose to put down the funds towards higher education to become more scalable. This open up prospects not only within region but abroad. The option of being more mobile makes it easier for them to relocate.
Happy Decision Making!