Lets discuss why 74% of millennial aren’t buying homes or real estate investing - enjoy! Add me on Instagram: GPStephan
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Studies have found that younger people are likely to move to dense cities in pursuit of a higher salary, but with that comes the cost of unaffordable housing and skyrocketing demand.
With this, we’re finding that millennials want the flexibility to re-locate on short notice for a better career opportunity. Home ownership, in that situation, doesn’t make sense…why tie yourself down to a property when next year you might be on the opposite side of the country?
We’re also, as an entire society, slowly shifting away from owning - and into a sharing or renting economy. Why own a car you use a few times a week, when you can just uber instead? Why go to a hotel when you can AirBnb? The ability to rent just gives you more convenience, for a smaller, short term cost.
But, is renting like this really the smart financial move? Or are millennials just paying extra for the convenience of being able to move whenever they want without being tied down?
Obviously, if the real estate market declines, then chances are - renting becomes cheaper. And if the real estate market continues to appreciate, then BUYING becomes cheaper…but overall, it’s important to understand a few things when you buy a home:
1. First, there is an opportunity cost to your down payment anytime you buy a house. If you’re putting $50,000 down on a property, you’re giving up the opportunity to invest that money elsewhere at a higher return.
2. Second, your cost isn’t just your mortgage payment…it’s also your property taxes, it’s insurance, and it’s normal property repairs which add up over time.
3. Third, buying and selling a property is expensive…between commissions and closing costs, it’s about 6% of the selling price right off the top. So you’ll need to sell your property 6% higher JUST to break even without coming out of pocket.
Overall, however, the rule of thumb is that if you’re going to be living in the property more than 8-10 years, then buying tends to be the cheaper alternative. Any less than that, and you’re speculating that values will increase at such a rate to cover your costs…and if they don’t, you lose money.
I don’t think it’s surprising, at all, that millennials are less likely to buy…on average, they’re less likely to be in the financial position to buy than previous generations, and the expectation of buying real estate is much lower than in previous generations. The mindset has shifted towards a temporary, flexible, convenient lifestyle, and owning real estate to live in - on average - is something people do as they settle down long term.
So in the end, if millennials aren’t buying…that’s good news for me, because as a landlord, that means they’re renting. And also, it means less competition for me when I’m buying real estate…so all around, if you’re investing, it’s a win from a financial perspective.
Anyway, that’s my thoughts on what’s going on and the recent trend away from buying - it’s a shame so many people can’t afford to own real estate, but from a lack of demand, it’s a decent time to be a landlord.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness @gmail.com

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28 thoughts on “Why millennials aren t buying homes”
  1. Avataaar/Circle Created with python_avatars Nate says:

    Maybe it's because the cost of housing is unattainable for younger generations. Graduated into an economy where education was unaffordable, then there was a huge increase in car pricing, major gas crisis, and the housing market exploded and employers want to pay us like it's still 1980. It's not a big mystery.

  2. Avataaar/Circle Created with python_avatars Kris Kirby says:

    One thing that isn’t mentioned as a con of buying a house, escrow.
    Our mortgage/escrow company raised our monthly payment by 200 dollars this year because they estimated our escrow account wrong the previous year and raised the monthly payment this year to make up for it as well as build up a balance so it doesn’t go negative again. So technically the monthly payment can be raised without you having any control or say, and if we were renting we would’ve had the option to move out, but instead we are forced to pay 200 more for at least the next year with nothing we can do about it.

    My Wife is a millennial born in 1996 and im technically Gen Z born in 97, and i can honestly say if I could go back and not buy a house i totally would, but of course our parents all made it sound like buying a house was the best thing to do in our 20s…. Ugh. So now were stuck with a decision we regret until we can pay the mortgage down enough and for the value to increase enough to make selling it even worth it, if we tried to sell it right now we would lose money based on how much money we have already spent on closing costs, repairs, etc.

    Don’t buy into the hype that buying a house is the ONLY wise choice for housing

  3. Avataaar/Circle Created with python_avatars Albert Schultz says:

    This is a Agenda 2030 by the World Economic Forum (WEF) according to Klaus Schwab. He and his team wants this to happen.

  4. Avataaar/Circle Created with python_avatars Necessary Evil says:

    They whine constantly and know nothing. They think if the MW is $15, then literally everyone’s salary will also be raised. Wtf 🤷🏿

  5. Avataaar/Circle Created with python_avatars Bimmer Won says:

    As an engineer I live in a tent on top of my car and clean and bathe in a lake. I only buy food, hygiene supplies, hunting and fishing supplies, and a few other things as I need them. I’ll do this for weeks at a time. Sometimes I just go to my mom’s house to visit for a few days when I’m all wildernessed out and just pay for groceries and cook meals while I’m there. Since I never pay rent or a mortgage, I’m putting away hella bank.

  6. Avataaar/Circle Created with python_avatars Pradigy Musicman says:

    This didn’t age well. Millennials that could have bought in 2019-20 but didn’t buy due to info like this missed out on a TON of equity

  7. Avataaar/Circle Created with python_avatars Paul Williams says:

    I’m not renting or buying property I live in my earth roamer . No landlord will ever make an dime off me .

  8. Avataaar/Circle Created with python_avatars Z Pingley says:

    hi, I'm from the future and can tell you that renting is not cheaper than owning a home in 2022 lol.

  9. Avataaar/Circle Created with python_avatars Lil Pop88 says:

    I think the unfunny joke was pretty funny tbh 😆

  10. Avataaar/Circle Created with python_avatars Jesse Sheets says:

    How do you guys think this vid has aged? Now in 2021, rent has skyrocketed and property values for real estate have jumped ridiculously high. The cost of living for both options has shot up much higher.

  11. Avataaar/Circle Created with python_avatars Zabylurt says:

    Because millennials are not good with money, and cant settle on just one job

  12. Avataaar/Circle Created with python_avatars Venancio Vergas says:

    cant wait till the day of reckoning comes form these smarmy landowners hebes and boomers, gonna love seeing them hanging on the streets.

  13. Avataaar/Circle Created with python_avatars Nanker Phelge says:

    Location, location, location. Move into a small town with a half hour commute to the big city and local banks will fall all over themselves to give you a loan for a home. This home will most probably need some updating. However, If it is basically livable while the homeowner slowly adds in sweat equity, then the dream of owning a home can certainly be realized. You may have to trade your fav 1/2 fat low caffeine latte for ham and eggs at the local diner, but there are many benefits to living in a small town: low crime, good schools, fresh air. After your commute you can actually go for a jog after dark without thinking about your self defense options.

  14. Avataaar/Circle Created with python_avatars Ly L says:

    I recently read “Millennial homeownership is causing the US to run out of houses”. So, maybe Millennials have changed in recent years.

  15. Avataaar/Circle Created with python_avatars Niklas says:

    In germany we have another market, but when you compare it here, with the condition that the Guy invests his cashflow advantage into the stock market, renting is mostly more attractive. I think when your young and build up your career, then you are absolutely fine with renting your home. Later i agree that it can make sense, to buy a home but i think that´s not correct in all cases. Personally i prefer to use my 20´s, to stay flexible, invest everything i can into the stock market and think about buying a home or real estate to rent in my 30´s.

    (Hope my english is ok, still work in progress :D)

  16. Avataaar/Circle Created with python_avatars AsthenicPower says:

    Because I can’t afford it lmao

  17. Avataaar/Circle Created with python_avatars We Reno says:

    Don’t need to watch. Cause we are all broke

  18. Avataaar/Circle Created with python_avatars Roy Patterson says:

    You are wrong. My niece, who is 26 bought a house. Of course she has a MS and makes $140,000 a year. She got some grants to go to college. Her student loans are paid. Her house has gone up $150.000 here in Phoenix

  19. Avataaar/Circle Created with python_avatars AJ Brooks says:

    Remember in this economy people's don't have any money, the landlord's I'm not wanting to do their job and they have over leverage themselves.

  20. Avataaar/Circle Created with python_avatars manofweed1 says:

    On top of it, US houses are dirt cheap.. ..And huge !

  21. Avataaar/Circle Created with python_avatars SilverXT says:

    I'm 27 with 100K net worth. Still haven't bought a house.

  22. Avataaar/Circle Created with python_avatars Chris Nilsson says:

    Why aren't millennials buying homes? Because it won't be a buyers market again until the rich boomers and house flippers are dead. In other words, a loooooooonnnng wait!

  23. Avataaar/Circle Created with python_avatars J. Gabe Seibel says:

    Well this didn’t age well….

  24. Avataaar/Circle Created with python_avatars FordFalcon1962nBlue says:

    real estate folks are gona learn the hard way within 10-15 years when their sales go way down because the up and coming generation along with this current one dont boost supply for housing-

  25. Avataaar/Circle Created with python_avatars TheSkepticSkwerl says:

    Everyone saying "everything is too expensive" that's a lie. Wages are too low. America loves giving all the money to capital holders. Aka billionaires. Stop believing democrats and republicans. Fight for minimum wage raises. Fight for medicare for all. And so on. The system is rigged, and the true colors are starting to poke through. Now that millennials are vastly poorer than baby boomers from when they were our age, you have to realize it's wages. It's capitalism unleashed.

  26. Avataaar/Circle Created with python_avatars TheSkepticSkwerl says:

    The real reason is capitalism has made us poorer than any previous generation.

  27. Avataaar/Circle Created with python_avatars MagnetClip says:

    Don't forget the tax write off every year

  28. Avataaar/Circle Created with python_avatars The Graham Stephan Show says:

    Did I just hear the word millennial?!

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