Mortgage rates are down slightly again, but first time home buying has slowed down and even dipped. In 2015 the percentage of first time home buyers was at 32%. Contrary to the expectation, the reality is that recent grads and others in the younger portion of the Millennial group have more expenses than other generations.
- Going out
- Student Loans
- Car Loans
I could rattle off a few more but for now these will do. So lets pick out and explain a few:
Going out: This may seem like an easy one to cut out if your an older generation, but the truth is we like to have fun. Going out makes us forget the rest of the bullshit on this list so no we wont get rid of this one. Now, we might limit how much we go out in a week or month, but not going out at all is not an option when clipping expenses.
Student Loans: This one will keep us from buying homes and living at home the most drastically. The range for some loan balance a month is between $200 and $1,000. That additional expense should be a mortgage payment, and now it is not. The amount on average borrowed for a 4 year education is $30,000, or a good-sized down payment.
Insurance: The rising costs of insurance (Medical, Car, etc) is not cheap anymore. In 2015 the average cost for Millennials insurance was $486 a month. Insurance is not wanted but needed, and many of us see it as unnecessary, especially because we can stick to our parents plan until we’re 26.
Retirement: For older generations this might be the saddest reality for the younger generations knowing the fact that 80% of Millennials do not invest. Investing can be anything, but in this case it’s stocks, which are a basic form of investing when you do not know how bonds, annuities, 401k, ROTH or Traditional IRA’s work.
In turn, all these things add up. And if you look at this list of common Millennial expense, the fact that workplace wage increases have been happening do not really help. You can increase the amount of money you pay someone, but it does not matter when their list of expenses grows higher than your increase. One thing that some bigger companies how incorporated into their pay packages (Like having an automatic 401k option) is paying off their workers student loan debt.
Still, living at home seems like a good option and the housing market will continue to slow down if some of these things are not looked at. No one cares or looks at “Net Worth”, or considers the impact of owning a house with tax benefits and and tying it to retirement.
Cover photo: Startup Stock Photos