Millennials' 'American Dream' not so different from anyone else's
From the LA Times, by Tim Logan, September 16, 2014:
Maybe the kids today aren’t so different after all.
A survey out Tuesday from The Demand Institute, which studies consumer trends, finds that Millennials have an outlook on housing that’s not unlike previous generations, with most saying they hope to own a house in the suburbs and they’re OK with driving around out there.
The report is a bit of a pushback from conventional wisdom in real estate circles that today’s twentysomethings are more likely to choose walkable urban neighborhoods, or the idea they’re so scarred from coming of age in the housing crash that they’ll never themselves buy. But it also shows that there’s a kernel of truth to those ideas, and bigger barriers to homeownership than previous generations may have faced.
“A fundamental question about Millennials is whether their coming of age in the Great Recession has shaped their goals and aspirations to be different from those of previous generations,” said Louise Keely, president of the Demand Institute and senior vice president at Nielsen. “We found that, while this generation has many unique characteristics when it comes to their housing choices, they share many of the same intentions as young adults in previous decades.”
Of the 1,000 households age 18 to 29 that were surveyed, 84% said they either already own or plan to purchase a home, and 75% described homeownership as “an important long-term goal.” Sixty-two percent said their next home would be a single-family house, and only 38% said they plan for their next home to be in the city. A majority said they were fine being a “short drive” from grocery stores, restaurants and shopping, instead of walking distance, and 88% own a car, down just one point from 89% in 2001.
There were, though, some differences.
As other studies have, this one found that young college grads with student loan debt are less likely to own a house than people who didn’t go to college. That’s a shift from earlier generations.
And today’s twentysomethings have relatively little savings -- about $3,000 on average -- and are less confident in their ability to qualify for a mortgage. That has 69% of them willing to consider an alternative approach to homeownership, like a lease-to-own arrangement.
Regardless, Millennials will be a major force in the housing market over the next five years. The study projects they’ll form 8.3 million new households, and spend $2.2 trillion on home purchases and rent by 2018, one in every four dollars spent on housing nationally.