Millennials are on the fence about buying homes. Here are 3 reasons for this homeownership trend. Learn more.

1. Critics have called them entitled and blasted their work ethic; they’re a group that has grown up
with technology and introduced Gen X-ers and Baby Boomers to a “sharing economy.” What-
ever your opinion of millennials, economists say it’s time to pay close attention to them for one
reason in particular: The massive consumer group that numbers roughly 92 million is now enter-
ing its peak spending and home-buying years (ages 25 to 45).
However, millennials still aren’t completely sold on the idea of
buying a home. According to a survey published in January by
Millennial Branding, 59 percent would rather rent than buy a home
and only 25 percent said they were likely to purchase one in the
next five years. But that news also comes amidst other reports
about frustrations with rising rents and millennials finally getting
ready to buy.
With low interest rates, buyers can save plenty on their monthly housing expenses. A Zillow
survey from December 2014 found that homeowners spend about 15 percent of their income on
their monthly housing payment while renters pay nearly double that amount. So, the question
still looms: When will millennials finally take the homeownership plunge?
In its defense, this group faces plenty of realities in the home-buying conversation. Here are a
few of them:
1. Debt concerns
College is a priority for the millennial generation, but it comes with serious sticker shock.
Tuition rates are still skyrocketing. The average student loan balance for today’s graduate
is approaching $30,000. At the same time, wage growth is slow.
A 2014 survey from NeighborWorks America found that student loan debt is the largest
obstacle to home buying among those who have debt. Further, 24 percent of respondents
knew someone who had delayed a home purchase because of student-loan debt.
Why Are Millennials Still On The Fence
About Homeownership?
continued on next page
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By Brian Sodoma
...59 percent would rather
rent than buy a home and
only 25 percent said they
were likely to purchase one
in the next five years.

2. “I think a lot of millennials have not had the opportunity to be in a position to buy,” said
Jared Kushner, CEO of the Kushner Companies, a New York-based real estate firm with a
portfolio that includes more than 20,000 multifamily units. “I also think that there is a lot
more unemployment among recent college graduates than there should be.”
2. Jobs on their minds
Kushner is right. Unemployment among 25-34 year-olds is still higher than other age groups.
As of March, unemployment in this group was 5.6 percent, compared to 4.1 percent for 35-
44 year-olds and only 3.7 percent for 45-54 year-olds. But at least these numbers are
moving in the right direction: unemployment was at roughly 11 percent for 25-34 year-olds in
2009 and 2010.
“With the years of unemployment and underemployment we’ve gone through, [not buying
a home] actually seems very logical,” added Lindsey Pollak, the best-selling author of Be
coming the Boss, which addresses managing millennials in the workplace.
Other data also points to millennials—perhaps rightfully so—being a bit job obsessed,
Pollak said. She references a study by The Hartford titled Gen Y Grows Up that found 51
percent of millennials consider the mark of adulthood to be, not getting married, starting a
family, or buying a house, but getting that first job.
3. Urbanization trend
Millennials, particularly younger ones, helped usher in a trend towards amenity-rich properties
in urban areas, added Kushner.
These environments tend to be in pricier locations that lend themselves to renting and also
bring a sentiment somewhat against ownership, according to Pollak. “To many, it’s less
important to own the address when you can rent the runway.”
Some developers have found ways to actually blend high touch and affordability. Kushner’s
team recently developed luxury rental properties in Jersey City, he says, that have now
become an answer to affordability for New Yorkers tired of high rents.
“We spend a lot of time focusing on that creative environment,” Kushner added about
designing properties for millennials. “We want to have the right shops, the environment,
and what it takes to give them that great experience.”
Signs millennials might be ready to buy
As rental rates continue to climb at a hefty clip, older millennials could finally be losing their
patience and might be ready to buy, even if it means moving to the suburbs. “The upper end
of the millennials [demographic], those in their 30s... I think their sentiment might change,”
Kushner said.
Even though millennial unemployment is higher than other age groups, it is getting better right
now. The employment rate for 25-34 year-olds in January 2015 was at its highest level since De-
cember 2008, according to data from the Labor Department reported by Bloomberg. And wages
are rising faster for millennials than older age groups, Bloomberg also reports. Ultimately, the
decision to buy may come down to whether millennials can make the long-term commitment.
“I think it really depends on how much you want to be tied to a specific area and if you think
you can be happy there for 30-plus years. If you think you can, it often makes sense to buy,”
Kushner said.
This content first ran on CIT Voice on Forbes.
Brian Sodoma is a Las Vegas-based freelance writer with a focus on health, business and real estate. He has written for several
publications, including Vegas Seven, Las Vegas Review, and Vegas Inc.