Aspiration & Struggle
Is Homeownership Part of the Millennial American Dream?
In “The Epic of America,” published in 1931, James Truslow Adams describes the American Dream as the idea “of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.” For decades, homeownership has been a major tenet of this dream. But as Millennials overtake Baby Boomers as the largest generation, the common definition of the American Dream is changing.
According to a Gallup poll conducted in April 2015, 41 percent of Americans who don’t currently own a home don’t intend to buy one in “the foreseeable future.” That number is up 10 percent from just two years ago. This makes sense, though—Millennials value the ability to travel, and many see no reason to settle down just yet. As a result, homeownership has become less important.
Why Is Homeownership Going Out of Style?
Several factors have made Millennials reluctant to dive into the housing market. To many members of Gen Y, it’s no longer the prized goal it once was.
Millennials in general are highly educated, which translates to student loan debt. In 2012, seven out of 10 college seniors graduated with debt, according to the Institute for College Access and Success. A 2014 study conducted on behalf of Wells Fargo found that debt is the number one financial concern for 42 percent of Millennials.
Access to higher education also means strong career opportunities. Young professionals are often associated with job-hopping, but that’s not necessarily a bad thing. Changing jobs can lead to career advancement, higher pay, and valuable experience and skills. The average Gen Yer stays in a job for three years before moving on. In other words, they’re prone to exploring new locations as they search for better positions.
In addition, Millennials are waiting longer to marry than previous generations. Several decades ago, the median age for marriage was about 23 for men and 20 for women. Today, it’s 29 for men and nearly 27 for women.
Already facing the financial burden of student loans, Gen Yers may not want to take on more debt. They’re not tied into a 40-year career with a single company. And they’re not in a hurry to create traditional, nuclear families. Homeownership is a nice option for some, but more Millennials are finding value in renting rather than taking on the responsibilities of owning a home. This allows them to focus on debt repayment and take their time before choosing a place to put down roots.
What Does the Millennial American Dream Look Like Instead?
Time highlighted the 2013 State of the American Family survey by MassMutual, in which 38 percent of Millennial respondents said that travel is part of their American Dream, and 26 percent said that self-employment is, too. Gen Y values freedom and flexibility, and they’re willing to try new ways to achieve this in their own lives.
“Most of my clients value flexibility, and owning a home may or may not fit into their desired lifestyle,” says Eric Roberge, a certified financial planner for professionals in their 20s and 30s. “The American Dream is certainly shifting from homeownership to having the freedom to travel, own your own business, and enjoy yourself throughout your life.”
Roberge did just that when he created Beyond Your Hammock, a business that helps others design this type of lifestyle. “Homeownership isn’t mandatory anymore,” he explains. “If it does fit into the lifestyle you want, it’s still an option, but people shouldn’t buy a home just because they think that’s the next step to take in life.”
Kali Hawlk is a financial writer and the marketing manager for XY Planning Network. She is passionate about helping others do more with their money, their careers, and their lives. You can find her on Twitter @KaliHawlk.