7 things the new generation does differently when it comes to ownership
Buying a property has always been a major rite of passage for a person. Whether they are young or old, it marks a time in their lives when a huge change is taking place. Owning a property is a way to become a fully established adult who has a major commitment to something, outside of a family of course, so it makes sense that it would be such a valuable investment.
Before, buying a property was very easy. People would work, save money, then buy a house and a mortgage, sometimes even get a loan. Now owning a home or property is much more different than previous generations. New generations of young people, especially millennials and the next Gen Z, find the process a little stranger.
Working 9 to 5 isn’t always enough now, and sometimes it’s hard to get loans because they’re trying to pay off student debt or other expenses. This has inevitably led the new generation to do things differently when it comes to their property or lack thereof.
Here are a few ways to do it differently.
1. Rent rather than buy
The first is major and that is that young people find themselves renting instead of buying. There are several reasons for this: 1. The ability to participate in living in a luxury apartment is often cheaper, or more realistic, for their age and professional situation. 2. They want to live in big cities where jobs are more plentiful. 3. They need flexibility in their life to travel, so it makes more sense not to be tied to a property. These are some of the reasons that younger generations choose to rent property or apartments instead of owning them.
2. Take out longer-term mortgages
There are generally two types of mortgage loans: short term and long term. Most younger generations will be looking to buy their home using a mortgage, as paying a larger down payment can be more difficult with debt or fluctuating market costs for a home. A longer term mortgage costs less on a monthly basis, even if the loan term is longer, which is attractive to people who need to pay off debt, save money, or budget. This is a way that a lot of young people try to own their own property because they are committed to it for a longer period.
3. Sublet or rent their property
The idea used to be that you just buy a house and live there, but now things are changing. The cost of living is increasing due to factors like inflation and other factors, so people need to make money with more than just a salary or a job which is why they use their property to sublet or rent. Rental property allows people to live in the same building that they are renting or to give someone the opportunity to live somewhere. It helps people find a place to live or find another source of income to pay off mortgages on their personal property.
4. Find roommates
Running out of money is not an unusual occurrence, so sometimes the best way to reduce this concern is to find someone else to live with who can offset the costs of the property or apartment. Living with a roommate and sharing the rent is a good way to lower the overall cost of the rent or mortgage. Living with roommates has become the norm for younger people, and it is not uncommon for people to now have roommates in their 30s. Likewise, many people share the rent with a loved one when they move in together.
5. Buy a house later in life
It’s no surprise that younger generations are buying homes at a slower and slower pace than previous generations, so it’s also not shocking that they are buying homes later in life. It was common for someone to graduate from college, find a job, and then buy a house within a few years, but that’s not the same world more. It is harder to find good paying jobs out of school coupled with a higher cost of education, more expensive loans / debts and property, it takes a long time for people to finally get the job done. ‘offer their own home. Sometimes, it’s not uncommon for people to go their entire lives without buying their own home.
6. Buy smaller houses
When young people end up hoarding money to afford their own homes, it’s also not shocking that they buy smaller homes as well. Large square footage homes, with a lot of property size for a yard, quickly become less profitable. It is not economically viable to buy a mini mansion like it used to be, let alone the fact that many young people understand that they do not need as much space at home as their parents’ generations or Grand parents. Smaller families have helped with that, but also eliminate the need to downsize later in life, which is a big weight off their shoulders.
7. Living in cheaper areas
Living in the city is fun when you’re young. There are more job opportunities, a bigger dating scene, more variety in culture, food, entertainment, and it’s a place where young people can thrive, but it’s also very expensive. There aren’t so many opportunities to own a home in a city, and sometimes apartment life can seem too limited, so the younger generations are starting to think outside the box. They are move to the countryside and smaller communities where there is work, but also more housing available. This drop in the cost of living makes home ownership more possible at a younger age, even if it is further removed from city life.
The homeownership trends for younger generations are not surprising, but it’s worth examining them to understand why homeownership and apartment rentals are so different from older generations. These 7 things are some of the ways the youngest people buy a home and property in their life.