Millennials spend more than $90,000 on rent by the time they turn 30
Are millennials facing a life of renting?
Here are the facts: Millennials are earning 20% less than their parents did at their age. According to fool.com, “The average worker is somewhere between 24 – 36 years old and earns $10,000 less than their parents’ generation did when they were the same age. This equates to a large decrease in purchasing power. The other factor here is that the average student debt is now double over previous generations.”
The younger generations aren’t moving out in a hurry. In the age group of young adults, there has been an increase of over 5% of people who still live with their parents. Those who have moved out are reluctant to move again for a various number of reasons. Some being a lack of for-sale housing available on the market and other reasons are because they aren’t going through life events that would constitute moving, such as getting married or starting a family until a later age.
The challenges for millennials in buying a home
Owning a home on an average millennial salary is challenging in today’s world. Smartasset claims that millennials make $35,592 per year. The average home sale price in Georgia is $193,000. And seeing that most younger adults don’t have much money put aside for down payments on a house, after property taxes, insurance and other fees, the monthly mortgage would sit just under $1,500 a month which is about 48.6% of a standard income. Either way, millennials are stuck between a rock and a hard place. Rent and mortgage costs end up being above 40% one way or another.
Does it make more sense to keep renting?
Some see renting as “padding someone else’s paycheck”, but is it really the worst option with the way things are? If younger adults are waiting until they start a family to buy their first home, or until they get that big promotion, renting gives them the fluidity to do so with ease. The problem? The lack of investment for one. Renting a home doesn’t give you the same return as buying one does. Currently, USA TODAY says that young adults will spend roughly $93,000 on rent by the time they turn 30. But with the trend of frequent travel and taking opportunities as they come, is it worth the cost yearly to be able to rent where you need to rent in different cities? Some millennials prefer to not be invested in one address for years at a time. Depending on their work life, schooling path, and overall sense of adventure, renting may be the best viable option.
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