Millennials are the generation which believes in frugality as we have already noticed how careful they are in spending cash or investing in huge places. Millennials prefer to be pre-planned about their life like career, marriage, retirement etc and they would definitely love to own a house if given an online purchase option as these people are technology people who prefer digital life to everything else.
Millennials know the value of money and how hard they have earned it, so they don’t prefer risking their chances and after facing the recession, they have come to understand how hard it is to continue without the flow of cash so they keep pushing the idea of owning a house back in their mind for later when they are totally settled.
Unlike others, millennials have taken the era with rise in new technologies which consumes most of their time and money apart from rent and food, leaving them no time to hunt down the best house and buy it for themselves as the idea of renting a room sounds like a music to their ears as all you need to do is search online and move in. Two decades ago, investing in a brand new car or buying a new house wasn’t a big deal but now we see that Millennials are hardly interested in making these investments early in their life.
We know that somewhere down the line they wish to have a home of their own but the fact that they are getting married and settled late, leaves them no room to buy a house for themselves as they would prefer to settle the major demands of life first and have no clue if they will be able to save and buy a home for themselves.
There could be many factors that influence millennials from staying away from mortgages but here, we will be targeting few:
1. Fear of debts and mortgage:-
Millennials know that once they invest in purchasing a home then they need to take out extra cash separately and pay for the mortgage which may be a challenge for them. Most of these millennials are trying to get an educational degree with student loans on their head due to which they find investing in mortgages hard, so this is one reason where they push the idea of owning a home behind their head and try to be happy with renting it out.
2. They hate the extensive loan procedures:-
Millennials are people who believe in getting things done with the click of their fingers online. If they decide to purchase a house then the extensive procedure of personally visiting the bank and discussing the mortgage value along with all the paperwork etc just pisses them off and they dismiss the idea even before it begins.
There had been efforts made by millennials to apply online for mortgages but the procedure and the efforts were fruitless as at one point they get stuck or either up end up in unreliable service. To have a secure loan they need to visit the bank to sign the legal documents so when they hear about it, they turn their head away as this is not for them.
3. Changing social trends:-
Before people preferred to move out of their parent’s house and rent an apartment but now millennials have no issue staying with their parents and sharing their house. Even if they decide to move, they would prefer to rent an apartment as a single person with no plans of owning a home for themselves until they find a person to settle down with separately.
4. Losing freedom:-
Millennials believe in sticking to their freedom and going around places for their jobs or to have fun but if they own a house in a place then they will be bound to that place and lose their freedom, so they prefer to be unbound rather than owning a house for themselves.
One of the main reason we see millennials not interested in buying a home is because of their lack of awareness about the down payments and low credit ratings. Most of the time they are quite wrapped with an idea that they won’t be able to afford a home for themselves that they don’t give themselves a chance to fully acknowledge what financing options are available to own a house for themselves.