A young woman standing on a balcony in the city

If you're not sure you plan to remain in your current city forever, renting makes it easier to pack up and relocate. (Getty Images)

Real estate has historically been one of the most stable and sound investments available, and for decades, homeownership has been a milestone on the path to adulthood and financial security. Because homeownership can help to anchor communities, the government encourages homeowners with tax deductions that aren’t extended to renters. Many Americans consider their home as their largest asset, and for decades, despite economic peaks and troughs, home values have overall increased.

However, this trend appears to be changing as millennials are becoming homeowners later in life than previous generations. According to a 2019 report by Apartment List published in November, 12.3% of milliennial renters plan to "always rent," an increase of nearly two percentage points from the prior year. For certain, the way in which millennials view homeownership and its associated roots has come to influence housing trends in an increasingly noteworthy manner.

[Read: Buying a House in 2020: What to Know]

Whether you are a millennial or not, here are reasons you might still be renting, even if you can afford to buy:

  • The recent history of U.S. homeownership is discouraging.
  • Increased mobility.
  • Simplicity of living.
  • Delay of personal-life milestones.
  • Cash flow and other investments.

The Recent History of U.S. Homeownership Is Discouraging

Real estate has been a good investment over the last century, but the 2007-2009 economic crisis discouraged millennials. “Most millennials graduated just before or during the Great Recession, caused by … mortgage products going awry,” says Jodi Zamore, 37, who works in marketing in New York City. “Watching loved ones struggle with homeownership while dealing with the ripple effects in the economy, it’s not at all surprising that millennials and other renters have doubts (about buying).” She adds: “Nobody wants to get caught up in a broken system.”

Increased Mobility

As society becomes increasingly connected, it is easier than ever to move cities for a new job or relationship, and moving is far harder if you own versus rent. Eric Kerrick, 32, is an entrepreneur who lives in New York City, the fourth city he has called home in a decade, and he explains that “it can be easier to view your home as a hub to run your life out of, instead of as somewhere to settle down.”

The additional fact that millennials don’t stay in any job as long as previous generations has resulted in a greater sense of impermanence and a willingness to move to a new city for a promotion or new opportunity. And with living expenses higher than they’ve ever been, focusing on career progress is a higher priority for young people today, even if it takes you to another city.

“I haven’t honestly thought about buying a home because I’ve been focusing on my career,” says Samantha Wolinsky, 33, an entertainment publicist who just moved back to Los Angeles from New York. And for homeowners, moving for a job proves trickier: Nancy Schuler, 37, a human resources executive at an investment firm explains, “I would not have been able to move as easily for this opportunity in Austin had I not had great real estate agents and family to help me sell in NYC.”

[Read: Why You Should Take Your Real Estate Agent's Advice]

Simplicity of Living

Possessions and a mortgage are an added weight to mobility. “Of course mobility is a big one for this younger generation, and it encourages them to live simply,” says Monica Fuentes, 43, an economist and portfolio manager in New York City. “Millennials have a different value system, much of it based on experiences over possessions. They love to travel, they practically invented fast fashion, and they don’t seem to aspire to drive around in a Ferrari like maybe my generation did.”

A lease as opposed to a mortgage may also encourage more minimalism in terms of personal belongings. “Rentals don’t feel that permanent. I haven’t amassed as much stuff as I might have if I owned a condo. I also aspire to a clutter-free life, and that usually means digitizing everything and purging every time I’ve moved," Wolinsky says.



Delay of Personal-Life Milestones

Many people delay buying a home until they are married or have a family, as they might feel more tied to a certain community. “People are putting down roots later in life,” Fuentes says.

“Buying a home made more sense once we were married,” Zamore says. She notes that her husband’s “added income and skillset as an architect meant that we could not only build a home together but buy a fixer-upper and hopefully make a good return, which made the whole investment seem more worth it versus keeping our money in the (stock) market.”

But for Evan Seigerman, 31, who works in financial services in New York City, there isn’t much of an incentive to buy, even now that he’s a newlywed. “The expense of maintaining our rental isn’t burdensome for us," he says. "Our rent is less than the carrying costs of a comparable owned apartment. Buying an apartment and then renovating are two major expenses that neither of us wants to deal with right now because they seem so expensive and exhausting.”

Cash Flow and Other Investments

It is no secret that purchasing and maintaining a home is more expensive than ever, particularly in big cities like New York and San Francisco, where even with low interest rates, $1 million doesn’t seem to go very far. Furthermore, student loans have become an increasing burden for younger generations, eating into their ability to save.

[Read: Are Your HOA, Condo or Co-Op Fees Too High?]

Danny Bartels, 23, a consultant in Chicago, would love to be a homeowner once he can afford it. He says he recently paid off his student loans with help from family, but rent is still his biggest expense by far. Garret McKay, 33, a Los Angeles-based screenwriter, says that “my student loans are all paid off and I am now saving, but during my 20s, a lot of my money went to paying off school debt. My parents were homeowners well before they were my age.”

The desire to own a home seems common among young renters, but it’s not as feasible for them as it was for older generations. Many of them feel ready to buy a house, but don’t have the resources yet. Bonnie Halbfinger, 30, who works for a nonprofit in New York City, says, “Once I have a more stable foundation, it’s definitely a priority for me to invest in (a home).” In the meantime though, she’d “rather rent in the city than buy outside of here,” she says.

Even after the down payment, carrying costs often aren’t low. Andrew Hirshberg, 32, an account manager for a luxury furniture company in New York City, explains that “my condo fees have gotten high, and it might now be cheaper for me to rent something similar – especially in the current market.”

In order to afford increasingly expensive basic costs, many younger people have one job to pay the bills, and another to fuel their passion or help save, often referred to as a “side hustle.”

“One of the things I love about millennials is that that they really aren’t just one thing. They have broad skill sets, they’re more open-minded than anyone who came before them and they’re really worldly," Fuentes says.

Real estate remains an attractive asset and younger generations will eventually seed roots, but it may take longer. And they will bring their values, possibly disrupting traditional homeownership, to create new norms and efficiencies, much like they have in so many other aspects of life.


10 Ways Millennials Are Changing Homebuying

The generation that's taken over homebuying

Shot of an attractive young couple moving house

(Getty Images)

The Great Recession delayed many millennials from being able to buy a home, but the generation isn’t locked out of property ownership the way it was a few years ago. The National Association of Realtors defines the millennial generation as people born between 1980 and 1998, and according to the 2019 NAR Home Buyer and Seller Generational Trends report, they make up 37% of all homebuyers in the U.S., the largest share of any generation. Over the past five years as millennials have become a significant portion of U.S. homebuyers, they’ve also helped shape trends in location and home type preference, helped usher in technological advances and embraced new platforms that make a home purchase feel more user-friendly. Here are 10 ways millennials are changing the homebuying process.

Updated on Feb. 26, 2020: This story was published at an earlier date and has been updated with new information.

Text communication is key.

Text communication is key.

Young man texting from home in stylish apartment

(Getty Images)

The telephone was once the primary form of communication between real estate agents and their clients, but the younger generation that has grown up with internet and cellphones will likely prefer more text-based modes that make it easy to multitask. “A lot of my clients already work in tech, so their expectation is they’re going to work with an agent that can at least keep up with them in terms of communication,” says Dana Bull, a Realtor with Harborside Sotheby’s International Realty in Marblehead, Massachusetts, who specializes in working with homebuyers. She says millennial homebuyers prefer to text and email their agent more often than older generations, and it’s reasonable to expect they’ll be comfortable using real estate-related apps.

Research is a natural part of the process.

Research is a natural part of the process.

Cropped shot of an attractive young student working on her digital tablet at home

(Getty Images)

When it comes to researching neighborhoods, checking out listings online and doing a deep dive into the fine print of a pending deal, millennial homebuyers are known for doing their homework. Jill Levin, a Realtor with Coldwell Banker Legacy in Albuquerque, New Mexico, says she recently represented some buyers in a deal that went particularly smoothly because the buyers read every disclosure and document sent to them and asked questions beforehand – something she doesn’t see from older buyers who feel experienced enough that they don’t need to read into the details. “There’s way more information today now, and (homebuyers) really, really should be paying attention,” Levin says.

The hub for advice is online.

The hub for advice is online.

Unrecognizable woman uses a digital tablet to shop for a new home. She is reading information about a two story home in the suburbs.

(Getty Images)

While apps and online search tools are an integral part of the homebuying process for all consumers these days, millennials are the first generation to grow up using technology broadly in everyday life. The familiarity with smartphones, social media and the internet make communication, finding out information and contacting professionals easier. Millennials are also inclined to shop around for everything from real estate agents to mortgages to contractors. In HomeAdvisor’s State of Home Spending report released in June 2019, the majority of millennials, Generation X and baby boomers research home remodel project costs on the internet, but millennials do so by the largest margin (77%).

Homeownership is focused on building wealth.

Homeownership is focused on building wealth.

Young family stands outside of a new suburban home.

(Getty Images)

While purchasing a home involves plenty of hurdles for younger buyers, many of them are choosing to become homeowners because it helps them build wealth in the long term. “There is still interest in buying a house because I’ve got a job, I need a place to live, rent is expensive and I should put my money somewhere,” Bull says of the millennial homebuyer mindset. As they build equity in their home, they’re in a better place to purchase a larger house in the future or use the profit of a sale for other investments.

Kid-friendly housing makes a comeback.

Kid-friendly housing makes a comeback.

Children Helping Mother To Make School Lunches In Kitchen At Home

(Getty Images)

Homeownership isn’t the only thing that millennials are doing later in life for financial reasons. Millennials are also marrying and having children later than previous generations. But as millennials get older, more are getting to the point where they’re starting families. While a condo in the heart of downtown worked for many first-time millennial homeowners when they were single, home preferences change as soon as kids come into the picture, Bull says: “People are starting to step up into that next level of a single-family home and maybe out in the suburbs.”

Walkability is a must.

Walkability is a must.

Couple Walking Dog Along Suburban Street

(Getty Images)

Even with many millennials leaving urban centers, one feature they won’t compromise on is walkability. “They want more activities in the area, they want walkability, they want the convenience of shopping without having to use their cars a lot,” Levin says. Even in more suburban settings, many millennials are showing a preference for areas that offer residential and commercial spaces within walking distance. Bull says the areas catering to these homebuyer preferences have been dubbed “hipsturbia,” where suburban towns offer an active downtown or main street area with the live-work-play atmosphere many people don’t want to lose when they move out of a major city center.

Eyes are on garages and kitchens.

Eyes are on garages and kitchens.

Young bike commuter leaving garage.

(Getty Images)

Luxurious features and finishes in a house are ideal, but millennial homebuyers are making their must-have lists a bit more realistic. In a survey of 1,000 Americans who plan to purchase a home in 2020 by real estate information company Clever, millennials' preferred home features focused on details that make life more convenient, especially as they start families. When asked which features are a requirement for their new home, millennial respondents placed a garage, large kitchen and space to grow into as their top three priorities. Details like hardwood flooring, a fireplace, pool and dedicated office space were among the lesser-desired details.

High home prices don't deter eager buyers.

High home prices don't deter eager buyers.

Real estate agent with couple in luxury home. They are shaking hands. There is a water view, kitchen and living room in the background.

(Getty Images)

Affordability is still an issue for many millennials, especially among the younger members of the generation. But that doesn’t mean millennials are uninterested or afraid of purchasing a home – it’s just a matter of the right timing, the right location and the right home. Between consistently rising home prices and a lack of inventory as homeowners choose to remain in their homes longer, the housing market remains extremely competitive, Bull says, especially in the Boston area where she works. But the millennials who are financially ready to purchase are willing to rise to the challenge. “They’re used to being aggressive to get into the college they want, and then get the job they want,” Bull says, which primes them to make a strong offer if they see a home they like.

Low down payments solve savings issues.

Low down payments solve savings issues.

Happy couple at home paying bills with laptop

(Getty Images)

The Clever survey found 70% of millennial homebuyers plan to make a down payment of less than 20%. Low down payment programs have grown significantly in the past 10 years and are now a major part of home purchases – NAR’s 2019 Profile of Home Buyers and Sellers reports that the median down payment for a home in the U.S. is 12% of the purchase price. While low down payment programs help resolve the lack of savings, homebuyers putting less than 20% down should be sure to factor into their budget the added monthly cost of private mortgage insurance.

Parents play an important role.

Parents play an important role.

Shot of two men working on a project together at home

(Getty Images)

For younger millennials and even Generation Z, which is made up of people born in 1999 and later, coming up with the cash for a down payment is one of the biggest obstacles to becoming a homeowner, even at less than 20% of the purchase price. For millennial first-time homebuyers and the rare Gen Zer getting into the market, financial help from a loved one is often what makes a home purchase possible. “Parents are getting involved a lot – I still see a lot of situations where parents are gifting money or helping in some other way,” Bull says. “I don’t see that changing at all.”

Here are 10 ways millennials are changing homebuying:

Here are 10 ways millennials are changing homebuying:

San AntonioTexas suburban housing development neighborhood - aerial view with houses in rows in middle-class neighborhood

(Getty Images)

  • Text communication is key.
  • Research is a natural part of the process.
  • The hub for advice is online.
  • Homeownership is focused on building wealth.
  • Kid-friendly housing makes a comeback.
  • Walkability is a must.
  • Eyes are on garages and kitchens.
  • High home prices don't deter eager buyers.
  • Low down payments solve savings issues.
  • Parents play an important role.

Read More

Tags: real estate, housing, housing market, home prices, new home sales, existing home sales, pending home sales, renting


Steven Gottlieb has been at Warburg Realty in New York City for seven years and is a well-respected industry expert. Born and raised in Manhattan, Gottlieb earned his bachelor’s degree from the University of Pennsylvania, his MBA from the University of Michigan in Ann Arbor and his Master of Science in Real Estate from New York University. Prior to joining Warburg, Gottlieb lived in Los Angeles and worked with some of the biggest Hollywood talent in the world at United Talent Agency and Paradigm Agency. His strong referral base is a testament to his success and reputation in the business, and in 2018, The Gottlieb Team was the No. 1 producing team at Warburg Realty, company-wide.

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