Wealth Gap Widening as Few Millennials Buy Homes
We've been telling you for years now: Millennials are not as likely to buy a home as you and those of previous generations may have been as young potential homeowners.
While this is bad news for the economy overall, from sales to jobs, it's also not a good sign of what's to come for the millennials themselves, who are missing out on what's known by many as the strongest financial asset.
Hit hard by the recession, and trying to catch up, those born between the early 80s and late 90s are way behind earlier generations in entering the housing market, according to James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.
Some are just more interested in renting than buying, but the generation's absence from the housing market has generally been fueled by last decade's recession and the recovery since.
And as home values increase, owners prosper and millennials continue to fall behind.
According to Zillow, home values in New Jersey have increased 5 percent over the past year. Another 2 percent rise is anticipated within the next year.
"Housing investment has historically been a painless way of building up your financial assets," Hughes said. "Every month you have forced savings by making a mortgage payment, whereas when you rent the money just goes down the drain."
Adding to the pain for millennials is rental prices, which have soared over the past few years. With the right mortgage, it'd be cheaper to buy a home than rent, Hughes noted.
"If you find a housing unit you like, even if it's not your forever home, it probably makes sense to buy it," he said, adding it's an unwise strategy to wait outside the housing market until one finds their dream home.
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