mybudget360.com / Oct 15, 2016
Millennials are a critical group in terms of where the economy goes in the next few years. The economy largely relies on younger people to spend and purchase consumption items. Think of a young couple buying their first home. That in itself is a big purchase. Then comes big ticket items like refrigerators, a family car, bed, television, and all the trappings of filling a home. Baby boomers followed a very clear script when it came to this consumption behavior. Millennials on the other hand have not. They are largely constrained by a couple of major things that simply were not tied to the previous generation. And what could those be? Millennials are bogged down by student debt and confiscatory housing prices.
Millennials seem to get blamed for a lot in the media. Yet this just seems to go hand in hand with the typical practice of blaming younger people that has occurred for a centuries. One of the big challenges Millennials face is that of purchasing a home. Well how can someone make the biggest purchase of their lives if they don’t have a good paying job or money saved up?
This trend is deeply problematic to the market since housing drives a good portion of GDP. Many younger Americans are having a tough time paying rising rents and home prices have been inflated by short supply and investor activity. The end result is a generationally low homeownership rate.