Many Millennials plan to "rent forever," - and it doesn't seem like they will change anytime soon.

According to a recent article, their biggest hurdle to homeownership is student loan debt.

So how are they going to catch up with previous generations?

Let's take a look.

Will Millennials Have to Rent Forever?

While most Millennials may not own a home, there are a few reasons why they might not want to or even be able to for that matter. For instance, you have the extremely high price of housing right now! They also enjoy the flexibility that renting offers, which means they don't have to be tied to a particular area or neighborhood. Also, along with some not wanting to own a home, they might not even need to buy a car, because of ride-sharing services like Uber and Lyft, but that’s another story…Ha-ha! Finally, there’s the student loan debt that a lot of them have too.  

Do Millennials Plan to "Always Rent"

Many millennials are not ready to buy a home and tend to rent for longer than previous generations.

According to a survey by Apartment List, 12.3% of millennials say their plan is always to rent, up from 10.7% a year ago.

The survey found that millennials are more pessimistic about homeownership than their parents were.  

One major reason cited for this trend is the high cost of housing and the high levels of debt they’ve incurred, particularly student loan debt.

While many millennials want to own their own home, they are concerned about the costs and risks of owning a home.

Florida's millennials who plan to always rent cite affordability as the largest obstacle to homeownership.

Despite their increasing salaries, millennials still struggle to afford a home.

More than half don't have enough savings to cover a down payment.

The rising cost of housing and student loan debt seems to be the two major obstacles when it comes to them purchasing a home. 

So, even though some Millennials were beginning to save for a home, many still can't afford that down payment.

Because of this, more Millennials are giving up on buying a house and plan to rent through retirement. 

Another reason a lot of millennials are renting is that they don't want to be locked into a mortgage for years and years to come.

Mobility is also a huge motivator for millennials, who are building their careers and may not be in a position to purchase a home at this time.

They seek a lifestyle that provides convenience, mobility, and a sense of community.

So, for many millennials, a rental apartment is better than a home.

Renting will let you easily pack up and leave for a new job.

Since you don’t have that 20 or 30-year mortgage tied around your neck that can sometimes hold you down like an anchor. 

One of the biggest benefits of renting is flexibility.

Renting also means they have more money to spend on other lifestyle activities.

For example, they can spend more on their hobbies, such as traveling.

Since a lot of millennials are more willing to shell out cash on experiences rather than on things.

In addition, renting has fewer commitments, which millennials value highly too.  

Moreover, millennials tend to marry later than their parents did.

The median age of first marriage is the highest in history.

This delay in marriage also delays the time when they can earn joint incomes with their partner.

As a result, many choose to continue renting until they are married.

Finally, renting can be a better choice for those unsure of what they want from their home.

Student Loan Debt is Their Biggest Barrier to Homeownership

According to a new report from CRL, nearly half of millennials say that student loan debt is their largest barrier to homeownership.

The survey also shows that millennials would pay off their student loans first if they had the opportunity.

Furthermore, despite the aforementioned barrier, these millennials still have significantly more money than their renter counterparts.   

Still though, for many Americans, student loan debt is their biggest obstacle to homeownership.

With over $1.7 trillion outstanding, it's a large burden and far outweighs auto or credit card debt.

Also, unfortunately, education loans can affect your mortgage eligibility, and you can be denied a loan if you fall behind on payments.

This can reduce your credit score and make saving nearly impossible.

In 2009, the homeownership rate for borrowers with student debt was 24.6%; however, it fell to 18.6% in 2019.

This drop in the homeownership rate is pretty alarming.

Also, more than one-third of millennial borrowers say they would buy a home if they didn't have student loan debt.

Luckily, there are ways to get out from under your debt.

Some Millennials Blame the Older Generation

According to Legal & General, a global financial services company, most millennials want to own a home someday.

However, the housing crisis has aided in causing a generation gap, and some millennials blame the older folks for pushing them toward having to rent forever.

One of the reasons millennials blame the Baby Boomers for what they say is cutting them out of the "American Dream" is because a great deal of them are buying starter homes instead of more expensive ones. 

This has helped to create more competition for a limited supply of houses on the lower end of the spectrum.

Just a little caveat, a lot of people, including me, don’t attribute the drastic rise in single-family home prices recently to the more usual way a house increases its value, through appreciation over the long term.   

But instead, as more of a shorter-term feeding frenzy, probably at least partially brought on by the pandemic, which helped cause bidding wars. 

Another thing, there is a portion of millennials who began saving in order to be able to buy their first home while still in their 20s, but because of skyrocketing home prices, many cannot even afford a down payment anymore.   

So, while some millennials strongly desire to own a home, their debt from student loans along with rising home prices has been their biggest roadblock when it comes to homeownership.      

Also, in earlier decades, home appreciation was the driving force behind most of the middle-classes wealth and was a big help to these homeowners when it came to retirement too.

Now some of the above could be contributing factors as to why one in eight millennials blame the older generation for what they believe will make them have to rent forever.  

Millennials and Real Estate Investing

The millennial generation is not exactly a wealthy bunch when compared to their predecessors.

Many are still in their 20s and even lack the savings necessary for a down payment on a house.  

So, these are some of the reasons that a lot of millennials are having to be creative and make smarter investment decisions when it comes to real estate.  

Millennials are also choosing homes that offer more amenities and convenience when they do decide to buy, whether it be as an investment or just to live in.

Increasing technology and innovation have also influenced some millennials' choices.

They are increasingly interested in smart homes powered by green energy.

Since a lot of them are concerned about climate change and also because smart homes tend to be more convenient & are usually more efficient than traditional homes too. 

Finally, millennials are the fastest-growing demographic, with nearly 72 million people.

So, millennials should dominate the housing market as they age and take steady jobs.

This will lead to them helping sustain and continue the upward trend of the housing market as well as their increased involvement when it comes to real estate investing, which has profited a lot of people over the years.    

Now, anyone reading this who happens to be a millennial, it’s probably not a bad idea to start building your real estate portfolio today.

If done right, you won't regret it!

Real estate can be a great investment.   

So, to Sum it up

Millennials, which the general consensus says were born between 1981 to 1996, often put off homeownership until they reach their mid-to-late thirties. This gives them more flexibility in the job market and allows them to pay off debt while remaining nimble. Moreover, rising interest rates, inflation, and student debt have made it harder for them to save money for a down payment. Not to mention the high price of housing that they are facing right now. So, for these millennials, renting a home is a more sensible financial strategy than acquiring a home. There is also the fact that a lot of millennials would rather spend their money on adventures and life experiences, rather than on physical possessions, at least while they’re still young enough to do it.