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The Struggle, Millennials and Home Ownership (Economy (Wages not keeping…
The Struggle, Millennials and Home Ownership
Economy
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- Middle class life 30 percent more expensive than 20 years ago
- Schooling costs have doubled since the 1990's
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Growth of student loan debt is due to greater college enrolment among Millennials, but it is also due to a changing composition of students, rising tuition, reduced public funding, and diminished home equity
Age
- Ownership among 25 - 34 year olds is half what it was in the 1980s
- Survey found 50.2 per cent of 30-year-olds owned their own home in 2016, down from 55 per cent among baby boomers a generation earlier
- The growth in student debt is another factor
- Millennials born 1981-1996 (22-37 years old)
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Pricing
- Average house price in Toronto around $900,000
- In Toronto, the median house now costs 7.9 times the median household income, up from 5.9 times income just five years earlier
- Average home cost to income was 4 to 1 in late 1960s, compared to 2017 it was a ratio of 10 to 1
- More and more Millennials are relying on loans to pay for post-secondary education
Population
- Millennials are now the largest and most diverse generation in the U.S
- More people attending post secondary schooling,
this may mean competition is more fierce in the Millennial generation for jobs
- 7.7 billion humans worldwide
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3 Main Points
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- Economy factors (a changing labor market, urbanization, high cost of living, stagnating wages)
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Workforce
- A recent Royal LePage survey found the average millennial earns roughly $38,000 a year, enough for a mortgage of just $206,000, or just more than a quarter of the average house price in Toronto
- Finding employment extremely difficult after schooling
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- Housing prices up, Wages down
- Millennials face a different labor market than previous generations, characterized by longer
job tenure, fewer employer switches and career transitions, and lower overall fluidity
THESIS
Owning a home is one of the primary ways to build equity and aids to help establish financial security.
For Millennials the task of home ownership is next to impossible due to the insanely high house prices, crippling student debt, a changing labor market and many other economic factors.
