Have you ever listened to a stand-up comedian draw parallels between the apocalypse and the day that Millenials take over the work force? Well...that day is almost here. Fear not my Gen X and Baby Boomer friends! Although Millenials are becoming more formidable in today’s marketplace, there’s no reason to run for the hills. They are actually shaping up to be just like you - in pursuit of homeownership as part of the American Dream.
The rental market is FINALLY experiencing a slowdown. According to a recent article by the Wall Street Journal, rental inventory has been rapidly increasing to meet the demand of an outrageously high priced and competitive lease market. According to WSJ, the adjusted rate of apartments under construction now stands at $569,000 nationwide, nearly twice the average of $300,000 from the US Census. The increase in inventory (and various factors listed below) have caused vacancy rates to climb from 3.5% to 4.5% this year.
Why? Well, our entitled, smartphone-addict Millenials are getting older. As this beloved generation ages, they begin to financially mature. It took them long enough, but Millenials are starting to build families in their late 20s and early 30s. If anything will make paying rent seem short-sighted, it’s being responsible for a 4 BD house lease instead of a cheaper mortgage payment for the same size house.
Since 2012, rental prices have outpaced inflation, which could be traced back to declining homeownership. However, according to Zillow, now Millenials make up the largest segment of home shoppers at 42%. Since these young studs are finally wising up with their money, homeownership has risen to 63.9%, which is the highest since 2014.
Things are looking up for what seemed to be our doomed generation. Millenials are finally making the wise decision to purchase instead of rent, and I’m sure they will take all the credit for it.