“If money can’t buy happiness, I guess you’ll just have to rent it.”
Derek Thompson wrote a piece for The Atlantic about why young people aren’t buying more houses. The reasons are as you would expect; student loan debt, marrying later, lack of funds. There is a reason, and I think a big reason, that he left out: fear of commitment.
Thompson mentions fear of the economy and uncertainty about future employment as a factor. He’s certainly correct that those are major contributing factors. Beyond that, however, I think even young people who are settling down (getting married, having children, starting down career paths) are wary of committing to something as long term and financially significant as a house.
Prior to the Great Recession, it’s unlikely that upper and middle class young people even knew anyone who had experienced foreclosure. Now, 1 in every 70 homes is in default. Those rates are even higher in states like Nevada where 1 in every 16 homes is in default. Our parents’ seemingly safe neighborhoods are now littered with “Short Sell” signs. We are acutely aware that foreclosure could, ever easily, happen to us.
Since we’ve now seen what happens to people who are foreclosed on, we know how stressful and humiliating the experience is. We may have witnessed friends or families having their belongings stacked in the front yard; we’ve been exposed to the sleepless nights of people terrified over losing their home and to our friends changing schools or dropping out of college as a result of their parents’ dire financial situation.
We also know just how hard it can be to get rid of a house if you lose a job or need to move for a new job. We’re coming into maturity in the worst housing crisis ever. Breaking a lease is easy when compared to selling a house with an underwater mortgage. And we also know just how valuable mobility can be. My generation keeps in touch with all of our classmates from high school and college. We read on Facebook that our friends are living in South Dakota or Washington, DC and their companies are hiring. Our parents may have spent their entire working lives at a single company, but we know that we won’t.
To us, homeownership seems less like the American dream and more like the American albatross.