The homeownership statistics reveal that in North America – USA and Canada – Millennials delay the purchase of their first property up to the whopping age of 40-year-old. Admittedly, you will find young adults who are already homeowners in their early 30s, but the tendencies seem to buy at a later point in life.
There is, of course, a variety of reasons for this choice. But most Millennials agree that they’ve actively decided to remain in a tenancy agreement contract to avoid the difficulties of homeownership. Money is a primary issue as the prices on the property market have been increasing steadily over the past few decades. But it isn’t the only excuse for extended tenancy preferences. In fact, Millennials are very sensitive to the commitment, both in financial, geographic and emotional terms. Sociologists often mention that the fast and changing pace of digital communications might have affected the mindset of young adults, making them fearful of long-term obligations. There’s no denying that there is some truth in the hypothesis; however, with careful planning young adults could learn to manage the obligations of their property investment.
The fear of commitment to a location
Choosing the location of your home is a difficult process. While a tenant can decide to move to a new rental if the location were not suitable, you can’t easily buy a new home. Location, ultimately, defines how you’re going to live your life, namely in terms of your local community, the facilities in your surroundings and your workplace. It’s not a decision you can tackle from Google Maps. You need to physically drive through the neighbourhood and get a feel for the local community. You want, as a rule of the thumb, a property that suits your lifestyle, aka with manageable commuting distances to work, school, roadways, amenities and friends. Additionally, other considerations such as the width of the street, parking availability and how safe you feel in the community. While there is no guarantee that your work won’t require you to relocate, selecting the place for the time being can make a great deal of difference.
The financial anxiety about the down payment
In a rental, you might need to prepare a deposit amount to the cost of one to two months rent. When it comes to the down payment of your first property, you might need to pay up to 20% of the value of the house. Compared to a two-month rent deposit, that’s a humongous amount of money to set aside! Consequently, for many young adults, the fear of a crippling down payment stops many on the path to homeownership. In reality, while it can be tricky to save money, it’s not impossible if you put your mind to it. Decluttering your rental by removing everything you don’t need or want – assuming you own the items in the first place – can make it easier to raise enough capital. First, get rid of the things that are not needed. Then you can move on to the items you specifically don’t want but that are still usable – these you can sell online for instance.
The lack of funding options
Saving for your deposit is only one of the financial obstacles you’ll face. Finding the right mortgage for your situation is going to be a stressful process. Indeed, bank institutions offer a limited range of mortgage loans, which may not be suitable if you’ve got a bad credit score, for instance. However, don’t despair. You can’t find other lenders through professional mortgage brokers. Contrary to your banker, a broker can offer a large selection of loan options, which are more likely to suit your specific financial situation.
The worry you can’t cope with home responsibilities
Tenants don’t need to look after the property. Aside from the necessary cleaning obligations, their duty of maintenance is limited. Landlords, however, are responsible for all repair, improvement and remodelling works. So, when you become a homeowner yourself, your responsibilities increase dramatically. For young adults who have not needed to worry about the plumbing system or the boiler contract until now, homeownership can feel like a burden. There is no secret formula; you need to keep a checklist of essential tasks to maintain your property.
The lack of job security affects your mental health
The modern workplace is a source of high stress. Indeed, the absence of job security in most companies makes Millennials more vulnerable to a financial backlash. Additionally, the freelancing trend makes it also difficult for young adults to stick to long financial commitments. Consequently, the choice to take a mortgage can become an incurable cause for worry.
Worries are the main reason why you decide not to buy a home. Whether you’re worried about the location or your financing options, some obstacles can be tamed with the appropriate solution. Others, however, require faith and optimism.