There are a plethora of differences between older generations, like the baby boomers, and younger ones like millennials. Perhaps the most important contrast between the two is that millennials prefer renting living spaces over actual home ownership. It is this tendency to choose a more flexible, impermanent option that explains several other key differences between generations.
According to 2017 data from Pew Research Center, young people prefer renting more than any other age group. For example, the amount of young adults from ages 25 to 35 that chose to live in and purchase rental property increased 13% from 1961 to 2016. Whereas only 61% of young boomers chose to rent in their 20s and 30s, now that number is 74% of young millennials. This is mainly due to external factors such as today’s young adults accruing much more student debt than previous generations, hindering their financial options when choosing to enter the housing market.
Another reason is more interesting. According to a 2013 Gallup poll, while marriage and having children are indeed goals that millennials wish to pursue, they are postponing them in order to focus on their own career and to figure out what exactly they want out of life. This statistic may stem from taking a look at older generations who got married young and then got divorced quickly after, which led to our country’s staggering divorce rates. Young adults today do not wish to follow in those footsteps or have children before their own lives have even gotten off the ground. According to a study done by the National Center for Health Statistics in 1980, the average age for a woman to have a baby was somewhere between 18 and 23. In 2016, that average is somewhere between 18 and 35. A large percentage of young women still have babies between 18 and 23, but just as many are waiting until their 30s to have kids. This, coupled with student debt, shows how younger generations are not as eager to kickstart a family or slap a $10,000 down payment for a house located in their home town to live in for God knows how long.
We are currently living in a transitional time in our country, where old traditions are being questioned with an introspective eye. Technology is making day-to-day life easier while also limiting the amount of job options available for college graduates in the age of automation. In addition, financial instability due to massive amounts of 18-year-olds taking on over $35,000 in student loan debts do not help the overall economy either. On the plus side, millennials renting can ensure them a bit of flexibility. It allows them to come and go as they please without having to maintain the building themselves, plus it is easy to move out when that time comes. This simple notion of “let the landlord handle it” can be applied to millennials in several other aspects of life.
Whereas older generations preferred building their equity and physically owning things, today’s young adults simply do not see that same value in home ownership or even entertainment ownership. About 15 years ago, people would pay $1.99 to own a song from iTunes. Today, we are all more than willing to pay $10 a month to have access to a digital library that has all the music we can ever dream about, and we are more than willing to keep paying that fee until the day we stop paying, and then all the music blows away like the wind. We used to buy DVDs and Blu-rays but now we just pay for Netflix. We used to buy cars but people are leasing now more than ever.
All of this points to a larger difference between the generations in regards to the importance of equity over convenience. Is it wasteful to simply pay for a service, or a rental property or vehicle? Or is it better for the country as a whole? Is it lazy to not simply buy something, and instead rent it? How should we value ownership going forward? These are the questions that millennials and those of Generation Z are asking in the way they choose to live their own lives.
