Millennials? Ditch the Label | Time for Reality Check

Annie LUI On Ni

Millennials, I dare to say, are the age group associated with the greatest number of stereotypes. Poor work and financial habits? Heavy student loan and credit card debt?

If you are wondering what millennials are buying, let me help you by eliminating houses from the top of the list. Whilst the previous generations considered home ownership a huge milestone adulthood, millennials are delaying this milestone.  

According to CNBC, the home ownership rate for millennials is 8% lower than it was for Gen X and Baby Boomers when they were in the same age group. 

There are a few reasons behind their reluctance to buy: 

Fear of commitment: Millennials treasure flexibility, hoping to take advantage of every new opportunity, like an overseas ideal job offer. They feel like home ownership would act as an impediment to the pursuit of opportunities. Consequently, most of the millennials’ money goes into rent payment, taking up as many as 45% of their salaries.

Lack of starter homes: Business Insider has reported that there is a massive shortage of starter homes in the real estate market, thanks to tougher zoning, a lack of construction labor, and a shortage of land in desirable areas. Competition within the lower price ranges is especially high in the bigger cities where there is more demand for housing.

Prevalence of student loan debt: With high monthly student loan payments and a high debt-to-income ratio, millennials struggle to qualify for a mortgage and keep up with their payments. The rising cost of student debt is a growing national crisis, with 7 out of 10 college seniors graduating in debt. Millennials are combating unprecedented levels of student loan debt, which could affect their ability to pursue other goals, like buying a home, getting married, or starting a business. 

Pursuit of High Quality Living: Despite suffering from the aforementioned plight, millennials adore their quality of life, accounting for 44% of the total coffee consumption, bringing it to an end-time high. Coffee might have served more than a rousing jolt of coffee, more on comfort, community or even a sense of identity. Millennials also expect foods to be sourced sustainably and locally, and the food industry expects millennials to respond by increasing loyalty and ordering more products. Even in the context of transport, millennials make their choices wisely based on cost and efficiency, with Uber emerging as their favorite.  

Support for Charitable Initiatives: What’s more surprising is millennials’ commitment towards charitable causes. Millennials care more about others than you might think, with 84% of millennials making a charitable contribution to worthy causes.

Up to this point, you might picture millennials as big spenders bearing heavy credit card debt, but the truth is they owe a lot less money to the bank! After watching their families struggle with debt, millennials are notoriously wary of taking on consumer debt themselves. That’s especially true when it comes to credit cards. 

Experian reported that consumers carry $6,028 in credit card debt, on average. But for millennials, the number is much lower; they carry an average of just $4,712.