In pursuit of the American Dream, Americans have historically combined economic and social mobility with home ownership. People move to get a job (or a better job), buy a house, and raise a family – a traditional journey.
Something is happening in the millennial generation. This generation is moving less and renting more. Is this a temporary anomaly or a new trend, and what does it portend for the American ethos?
According to Forbes, home ownership has historically been good for the economy. Home buying has a multiplier effect. Along with buying the house comes purchases for new furniture, remodeling, lawn care, etc. Home ownership has been beneficial to society, as well. Neighborhoods, where inhabitants own their homes, have lower crime rates and less drug usage. Children tend to do better in school, and citizens are more involved in their communities.
In February, the Pew Research Center released an analysis of American migration rates since the 1990s. The decline in mobility appears especially incongruous since the millennial generation is characterized as having fewer ties than previous generations. Millennials are marrying later (or not at all), having children later, and buying homes at a lower rate compared to previous generations. Yet they are moving less.
It is now 2017, and the downward trend continues. Home ownership is at a 50 year low. Is the American Dream changing? More likely the dream is deferred. In the April 2016 National Association of Realtors HOME (Housing Opportunities and Market Experience) Survey, 88% of millennials expressed the belief that home ownership is part of the American Dream.
Reduced mobility and less home buying may be the effects of the Great Recession (2007-2009). Reduced earnings, high student loans, and inability to find jobs have resulted in an increased number of 18-to-34-year-olds living with their parents than living on their own. Home buying is more likely to be out of economic reach. In the most recent National Association of Realtors HOME survey, 56% of the respondents who do not currently own a home expressed that it would be somewhat difficult or very difficult to qualify for a mortgage.
Given the boost to the economy provided by home ownership, the inability or difficulty in purchasing homes is likely to suppress any robust recovery from the Great Recession.
Although millennials may move less because fewer of them own homes, it is more likely other economic and social factors are at play.