Starting in the spring of 2021, we’ve been examining how Millennials have been caught up in a set of circumstances that have kept over 50% of them from becoming homeowners. Our report in several parts, Millennials and homeownership, a distant dream for most, outlines the challenges American millennials have faced financially and documents their attitudes toward home buying aspirations. We looked at a number of factors affecting this group and analyzed the response data for three distinct age groups within the generation: junior millennials aged 25-30, middle-aged millennials. ages 30 to 35 and mature millennials ages 35 to 35. 40.
Here, I’ll share some of our findings on the effect of Covid-19 on this generation’s efforts to access the housing ladder. Our investigation was conducted a year after the pandemic hit the world. The feelings we have captured are likely to be reinforced by the spread of variants, setting the tone for generational attitudes for some time to come.
About a third of survey respondents said the pandemic had delayed their home buying plans by four years or more; more than one in ten have completely abandoned their home ownership project due to the pandemic. Almost half of millennials (47%) we surveyed were negatively affected by Covid.
Our data shows that Covid has changed the perceptions of millennials about where they might live. Seven in 10 (68%) of millennials we surveyed agreed that Covid had some impact, from minor to very strong, on their thinking about geographic possibilities. Affordability drives the vast majority of these attitudes and decisions. When we conducted the survey, a quarter of the millennials we surveyed were living with family or friends while trying to get back on their feet. Here is a text comment from a millennial respondent:
ââ¦ I had no intention of moving, but I lost my job when the pandemic started. I was unable to pay rent for the whole of 2020 resulting in a “pay or quit” notice. Although I had some protection under the Covid relief laws, I felt compelled to move. At the same time, I was able to get a full-time, well-paying job. After considering my options, I realized that if I moved in with my parents (who wouldn’t charge me rent), I could pay off my debts and save for a down payment. I plan to buy a house in the coming year, to be closer to my family.
Many millennials we interviewed were disheartened enough by the housing shortage due to a pandemic that they gave up on the idea of ââhome ownership altogether. in suburban areas. Those who were already saving for a down payment were less likely to abandon their homeownership plan, but nonetheless, the majority of those who had already saved said Covid delayed their plan.
Covid has made cities even harder to afford
While 68% of millennials we surveyed said Covid had some impact on where they thought they could live, one in five were heavily influenced by the pandemic to rethink their location. With companies delaying their return-to-office dates and growing fear and uncertainty around the Omicron variant, these numbers are likely to rise. For millennials living in large cities, the pandemic had the strongest impact on these perceptions – about 28% of them said they were ready to reconsider their current location. Our research shows that half of millennials would like to move to a different place than where they currently live; among Junior Millennials (the youngest), 26% said they had been strongly or very strongly influenced by the pandemic to reassess their location. Here is a particularly poignant comment:
âWe live in a crumbling economy and take jobs we tolerate for the dignity of a salary. The houses in my area (and the taxes attached to them) are astronomical. So the choice seems to be a) stay close to everything I love and be taken to the hospice or b) walk away.
Many of those looking to relocate have accepted the idea of ââmoving to a smaller, more affordable place, but a quarter of those surveyed, mostly motivated by millennials seeking well-paying jobs in big cities, s ‘cling to the dream of moving to a bigger city. Among those who wanted to get out of the big cities, expectant parents and millennials who were already saving for a down payment on a house were at the forefront of migrating to smaller places. Usually, those who hadn’t started saving to buy a house before the pandemic want to live in big cities.
Has Covid catalyzed change or has it just stoked existing conditions?
Our research suggests that, despite the severity and high social impact of Covid, the pandemic appears to have worsened pre-existing housing trends, rather than generating new ones. Many millennials have said the pandemic is just one more obstacle on the way to their home buying dreams, for example:
âOur generation has seen many setbacks in homeownership between the stock market crash and the pandemic, the student loan crisis, the cost of living rising much faster than the rate of wage increasesâ¦ it has was extremely difficult to even be able to save money. “
Since landownership is the fundamental way most people build wealth, this research has opened our eyes to the seeming intransigence of America’s Millennials. With chronic and on-going problems such as record student and medical debt, decades-long salary stagnation and only just starting to ease – add to this unpredictable crises like the pandemic – it all weighs on their lives. ability to gamble. move on to home ownership. In the next articles, we will continue to explore these themes and suggest some possible solutions..