Do Millennials reject the American dream of homeownership?

Do Millennials reject the American dream of home Ownership, or does it reject them?

End-Of-The-American-DreamIf you are over 40, when you entered the workforce, you had little or no debt, there was a job waiting for you, and house prices were affordable. All you needed to do was save a few bucks, and you could buy your own home and live the American Dream. If you are under 35, that isn’t your reality.

For those over 40, I want to perform a though experiment. Imagine you graduated college in the last 10 years, and in order to get the degree that qualified you for a high-paying job, you must give 10% or more of your gross income to a lender for years and years and years, and after you went through all the struggles and took on the onerous debt, that high-paying job you worked so hard to obtain didn’t materialize.

Further, imagine that instead of finding a large number of affordable houses available to purchase, the value of every house on the market is artificially inflated to values so high that even if you didn’t have the onerous student loan debts, you couldn’t afford them anyway — and if by some miracle you could afford the prices, the lack of inventory frustrates your every attempt to find something you want to live in.

If that were your reality, what would you think about the whole prospect of home ownership? What would that do to your dreams?


According to Wikipedia:

The American Dream is a national ethos of the United States, a set of ideals in which freedom includes the opportunity for prosperity and success, and an upward social mobility achieved through hard work. In the definition of the American Dream by James Truslow Adams in 1931, “life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement” regardless of social class or circumstances of birth.

The idea of the American Dream is rooted in the United States Declaration of Independence which proclaims that “all men are created equal” and that they are “endowed by their Creator with certain inalienable Rights” including “Life, Liberty and the pursuit of Happiness.

breaking_freeBy and large do those under 35 have any good reason to believe in the American Dream?

Will they be as prosperous as previous generations? Or will they merely slave away to pay the bills of previous generations and bail out their housing mistakes?

Will they enjoy upward social mobility? Or will they be burdened by the excessive debts required to operate the system created by previous generations?

Will they experience a life better and richer and fuller? Or will they be dutiful slaves working to provide creature comforts to the previous generations while getting none of those benefits for themselves?

Will they believe all men are created equal? Or will they believe they are hapless surfs destined to toil endlessly for their superiors in previous generations?

To be brutally honest, I’m thankful I’m not a Millennial.


It’s been widely reported that Millennials aren’t buying homes (See: Most Millennials won’t qualify for a mortgage until 2019, Imprudent student debt debilitates Millennial home shoppers, and Typical sources of housing demand largely absent). Those that do form new households are overwhelmingly becoming renters; thus homeownership rates continue tunneling to new lows. On the surface it appears that Millennials are rejecting homeownership, but given the circumstances I outlined in the thought experiment above, are they really rejecting homeownership, or is homeowership rejecting them?

Dear housing industry, “Millennials want homes”

June 5, 2015, Brena Swanson

Millennials want to buy. And we are many.

Yes, there are roadblocks to Millennials jumping into housing right now, but this is often translated to “Oh no! Millennials are not buying and all the work that has going into the economic recovery is going to come to a screeching halt.”

Wrong. …

Millennials are not that different from their predecessors when it comes to housing. Factors like student loans and credits scores might create a temporary struggle, but ultimately, we want a place to eventually call home too.


Millenials, good luck finding that single-family detached home close to the city center. If you found it, you wouldn’t be able to afford it, and with toxic mortgage financing unavailable, you won’t be able to finance the ridiculous prices. The days of fog-a-mirror and get-a-loan are gone for good.

Death of the Dream?

So where does this leave us? Are Millennials going to be shut out of homeownership as part of the American Dream? Has the Great Recession merely delayed the inevitable, or has it caused a grass-roots shift in attitudes toward homeownership? Circle_Of_Life_housing

I believe the current generation won’t have the unbridled enthusiasm of the previous generation — thankfully — and they will be more cautious about buying, which is a natural reaction to the carnage they witnessed, but ownership is primal, and no matter how bad lenders and government officials screw everything up, people will still want to own.

With high prices and little prospect for the above-average appreciation the Baby Boomers experienced, owning a home isn’t a “must” like it was 30 years ago, so Millennials don’t feel much urgency. Also, with realtor credibility at less than zero, Millennials aren’t as easily duped by fantasies of boundless appreciation as previous generations either.

Lenders and borrowers perverted the American Dream during the housing bubble as Americans began to define themselves by the size of their house. Wealth became confused with debt; appreciation became confused with income; credit became confused with savings. Rather than viewing the road to prosperity as one that required hard work and delayed gratification, Americans came to believe they could achieve success by simply purchasing the right house and living off the increase in its value. The new American dream required no work, no sacrifice, no experience, no expertise, and no risk, yet yielded unlimited rewards.

These perverted views of what it means to be American are so ingrained in the collective consciousness of Californians, that few remember the real American Dream.

Work hard, save money, pay off a mortgage, and live in your debt-free house on the investment income from your savings in your golden years.

In a sad way, I understand why people bought the fantasy. If offered to chose between working hard and sacrificing to obtain a goal or doing nothing and instantly gratifying all desires, most people will chose the latter. Unfortunately, reality has a way of exposing myths that are too good to be true, and the housing bust destroyed the illusions and perversions of the American Dream created by the housing bubble; unfortunately, no new mythos has yet emerged to take its place.

The American Dream is not dead. The idea of owning a home will rise from the ashes, and the American Dream will once again include owning the roof over your head and the floor beneath your feet. Personally, I would like to see a return to the traditional view of the American Dream: truly owning a home free of any debt. That’s where peace-of-mind reunites with the American Dream.

peace of mind in real estate

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