Zoomers and Millennials are leaving the nest later than generations before them, delaying a major milestone of young adulthood – or skipping it altogether and, though it might sound like a bad idea to some, one relator says it's a good way to get ahead.
"I think it's an amazing trend," Orlando-based relator and TikTok creator Freddie Smith told FOX Business.
"I know maybe a lot of kids don't want to hear that. They want to graduate and move on and be independent but, with the cost of living, I think it is such a huge benefit if you have a great relationship with your family, if you can stay home and get rid of the housing burden. That is the biggest thing that's really hurting people today, because people are spending about 30 to 40% of their income on rent."
Foregoing homeownership isn't so much a decision as a predicament in many cases. It's a byproduct of financial burden – or, rather, the reluctance to plunge into deeper financial insecurity – as other debts pile up from student loans, credit card payments or even car ownership.
It leaves many waiting for their chance at self-sufficiency, including Indian Head, Md., Mayor Brandon Paulin who, according to a recent article from The Washington Post, made the sacrifice of living at home with parents for years to save up for his shot at the American Dream.
It paid off when he and his wife were able to afford a down payment on a 2-bedroom home.
"It wasn’t the conventional way to buy a house," Paulin said in the report. "But it’s what worked for us."
But other housing trends have dominated the current economy, like renting.
Smith said that's because the "goalpost has been moved," making it harder to qualify for homeownership.
"Now you need over $100,000 in salary to qualify for the average home in America," he explained.
"So how many Americans make over $100,000? Or how many families make over $100,000? I think about 30%, which is great for them, but there's a huge swath of the nation who doesn't, so they've been edged out of homeownership if they don't already own one, and now they're forced to rent, spending 30% or 40% of their income on rent, so it makes it more difficult to save money, pay off your student loans and things like that."
But a recent study on Zoomers, for instance, found that they're even shirking off renting and owning thanks to "lower earnings, costlier goods and student loan debt," and are living at home to "boost savings."
Smith said, for younger Americans, living with a couple of roommates or staying at home with parents is a great idea to help curb the cost of living and save up for better opportunities to come in the future.
EMPTY NESTERS NOW OWN TWICE AS MANY LARGE HOMES AS MILLENNIALS WITH KIDS AS FAMILIES ARE EDGED OUT
"There's no shame in it," he continued. "And, even for us millennials, you can't feel shameful if you got to move back home for a couple of years just to get your debt paid off. We have to do drastic things like that these days to get ahead and become debt free."
He told FOX Business he has noticed younger Americans feel surprised and frustrated by how quickly the standard for middle class life changed in America, particularly after setting expectations in childhood after seeing their parents, grandparents, aunts and uncles owning homes in the 1990s and early 2000s.
"They're just surprised when they finally hit that 70k mark, that 90k mark, and they're like, 'I'm ready to buy. Let's do it,' and I hook them up with a lender, or they find a lender, and they realize like, 'Oh, I'm 40,000 short in salary to get the basic starter home,'" he said.
"I think it kind of hits with frustration, so the conversations I've been having and making videos about are just giving millennials, Gen Z and first-time homebuyers a different alternative and continuing to have this conversation about what the middle class is and what is the American dream now, because it's changed, and we shouldn't feel bad as millennials or Gen Zers, that we can't follow what the previous generation did."
Another reason young adults are foregoing homeownership now? They're waiting to start a family.
According to Investopedia, American millennials are likely to marry and have children later than previous generations, a decision which also keeps the group home with parents even longer.
"Life events such as getting married or having children are typical triggers to buying a home. The longer this age group lives with parents or independently, the more homeownership will be delayed," Bank of America said in a report on Millennial home buying trends, according to the outlet.
CLICK HERE TO READ MORE ON FOX BUSINESS
Despite the cultural emphasis placed on homeownership over the past decades, Smith maintains that today's young adults can seek the American dream elsewhere, and perhaps the picture doesn't have to include owning a home like they originally thought.
"Let's make our own path and define our own American dream. It may or may not be with homeownership," he said.
