Are Millennials Ditching Cars And Houses?
Is Generation Y killing the American Dream?
My 37-year-old stepson Matt is married, owns a home and a car, and is the proud father of two daughters. By contrast, my son Will, 10 years younger, owns a car that he uses primarily to drive from one seasonal job to the next. Settling down is not on his agenda.
Will is part of the Millennial Generation, those born between the late 70′s and the early 2000′s, described by Derek Thompson and Jordan Weisman as “The Cheapest Generation” in the most recent edition of “The Atlantic.” The authors discusses the fact that Millennials aren’t buying nearly as many homes and cars as previous generations and proceed to explore what that means for an economy that has traditionally been powered by houses and automobiles.
From The Atlantic:
Half of a typical family’s spending today goes to transportation and housing, according to the latest Consumer Expenditure Survey, released by the Bureau of Labor Statistics.
But Millennials have turned against both cars and houses in dramatic and historic fashion. Just as car sales have plummeted among their age cohort, the share of young people getting their first mortgage between 2009 and 2011 is half what it was just 10 years ago, according to a Federal Reserve study.
Why is the largest generation in American history turning against consumerism?
One obvious answer is that the younger generation simply does not have much money or purchasing power. There just aren’t so many well-paying jobs out there for young people to make a decent living, and Generation Y in general has less money than their parents did at their age.
It’s also true that school is several times more costly than it was for the baby boom generation with several times less support for the students. How can these young people even think of buying a home when they are saddled with horrible student debts?
But this isn’t just about the recession and economics.
My son, and a host of his friends, are not interested in fancy cars or a big house. However, they will wait in line for hours to get the latest release of smartphone, or buy a very fancy bike, or spend a few months traveling to South America. It’s just a different value system. Status has to do with smart, wit or how far you can ride your bicycle. Home-ownership is way down the to-do list.
Part of this new value system has to do with sharing. In many instances, it is easier now to pay for access to items than it is to buy them. Zipcar, for example, the world’s largest car-sharing company, has some 700,000 members and counting.
From The Atlantic:
The emergence of the “sharing economy”—services that use the Web to let companies and families share otherwise idle goods—is headlined by Zipcar, but it also involves companies such as Airbnb, a shared marketplace for bedrooms and other accommodations for travelers; and thredUP, a site where parents can buy and sell kids’ used clothing.
Owning a fancy car is no longer the status symbol it used to be, any more than is owning a home.
None of this very surprising, in light of the knowledge that transportation is one of the leading causes of global warming pollution in the world, and especially in the United States. NASA has reported that motor vehicles are the largest net contributor to global warming pollution.
Our car culture has unleashed havoc on our natural and built environments. Until very recently, a similar chaos was reigning in the housing industry: between April 2010 and June 30, 2011, 1.2 million U.S. homeowners — or one in every 111 households — received a foreclosure filing, according to RealtyTrac.
Reacting against these conditions, why would these young people want to buy a car or a house?
Millennials are re-defining success in a good way. I expect my son to settle down at some point in the future; to quote Thompson and Weissman, maybe these young people are not necessarily a post-driving and a post-owning generation, but more of a less-driving and less-owning generation.
And that’s a good thing.
What do you think?
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