Millenials who are renting instead of buying homes have a large detrimental effect on the real estate industry. The housing market led to the recession in 2007. Now, there are increased numbers of people using short term rentals rather than home ownership. It is this renting, short term rentals that have an impact on the national economy as well. The housing market is the industry that is still depressed in many areas.
College graduates are finding a better job market compared to a few years ago. But, they are not ready to help the housing market by purchasing a home. For many of them, they have student loans to pay before being able to afford a new debt. It is no longer unusual for these grads to stay in the homes of their parents, while they pay their way out of debt.
Those who did apply for a mortgage in 2009, 2010 and 2011 were for the most part not given a loan. Only nine percent of those who applied were approved for their first mortgage. Their ages ranged from 29 to 34. Research indicates that 80 percent of those living with parents were not unhappy about it and thus, in no hurry to purchase a house.
Any time that a new household is set up, it promotes sales of household goods and various other goods that are helpful to the economy. The homeowners buy materials and make renovations beyond what they would do on a rental unit. If they were in a home they owned, these purchases would help the economy in general. Another factor is they don’t pay property taxes, depleting the tax base in local areas.
Renting short term rentals doesn’t generate sales or property tax payments. Another change in society is that people get married at only half the rate they used to. A young couple might use a short term rental to determine if they are compatible before taking the step of getting married.
Although they are failing to build up the general economy, they are guilty of doing nothing wrong. If it is their choice to live with parents, that is certainly their right in the U.S.