New Options To Be Added This Year To the Millennial Data
I've dislike the rent vs. own portion of my study because many of the Echo Boomers I speak with do not own or rent. After six months of collecting and compiling data from a variety of sources when speaking with Echo Boomers, I began to realize that I left out an important category: living with relatives or friends.
While I am unable predict the exact results, I can state that around 2-4 Echo Boomers live with their parents for every one Echo Boomer who owns a home. However, with this category added to my study, I'll begin to gain an understanding of what percent of Echo Boomers as neither renters nor home-owners.
According to a recent study [updated link], many Echo Boomers move back with their parents. While this act may have been stigmatized in former generations, among Echo Boomers, moving in with relatives or friends makes economic sense. Based on the Echo Boomers who live with their relatives, I see three major reasons why this option makes good financial sense.
1. Service salaries don't cut it. Many Echo Boomers fail to bring in median income (around $50,000) and lack the financial power of others. If their income is low, they can adjust their living expectations to increase other options. Most Echo Boomers, who live with their parents, do not pay rent. This helps them save either for a home, or helps them hold out until a decent job and salary come along.
As an added note to this point, many Echo Boomers, who rent, share their apartment or homes with multiple roommates (beyond the trite 2 roommate per household). This indicates that many Echo Boomers are trying to save any little income they can.
2. The recession is encumbering them from finding good jobs. Many Echo Boomers have moved back home because the economy isn't offering them jobs in areas they would like to live. Most Echo Boomers living with their parents admit they would like to live on their own, but the recession has kept jobs from opening up in areas they would like to live. A lack of jobs not only encumbers their income, but restricts where they can live.
3. Food and gas prices are pinching their wallet. Echo Boomers will lack the homeownership power of former generations as long as gas and food prices continue to remain high. If you're losing more money every year from rising prices, you must save in other areas. Many Echo Boomers are choosing to save their money based on where they live, and living with relatives seems to be their favorite option.
Cultural Differences
One important point worth highlighting here: culture matters. Home-ownership has been hyped by American thought leaders. But the United States has a significant (and growing) number of people who are here that were not born in the United States. They do not value home-ownership and they also view a lot of the bureaucracy as both contradictory and odd.
"It makes no sense to own a home that only makes the bank rich," Louisa said, an Echo Boomer allegedly born in Mexico who came to the United States with her family less than a decade ago. "I'm near a million in wealth, but I still won't buy a home. My sisters and I live with our parents. We love it and we don't see a need to own a home." She highlights a big gap in culture: their culture doesn't value home-ownership, but community - specifically family community. [Note that I don't include Louisa or her family in my study, as I cannot validate some of what she claims, so at most I write "allegedly" as it could be a stretch of the truth on some of what she says].
"It's not just home-ownership either," she explained. "My parents take care of my children. I'm not going to pay for childcare. I feel the exact same with other big expenses like car repairs, law help, and accounting. I have family in all those industries."
While Louisa states that her parents own a large house on a decent size piece of land, I'll note people who live like her don't actually need higher incomes. They're also far less dependent on the system. When people complain about rising costs or prices, they're really complaining that their income isn't rising as well. This isn't the case for Louisa. For an example, if her statement about getting free car service is true (I cannot confirm), this means that a $1,000 after tax expense for most people is $0 for her. The same also applies to her rent. While most young people her age pay $800-$1100 in after tax rent for the type of living quarters she claims, she's paying $0.
You can imagine what happens over a 40 year period of time with people who live like this versus people who have to pay for all the services they need. Culture matters and people who believe that families should work and coordinate together will be ahead of people who don't have families or fight with their families about everything.
The Other New Category
Another group that I've added, though the data for this group will come from specific sources, is homeless. Some Echo Boomers can't afford to own, rent, and don't have families or friends to help. What happens to them? Homelessness.
One repetitive point I say about Echo Boomers that few have listened to is that they will not outlive their parents when comparing life expectancies. People do not understand how significant this is and most people think I'm wrong here. However, over time, I will be validated on this point. Echo Boomers will fall short of their parents life expectancies. Homelessness will be a part of why Echo Boomers don't live as long as their parents.
