Much has been said about the financial behaviors of millennials – that they value experiential spending over more practical consumption, and they should be buying houses instead of avocado toast – but it’s something that only they can understand. As a witness to the Great Recession, millennials fear to take financial risks and spend money the way they know how.
However, millennials found hope in the Great Recession recovery of the real estate industry. The generation is ready to invest in rental and single-family properties, which is no small commitment, Americashousingalliance.com says. And there are reasons behind the skeptic generation’s trust in the real estate industry.
Great Recession Took Their Jobs
Many millennials graduated during the Great Recession, which brought them difficulties in job hunting. With the burden of student loan on their shoulders, millennials formed a rather negative impression of the stock market, one that prompted them not to get involved in that industry.
On the other hand, the Great Recession saw the burst of the housing bubble, but the industry recovered faster than the stock market. Seeing this upturn gained the trust of millennials, and 85% of the generation agrees that investing in real estate is a good thing.
Debunking the Avocado Toast Myth
A viral commentary on millennials’ financial decisions likened the generation’s spending behaviors to the consumption of avocado toast, and while it rendered laughs, the avocado toast debacle proved to be nothing more than a meme.
Despite buying and investing in homes later than their baby boomer parents, reports show that millennials arethe most active generation in the housing industry today, both as investors and buyers, with nearly 40% being under 36 years old.
This preference for investing in real estate than in the stock market can be attributed to the visual nature of the generation. Millennials are image-oriented – they like to know what’s happening and they want to see results. Stocks, being an intangible asset, are at a disadvantage in this aspect since they are hard to appraise and evaluate.
What the housing industry needs is to welcome the fast-growing number of millennials as their new investors. The skeptic generation trusts real estate as a good investment because of the security and tangible results the industry offers.