Last week, the Atlantic Monthly performed its version of trolling for pageviews with "The Cheapest Generation: Why Millennials aren’t buying cars or houses, and what that means for the economy."
The structure of the story is fairly typical: Ask the question ("Why aren't Millennials spending?"); reject the most obvious answer ("Because they have been severely hit by under- and unemployment and have crazy student debt loads and are mirroring the rest of the population in terms of curbing consumerism."); postulate that there is some giant generational shift that rejects the behavior of its forebears:
It’s highly possible that a perfect storm of economic and demographic factors—from high gas prices, to re-urbanization, to stagnating wages, to new technologies enabling a different kind of consumption—has fundamentally changed the game for Millennials. The largest generation in American history might never spend as lavishly as its parents did—nor on the same things.
Or it's highly possible that these folks observed the same thing that Zillow did. Per the Atlantic Wire last week: "Millennial Homeowners Are Especially Screwed." Why so screwed:
48 percent of mortgage borrowers younger than 40 are currently underwater. It's 39 percent among those who are 20-24 years old; 48 percent for the 25-29 cohort; and 51 percent for the 30-34 demographic
Being underwater means the financial penalty goes well beyond "I am paying more for this house than the market says it is worth."
It means that you have no opportunity to get out of your current mortgage and into one with a better interest rate, so you end up paying even more on the house that's worth less. It means you can't sell unless you're prepared to empty out your savings account and bring money to the table for closing. (Which is what we had to do. And it suuuuuuuuuuucks.) It means the cost of getting out of the bind you're in is often way out of reach -- no better loans, no chance to relocate for a better job -- and so you're stuck, literally and financially.
If you're just out of school, you're employed and you're building a career, why would you risk that?
Twentysomethings aren't buying houses because they're into New Urbanism. They're holding back because they've lived through the last decade and paid attention. And good for them.