Clayton Blog

Why Millennials Shouldn’t Push Off Home Buying

Most Americans have some notion that affordable housing isn’t readily available in the U.S. The reality is that over the past two decades, the availability of affordable housing, specifically rental properties for renters, has steadily decreased, and the crisis continues to grow.

 

There is not a single county in the U.S. that has enough affordable housing for people who are classified as extremely low-income renters.1 Extremely low-income refers to families whose income does not exceed either the minimum federal poverty level or 30% of the median family income in the area.2

 

The median family income does vary by county, but to give you an idea of what that means, according to the US Census Bureau, the national median family income in 2014 was around $54,000, making the extremely low-income limit around $16,200.  

 

Millennial Mother in Manufactured Home

 

This affordable housing shortage creates a housing crisis as more and more Americans migrate to urban areas. The demand for urban living continues to rise, which increases the price of the currently limited supply of housing. By default as prices rise, the supply of affordable options falls.

 

In general, urban living usually means renting an apartment or buying a condo, but this is out of reach for many people—especially millennials.

 

Millennial Home Buying Couple Selfie

 

Even though millennials “have a strong preference for city living and a high propensity to rent,” they still frequently choose to rent in areas further away from city centers because of the cost of living.3

 

The Cost of City Renting

 

Around half of the world’s population currently lives in urban areas, and it’s predicted that 2/3 of the global population will live in urban areas by 2050.4 A rapid increase in urban living threatens to result in high resource demand, and dense populations not only put a strain on resources but they can add to greater air pollution, uncollected waste issues and resulting health hazards if urban planners do not prepare to deal with these things.4

 

Something else to consider is the continual increase in rent costs and what it means for the rise in homelessness. The growing demand for urban living continues to drive up costs while current residents get pushed out because they cannot afford to pay. According to the Journal of Urban Affairs, increases by 15 percent with every $100 rise in rent costs.5  

 

According to Urban Land (live link) a rent standard of affordability of 30 % of income was used to determine that  more than half of current renters are “cost burdened,” which means more than 30% of their monthly income goes to rent.5  Urban Land explains that the median price for a new apartment today exceeds $1,300 in monthly rent, which is unaffordable by the 30% standard for about half of households who currently rent.

 

The Opportunity to Buy a Home

 

Manufactured Home Decorated Living Room

The Thrill model by TRUmh

 

Culturally, many of us still want our space, our tree-lined streets and our beautiful communities. But how will we ever get there? For instance, many millennials would rather push off buying a home and cope with rising rent costs, but this means the ability to purchase a home in the future drops.

 

Rent costs continue to rise and the availability of affordable rent options continues to drop, so money that could go toward a home purchase continues to get invested in apartments that millennials can never actually call their own. Plus nearly half of home buyers cite student loans as their largest barrier to buying a home.

 

On top of all the other barriers to buying a new home, there’s a national shortage of housing options, even for home buyers. Not only was there one of the slowest housing stock growths ever during 2011-2013,6 but there’s also a lack of affordable new homes.

 

In a survey by the National Association of Home Builders, 59% of respondents said they could not spend any more than $249,000 on a new home, but only 35% of new homes in 2015 were at or below that price point.6 

 

Millennial Home Buyer on Phone

 

However, there are affordable options for millennials that can help them save money instead of pouring money into rent for an apartment or home that will never be their own. Millennials can indeed achieve their homeownership goals and reach the American Dream of owning a home.

 

Achieving Homeownership with Clayton

 

Clayton offers many different manufactured and modular home options for Americans chasing the American Dream of homeownership. Instead of succumbing to rising rent costs without ever owning your own home, you can find an affordable slice of the world to call your own.

 

 Millennial Couple Painting in New Home

 

It’s not just about homeownership either. It’s about having a home that was built efficiently in an ISO 14001 registered building facility where environmental management systems are in place to help preserve our world’s energy resources. It’s about having energy efficient features in your new home that help save you money and energy every month. It’s about the opportunity to have an expected monthly cost that won’t flux with the demand for the room you rent.

 

Manufactured and modular homes don’t have to be placed in rural areas either. For example, in 2004, the State of Washington passed a state bill requiring that local governments regulate manufactured housing in the same manner as any other housing in terms of land use and zoning although local governments can required specific requirements be met for manufactured homes regarding design and installation.7

 

In other areas of the country like Birmingham, Louisville, Milwaukee and Washington D.C., Manufactured Housing Institute (MHI) worked with local organizations and governments to design and build modular houses consistent in style with the urban neighborhoods. Being a part of a walkable, family friendly community near your friends and job is absolutely feasible with a manufactured or modular home. 

 

Millennial Home Buyers In Front of Manufactured Home

 

As our world rapidly urbanizes and people migrate to urban areas, a Clayton Built™ home remains an affordable way to secure your very own home.

 

Instead of choosing to rent and finding yourself stuck in an urban apartment that will never be your own, you can find a beautiful, affordable home that you’re proud to call your own.

 

View New Homes 

  1. Capps, Kriston. "Every Single County in America Is Facing an Affordable Housing Crisis." CityLab. June 18, 2015. Accessed May 12, 2017. http://www.citylab.com/housing/2015/06/every-single-county-in-america-is-facing-an-affordable-housing-crisis/396284/.
  2. Golding, Edward, and Lourdes Castro Ramirez. HUD Notice: FY 2016 Income Limits. PDF. HUD, March 28, 2016. https://www.huduser.gov/portal/datasets/il/il16/HUD-sec8-FY16.pdf
  3. S. Urbanization Trends: Investment Implications for Commercial Real Estate. PDF. CBRE Global Investors, January 20, 2015. http://www.cbreglobalinvestors.com/research/publications/Documents/Special%20Reports/US%20Urbanization%20Trends_JAN%202015.pdf
  4. Leen, Photograph By Sarah. "Urban Threats." Urbanization Effects. May 2017. Accessed May 12, 2017. http://www.nationalgeographic.com/environment/habitats/urban-threats/.
  5. Byrne, Thomas, Ellen A. Munley, Jamison D. Fargo, Ann E. Montgomery, and Dennis P. Culhane. "New Perspectives On Community-Level Determinants Of Homelessness." Journal of Urban Affairs35, no. 5 (2012): 607-25. doi:10.1111/j.1467-9906.2012.00643.x.
  6. Williams, Stockton. "Understanding the Scope of the Housing Shortage in the United States." Urban Land Magazine. October 26, 2016. Accessed May 12, 2017. http://urbanland.uli.org/development-business/housing-shortage-u-s/.
  7. Dawkins, Casey J., C. Theodore Koebel, Marilyn Cavell, Steve Hullibarger, David B. Hattis, and Howard Weissman. Regulatory Barriers to Manufactured Housing Placement in Urban Communities. PDF. Blacksburg: U.S. Department of Housing and Urban Development, January 2011. https://www.nahb.org/~/media/Sites/NAHB/SupportingFiles/7/reg/RegBarriersManufacturedHousing_20131017030740.ashx?la=en

Topics Financial