I turned 40 last year. I remember it was not too long ago when the subject of Generation X was a gravitational force in the media, in academics and even in public policies. In the last decade – as an avid consumer of pop culture and an athlete who competes physically with younger people – I have learned our new generational obsession is now the Millennials. I understand Millennials are the largest demographic population in the history of America – 92 millions strong compared to Babyboomers’ 77 millions – and I heard they are do-gooders, more globally aware, and friendlier to the environment. All sounds terrific.
But as I dig deeper as a marketer, the news was not all rosy with Millennials. They are supposed to be less materialistic and more fiscally conservative, having witnessed their parents’ financial woes in a down economy and challenges with retirement funding, and under their own pressure of a stagnant job market and mounting student loans. They don’t buy as many cars, preferring car-sharing, public transportation and city over suburban living. Some of them are more open to moving back to their childhood home than to buying their own white-picket-fence home.
In a latest Harvard Poll, nearly half of all Millennials surveyed said the American Dream was dead. Having been a college student myself, I understand every generation of youth has a tendency to reject the previous generation’s ideals. I also get that the world economy is drastically changing. Still, the American Dream, in particular the desire to own a home has always stood the test of time, having survived multiple wars, global financial meltdowns and generational shifts.
Owning a home has always been at the core of the American Dream. In this land of the free, having the right and the means to have a home of your own is the ultimate symbol of personal and financial freedom, not something easily replaced by, say, owning a phone or a Netflix account, no matter how unique the Millennial mindset may be.
In our latest Nielsen Harris Poll research, we learned that over 3 out of 4 Americans still want to own homes. In fact, 9 out of 10 Millennials who currently rent a home would like to become homeowners. They, however, also demand flexibility and mobility. According to the latest U.S. Census, the average Millennial changes jobs every 3 years. That’s less than the textbook 5-year rule Americans have been conditioned to honor when debating renting vs. buying – the theory goes, if you plan to stay in a home for more than 5 years, it’s more financially beneficial to buy. A third of our surveyed millennial renters said if they were to buy a home today, they are not at all or not very confident they would be able to sell the home and recover their down payment in the next 2-7 years. Less than 1 in 4 surveyed Millennial renters said they would be very confident to recover their down payment. It appears that Millennials still very much see homeownership as part of the American Dream, but they are not eager to live that dream just yet if it could vanish into thin air in 2-7 years.
This line of thinking is not another Millennial symptom of pessimism. It is realistic – smart even – when you consider the Nasdaq has been down 6% in the first 4 days of trading in 2016, triggered largely by China, which was down 7% in one single trading day. The Chinese financial market is far beyond the average American Millennial’s control, yet it could trigger a global stocks sell-off that affects the top two real estate markets in the U.S. – New York (the home of Wall Street) and San Francisco (home of stock IPOs) – and may ultimately affect every average American Millennial’s local housing market.
In our same Nielsen Harris Poll survey, nearly 7 in 10 Millennial renters (69%) said they would be more likely to buy a home sooner if they could have the option to protect the value of their down payment in a potential market downturn. It appears to me Millennials are not glass-half-empty or down on the American Dream; they are globally aware and smart about how to protect themselves in an ever changing and mobile world. The American Dream is not dead to Millennials; they are just smart about wanting a new version of the Dream that has longevity.
Brand & Customer Strategist