By Erin Delmore
When you graduate college, where are you going to live?
“Probably still with my mom,” said 26-year-old Al Faura.
“It’s rent free for me. I know if I moved back in, they’d take me in,” said 20-year-old Samantha Blischak.
“My fiends now, we’re still trying to figure out what we want to do with life,” said 22-year-old Theresa Dill.
It’s a familiar cycle among millennials — go away to college, then move back home. And it’s having an effect on the real estate market in New Jersey.
“It’s taking about three years more for people to kind of save up and be able to purchase a home or be able to get out from under mom and dad and save up enough,” said New Jersey REALTORS President Tg Glazer.
According to the latest census data, around one in five New Jerseyans are between the ages of 18 and 34. That’s close to 2 million people. Around four in 10 of them live in their parents’ house.
“Part of it is not due to desire, but it’s due to their economic circumstances. They may well have big student loans, they may have been negatively impacted by the Great Recession, they’re trying to catch up with the job market,” said James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.
Couple that with New Jersey’s high cost of living. Three of the 20 most expensive housing markets in the country are right here, thanks in large part to our proximity to New York.
“The younger millennials, maybe they’re looking at areas that are a little bit more vertical, you know, some of the cities — Hoboken, Jersey City. Places where there’s a lot of walking. And then as they mature, they grow and form their own relationships and families, they tend to spread out into the suburbs a little bit more looking for single family, detached homes,” Glazer said.
When asked if he has any plans to buy a home, 24-year-old Robert Reilly said, “Maybe eventually. We do have kids so eventually it’s going to have to happen, I would think, but not soon.”
We spoke to a bunch of millennials confounded by what it takes to get to home ownership. While that group carries less credit card debt on average than older generations, they’re more likely to be paying back student loans at the expense of their savings accounts and retirement plans.
“We have to keep up with the bills. I’m 35 and it’s hard to maintain employment when you get laid off and you have to find another job, and it’s about saving,” said James Conover.
Hughes says renting does have some advantages: like mobility to take a new job. And he says home ownership lost some luster among millennials after the Great Recession.
“Their parents saw home ownership as the great piggy bank. They’d own a home for 20, 30, 40 years, trade up in the housing market. The equity they’d build up would pay for their kids’ education, would pay for their retirement. But in many cases, the Great Recession changed that dramatically,” he said.
One word of advice from our experts, couched in terms every young person understands: it isn’t time to buy a house yet if your mortgage payment leaves you house poor, or as Glazer says, “You’re eating ramen noodles for the rest of your life.”