Contrary to popular belief that Millennials are a group of wild and crazy adult-kids liable to wander wherever the next wind blows, new Census Bureau data shows that members of this generation are significantly less likely to move. 20 percent of Millennials reported relocating to a different address during the previous year, compared to 26 percent of both the Silent Generation and Generation X when they were the same age. So why are Millennials moving less than previous generations?
Spouses, Houses, and Kids
By traditional metrics, Millennials should be more mobile than their predecessors. The presence of a spouse, a house with a mortgage, and/or children tends to dampen the rate of relocation.
Only 42 percent of Millennials have tied the knot, compared to 82 percent of the Silent Generation at the same age. It makes sense that relocating a couple is twice as complicated as a single person moving – two people that need to find gainful employment and all that. So Millennials are half as likely to be married but they’re still not moving. Why?
The second missing factor that often anchors a person in one spot is owning a house. As the largest asset a person is likely to own, a move means you have to sell or rent it. Most times it’s easier to just stay where you’re at. Whereas 56 percent of Baby Boomers lived in a house they (and not their parents) owned at the same age, the number of Millennials who can make that claim stands at 37 percent. So Millennials own houses at a much lower rate and they’re still not moving. Why?
The final factor that often dooms a person to put roots down and keep them there is the presence of children in the home. Fewer than half of Generation X and Baby Boomers could make the claim that they had no children to tie them down, where 56 percent of Millennials are childless. With parents loathing to pull a kid out of a comfortable school and home situation, it’s easy to see why many decide to stay put for the sake of a child (children). So with fewer Millennials strapped down with offspring obligations, they’re still not moving. Why?
The Labor Market Isn’t What it Used to Be
It’s no secret that Millennials got sucker punched by the Great Recession that hit the country around 2007, of which we’re still trying to recover from. What might not be as well-known is the extent of the damage done.
According to Federal Reserve data, Millennials earn 20 percent less than Baby Boomers at a similar stage in life. In real terms, that’s like taking a pay cut from $15 an hour to $12 an hour – and this is while inflation continues to increase. Less money and higher prices. Sounds like an unbalanced equation.
Where previous generations often relocated for a better job, it’s tough to find a good job no matter how far away you move these days. The job recovery (if you can call it that), has been less than impressive and certainly does not provide the motivation to uproot oneself.
The American Dream has Changed
While it’s difficult to say exactly what constitutes the American Dream these days, one thing is certain – for Millennials it doesn’t likely involve owning a house, which is one of the key incentives for moving. There are two considerations here. The first is that today’s young adults simply care less about owning a home, along with the associated mortgage and maintenance costs, than those who came before them.
But even if Millennials were interested in buying a home, it’s difficult for them to find a lender willing to finance such a large purchase. Furthermore, most Millennials graduate from college with a level of debt that’s already equal to having a home mortgage. In realistic terms, trying to buy an actual house is like taking on an additional monthly mortgage payment. In cash flow terms, this is simply undoable for the average worker bee.
Where Educated Millennials are Moving
The millennials who do decide to move – where are they going? Forbes research reveals an interesting twist on the historical flight to the suburbs.
According to the numbers, certain cities are growing faster than their surrounding suburbs when it comes to this generation. In particular, Chicago, Los Angeles, the Boston-Washington corridor and the Pacific Northwest have proven attractive. The exact reasons are less clear. Maybe it’s the simplicity of sharing the cost of an apartment with roommates and relying on public transportation rather than owning a car. One also can’t ignore that many cities have made a concerted effort to attract this young, tech-savvy generation with programs that encourage entrepreneurship and individuality.
The Bottom Line
While there are many things that can’t be said with certainty, there are a few that can. Changes in society force the latest “new” generation to modify their behaviors in order to exist successfully in the new reality. What we can say is that there is a change afoot, and it’s been going on for a while now. Where do we go from here? Pay attention to the Millennials. They’ll show the way.