News flash! People under age 30 are ruining the world, so says yet another generation. This time, they turn to the mortgage crisis as proof. The Wall Street Journal notes that youngsters under 30 are less hung up about walking away from an underwater mortgage. That's because "defaults may be more common with the younger set (under 30) that didn't grow up with the pay-your-mortgage-before-everything-else mentality." Or maybe, as John Burns, president of John Burns Real Estate Consulting continues in the article, "This generation is more likely to view owning simply as an investment."
Hear, hear, good old man.
Exhibit A: the paper tells of an unnamed 26-year old from Las Vegas who put no money down on a $250,000, 4-bedroom, 1,400 square foot house in 2007. This January he spotted a nearby home with the same floorplan plus a pool and guesthouse - for $100,000, and so moved out and gave his first home "back to the bank."
Perhaps enviously, the WSJ mentions the freedom of being unattached and notes that at this age relocating into a rental "isn't a big deal." Friends: this is what's known as a "generation gap" here...
For all you 30-plusers, here's are three big squeezes on young adults that demand a different view of a mortgage.
Paid less than ever before
Young people of all educational levels are earning less today than they would have 20 or even 30 years ago.
Rising education costs
In addition to being paid less, people under 30 pay a higher percentage of take-home pay for their college educations than previous generations. (In fact, college is predicted to be unaffordable for average Americans in decades to come.)
Fluidity of jobs
Young adults are losing the most jobs. A job is a great thing to have to keep a mortgage current.
Mortgages once assumed you stayed in the same location your whole life, earned more with a degree (or at least with time on the job). Now, there are new rules of work. As work assumptions change, so should assumptions about mortgages.
Young adults aren't skating out on responsibilities. They're navigating new rules with little to guide them. If the rules have changed, why are we still blaming the youth of today?
