Although you often hear about America’s struggling millennials, mired in debt and fighting to stay afloat financially, some millennials are living the good life — financially secure as homeowners, with new cars in their driveway and money socked away in a retirement account.
So, what’s the secret to their success? According to The Atlantic, many financially thriving millennials have one thing in common: wealthy parents.
These millennials have help paying their [college] tuition, meaning they graduate in much better financial shape than their peers who have to self-finance college through a mix of jobs, scholarships and loans. And then, for the very luckiest, they’ll also get some help with a down payment, making homeownership possible, while it remains mostly unattainable for the vast majority of young adults.
About 43 percent of millennials who had financial help from their parents paying for college are able to buy a home. That’s compared to a homeownership rate for all young adults of just 36 percent in 2014.
Some millennials have it even better. Zillow refers to millennials whose parents help pay for their college education as well as a down payment on a home purchase as the “doubly lucky 3 percent.”
“In total, 9 percent of all young adults who received parental support for their education also received family support in funding their down payment,” Zillow explains. “Looking at the data in another way, 3 percent of all young adults received parental support for both education and buying a home.”
That 3 percent represents more than half of millennial homeowners, Zillow said.
It’s understandably more difficult to afford a home when you’re facing sky-high rents, have no money in savings, are burdened with an overwhelming amount of student loan debt and are working for wages that haven’t kept up with the cost of living. That’s the grim reality for many millennials.
In fact, many young adults are spending $280 per month in student loan payments while trying to get by on a salary that doesn’t come close to $50,000 per year, The Atlantic said.
Young adults with wealthy parents often follow in their footsteps to affluence, Svenja Gudell, the senior director of economic research at Zillow, told The Atlantic.
“Haves are turning their riches or their wealth into bigger wealth because they are investing in the housing market by simply living in a house,” says Gudell. This advantage is one that these millennials will carry forward as they earn more than their degree-less peers and save more than those who were forced to throw away tens of thousands of dollars on rent due to their inability to buy. In the future, they’ll have wealth to pass down to their own kids, continuing the cycle.
What do you think of the millennial generation’s financial struggles and sometimes endless road to homeownership? Share your comments below or on our Facebook page.