Tag Archives: millennials

A need to better measure financial support and wealth passed to Millennials

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A look at how race affects the financial support given by parents to Millennials includes this bit about measurement:

Shapiro said the numbers of Millennials receiving support from family are “absolutely underestimated” because many survey questions are not as methodical and specific as those a sociologist might ask. “As much as 90 percent of what you’ll hear isn’t picked up in the survey,” he said.

Shapiro’s more careful research found this:

Shapiro’s work pays special attention to the role of intergenerational family support in wealth building. He coined the term “transformative assets” to refer to any money acquired through family that facilitates social mobility beyond what one’s current income level would allow for. And it’s not that parents and other family members are exceptionally altruistic, either. “It’s how we all operate,” Shapiro said. “Resources tend to flow to people who are more needy.”

Racial disparity in transformative assets became especially striking to Shapiro during interviews with middle-class black Americans. “They almost always talk about financial help they give family members. People come to them,” Shapiro said. But when he asked white interviewees if they were lending financial support to family members, he said, “I almost always get laughter. They’re still getting subsidized.”…

To many Millennials, the small influxes of cash from parents are a lifeline, a financial relief they’re hard pressed to find elsewhere. To researchers, however, it’s both a symptom and an exacerbating factor of wealth inequality. In a 2004 CommonWealth magazine interview, Shapiro explained that gifts like this are “often not a lot of money, but it’s really important money. It’s a kind of money that allows families to obtain something for themselves and for their children that they couldn’t do on their own.”

Two quick thoughts:

  1. Americans tend not to like to talk about passing down wealth but decades of sociological research (as well as research from others) shows that it happens frequently and is quite advantageous for those who have wealth passed to them. I recommend looking at Shapiro and Oliver’s book Black Wealth/White Wealth.
  2. Polls like those cited here from USA Today could lead to lots of problems just because the measurement is not great. Why not ask better poll questions in the first place? I understand there are likely limits to how many questions can be asked (it is costly to ask more and longer questions) but I’d rather have sociologists and other social scientists handling this rather than the media.

“Young people today don’t see a car as freedom; they see it as a trap.”

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A new book argues driving does not appeal much to millennials and this will have important consequences:

Sam Schwartz, New York City’s Koch-era traffic commissioner, has a simple thesis in his new book, “Street Smart”: “Millennials are the first generation whose parents were more likely to
complain about their cars than get excited about them.

As kids, “millennials were driven through more traffic jams, more often, longer, and farther, than any generation in history.”…

What’s freedom to kids today? A walk, a bike ride or a short car ride — and, more often, a smartphone.

It’s all wonderful, then, that people are changing their behavior — except for the fact that the country needs for people to keep driving ever more miles so that it can fund its highway and transit infrastructure. Remember: Just as not everyone needed to default on his mortgage to cause a housing bust, not everyone needs to take the bus instead of a car to cause a roads bust…

One thing is clear, though: Even if presidential candidates are too afraid to talk about this stuff, they sure shouldn’t run against cities, when the voters are running toward them.

Less driving may just be a symptom of larger changes: living in denser areas (cities and suburbs with entertainment and cultural options within walking or mass transit distance), less public life outside the housing unit even with increased interaction with people through smartphones and the Internet, changing priorities in how to spend money for individuals (why would I pay for a car when spending that money elsewhere – say on experiences or the latest technology – gives me more desirable options?) and the government (it may be very difficult to maintain all those roads), and a declining interest among all Americans to simply drive (with a whole host of economic, political, and social influences here). At the same time, large social changes like these require time to work their way through a large society.

Renting or buying housing difficult for young adults

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The housing market is such that either renting or buying a housing unit is difficult for those under 35:

If you’re an American man or woman under the age of 35, there’s a historically large chance that you’re living with your parents. And if not, you’re very likely to be renting, and paying too much for the privilege. Only 34.8 percent of young adult households actually own their home, the smallest fraction since at least 1994, and among those who are forking over cash to a landlord, nearly half are considered “rent burdened”—meaning housing eats up around a third or more of their income.

And what about those who’d at least like to buy? Well, there’s a pretty good probability they’re getting boxed out of the market. On top of the challenges posed by tough post-crash mortgage standards, Bloomberg reports Thursday that prices for typical starter homes have been on a tear due to a lack of supply, and are now actually above their past bubbly heights.

As others have pointed out, high housing costs for those trying to start their adult lives or in their careers can have some large consequences. How to pay off college debt? How to easily move to the next new job opportunity? How to build wealth? How to start family life? This has been a problem for a few years now and doesn’t look like it will get much better soon.

Three reasons Millennials are driving less and going fewer places overall

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A new study attributes less driving among Millennials to three factors:

The truth might be a little of this, a little of that, and even some of the other. That’s the takeaway from a new analysis of Millennial driving habits from transport scholar Noreen McDonald of the University of North Carolina. Writing in the Journal of the American Planning Association, McDonald attributes 10 to 25 percent of the driving decline to changing demographics, 35 to 50 percent to attitudes, and another 40 percent to the general downward shift in U.S. driving habits…

What makes McDonald’s work especially useful and compelling is that she compared the travel patterns of Millennials (born between 1979 and 1990, by her definition) with those of Generation X (born 1967-1978) at the same age. So she looked at driving data (both trips and miles) from tens of thousands of individuals in 1995, 2001, and 2009 alike.

But, it isn’t just that Millennials are driving less – they are going fewer places overall.

This analysis provides evidence of a long-term decrease in automobility that started in the late 1990s with younger members of Gen X and has continued with the Millennial generation. The decrease in driving has not been accompanied by an increase in other modes of travel or a decline in average trip length, meaning that younger Americans are increasingly going fewer places.

Those smartphones are media gadgets are pretty compelling and make accessing the rest of the world easier. Perhaps there is less need to wander and display independence by leaving the house. Maybe all those fears about crime out there have crept in for a whole generation.

If local mobility is reduced, does this mean this newer generation of Americans will have less geographic mobility within the United States (fewer moves or significant moves throughout their lives)?

Study suggests Millennials see diversity as “different experiences”

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A recent study looked at how Millennials approach diversity:

Millennials seem to be tilting toward that latter, more easily attainable vision. A recent study from Deloitte and the Billie Jean King Leadership Initiative, found that when it comes to defining diversity, rather than focusing on demographic features, such as race, or gender, Millennials—those born roughly between 1980 and 2000—are more concerned with hiring those who may have different cognitive viewpoints due to growing up in a different part of the country, or attending a different type of school. Differences in race or gender can play a role in those differing viewpoints, but they may not be singled out as important diversifying characteristics. “Diversity means to me your background based on your previous work experience, where you were born and raised, and any unique factors that contribute to your personality and behavior,” said one Millennial who was surveyed.

This is a departure from what older generations understand diversity to mean. “Millennials frame diversity as a means to a business outcome, which is in stark contrast to older generations that view diversity through the lens of morality (the right thing to do), compliance, and equality,” the study of more than 3,700 individuals spanning different generations, races, and genders found. According to Christie Smith, one of the study’s authors, this generation is already comfortable with the idea of diversity in a traditional sense and they’re looking to expand the definition, which could be a good thing…

Millennials are the most diverse group of young adults the nation has seen. And for some, that may mean that the idea of diversity, at least when it comes to race and ethnicity, feels like a given. Though inequalities that have existed for generations persist, some Millennials might think of them as less of a problem. But research, and current events, would show that may not be the case. “We live in a more diverse world in a superficial sense,” Wingfield says. “When we think about where we live, where we go to school, where we work, that type of diversity hasn’t really happened yet.” That creates a gap between perception and reality she says. “Millennials have this reputation for having adopted this more progressive, forward-thinking viewpoint—at the same time, a lot of the institutions that structure their lives really haven’t changed so much.”

This could turn out to be diversity based on individualism and personal identity as opposed to any large-scale understanding of how different social markers, such as race, class, or gender, contribute to different life chances. And the broader data in the United States continues to suggest that those broader social forces still have a large impact on people’s lives.

Did we already pass “peak urban millennial”?

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Joel Kotkin discusses the demographic data that shows the bulk of millenials are near their 30s – and possible lives in the suburbs.

Some of this simply reflects the aging of millennials. As Jed Kolko at the real estate website Trulia has pointed out, the proclivity for urban living peaks in the mid-to-late 20s and drops notably later. Over 25 percent of people in their midtwenties, he found, live in urban neighborhoods; but by the time they move into their midthirties, it drops to no more than18 percent.

The impact of the aging process – the maturation, however delayed, upon millennials – will soon become acutely obvious to all but the most emotional retro-urbanist. In 2018, according to Census Bureau estimates, the number of millennials entering their 30s will be larger than those in their 20s, and the trend will only get stronger, with the numbers tilting ever more in favor of the thirtysomethings. Kolko suggests that we may already have passed “peak urban millennial.”

And then Kotkin goes on to try to bust other stereotypes about millennials. Both he and the other side – such as those who tend to argue that smart growth will inevitable win out behind the tastes of younger Americans – can cite some data and make some predictions. Perhaps Kotkin has the easier selection: he suggests millennials will follow the geographic inertia of their ancestors (even if they do have some other social differences) while his opponents are looking for a big break from the past.

But, it is interesting to note that we may only be a few years away from settling this debate if the bulk of millennials are then in their thirties. Unless emerging adulthood keeps getting extended for this group, they will be expected to have made their “adult” decisions soon. Will they choose cities and denser suburbs or will they continue to prefer more space relatively far from dense population concentrations?

Picking apart the top cities for singles rankings

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Rankings of the top cities for singles may not be that valid:

“It doesn’t make much difference” where millennials live in terms of their marriage prospects, Andrew Cherlin, director of Johns Hopkins’ sociology department, wrote in an email. He said most major cities now have about the same rate of millennial inhabitants…

And indeed, most of the top cities for this category were near military installations. No. 2 on Wang’s list was San Luis Obispo, which is less than an hour from Vandenberg Air Force base, the third-largest air force base in the country. No. 4, in Hanford, Calif., has a large Navy presence…

So what does predict whether you’ll get married? The reigning champ of marriage indicators is Mormonism, even for millennials. Utah towns occupy the top three slots among 18-34 year-old marriage rates (nearly 2/3rds of millennials are already spoken for in western Utah County, Utah). And the U.S.’s top-three Mormon states, Utah Wyoming and Idaho, occupy the top three slots for states.

Surprise, surprise; rankings found on the Internet may not be that great. Sometimes this has to do with methodology: what is included in the rankings and how are the different dimensions rated? This is discussed here: do you want to look at millennial composition (where Washington D.C. leads the pack) or millennial marriage rate (Washington D.C. doesn’t do as well)? One lesson might be to have more specific rankings – do you really mean it is best for singles if your data is based on the marriage rate?

Additionally, two other issues arise. One, what if the cities aren’t that different from each other? Rankings are intended to differentiate between options but mathematical differences do not necessarily equal substantive significances. Second, why are the rankings in this order? Here, what related factors – such as the proximity of military installations – might be relevant? This may be hard to pick up at times because not all the cities may be affected by the same phenomena. Thus, the researcher has to do some extra digging to try to explain the rankings rather than just simplistically report them.

Even with the argument from Richard Florida about the creative class seeking out cities with enticing culture and entertainment, how many people move where they do because of such rankings?

New survey suggests 66% of millennials (who want homes) still prefer suburbs

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Perhaps that generational shift back to the city will take some time: a new survey shows a majority of millennials would prefer to live in suburbs.

Some demographers and economists argue that the preference of millennials, also called Generation Y, for city living will remain long lasting. And surveys of these young urban residents have tended to show that they don’t mind small living quarters as long as they have access to mass transit and are close to entertainment, dining and their workplaces.

But a survey released Wednesday by the National Association of Home Builders, a trade group, suggested otherwise. The survey, based on responses from 1,506 people born since 1977, found that most want to live in single-family homes outside of the urban center, even if they now reside in the city…

The survey, which was released at the association’s convention in Las Vegas, found that 66% want to live in the suburbs, 24% want to live in rural areas and 10% want to live in a city center. One of the main reasons people want to relocate from the city center, she said, is that they “want to live in more space than they have now.” The survey showed 81% want three or more bedrooms in their home…

The survey results, though, could be skewed because they included only millennials who first answered that they bought a home within the past three years or intended to do so in the next three years. That excluded young people who intend to rent for many more years, which is a large and growing group, in part because of hefty student debt and the tight mortgage-lending standards of recent years.

Interesting twist there at the end – of those who have or intend to buy homes, the suburbs are still the place (and only 10% wanted to live in a city center) to go.

I do wonder at the three categories presented: city center, suburbs, and rural areas. While the last one is pretty easy to define, what is the boundary between the city center and suburbs? If I’m thinking about Chicago, does living in the city center include every part of the city of Chicago (which has a lot of neighborhoods of single-family homes) or does it refer to living in the denser Loop and right nearby?

Fortysomethings have more influence on sluggish housing than millennials

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While millennials currently have lower homeownership rates than in the early 2000s, Derek Thompson suggests fortysomethings are the bigger issue for the sluggish housing market:

The economy has a Gen-X problem. It’s a small cohort with a much-smaller-than-usual homeownership rate. And people wonder why the housing market is sluggish.

Update: Read Trulia’s Jed Kolko on why the middle-aged are the true lost generation of homeowners. In short: They bore the brunt of the foreclosure crisis:

In 2005, the year when the true homeownership rate peaked for most age groups, 25-to-29 year-olds were the age group for which homeownership was highest relative to the demographic baseline, followed by 30-to-34 year-olds. These were first-time home-buyers getting easy credit for overpriced homes; then, they bore the brunt of the foreclosure crisis, losing their homes and wrecking their credit history…

The millennial generation was still in their early 20s or younger in the mid-2000s–too young to have bought during the bubble and then to have suffered a foreclosure: Only the oldest among the 18-to-34 year-old group in 2013 would have been of home-buying age during the bubble.

Interesting data. Generation X had bought into the American Dream and the importance it places on owning a home but they were badly burned by the housing collapse. They were in the wrong place at the wrong time: eager to buy homes, able enough to overpay based on decent jobs, and particularly indebted when their housing values tanked.

There is another issue at play here: while millennials may not have been very involved in the economic crisis, they are the generation that could continue the homeownership ideal among Americans. If they choose otherwise – and perhaps they are watching those older than them – then there may not be much of an upward tick compared to Generation X.

Side note: a funny quote from earlier in the article.

It is a truth universally acknowledged that a journalist in possession of a negative statistic must find a way to blame Millennials for it.

Generational blame is alive and well even in our advanced rational and enlightened age. Talking about generations is an easy shorthand for analyzing social trends. Whether such talk holds water compared to other age breakdowns or other data may be another matter…

Different areas to address to help millennials purchase homes

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Survey data suggests Millennials want to buy homes but have a hard time finding the resources. Here is a quick look at different hurdles:

So why aren’t all young would-be homebuyers just taking advantage of the low down-payment options offered by these plans to get into the market before prices rise further? Not everyone has access to the programs that can shrink a down payment, and even for those who do, such help may not be enough. “Typically the down payment is the biggest hurdle for a homebuyer” says Ken Fears, director of regional economics and housing finance at the National Association of Realtors. “Programs that have a lower down payment are going to provide a bigger boost for the consumer.” Some programs, like Fannie Mae’s Community Home Buyer’s, require a 5 percent down payment, a sum that still makes saving a difficult proposition for many young people, particularly those in areas with quickly climbing home prices, such as San Francisco and San Diego. States like North Carolina and New Hampshire, have particularly well-regarded programs that allow for down payments of about 3 percent. Some private lenders also offer assistance to new homebuyers, but fees and additional factors, such as debt-to-income ratios, can prove more restrictive.

But programs aimed at reducing down payments for first-time homebuyers can feel like a double-edged sword. In competitive areas, where homes are scarce and multiple bids are common, an affordably low down payment can be limiting. “You’re not very competitive. If you’re going into a house with multiple offers and they see 3 percent down versus 10 or 20 percent down, they’re not going to go with your offer,” says Anne Simpson, a 27-year-old teacher and prospective homebuyer in Washington D.C…

Tight inventory is also a major hurdle for first time buyers. “In a majority of large metro areas nationwide, the inventory of lower-priced homes for sale is much lower than inventory of mid and high-priced homes for sale,” says Humphries. That can make for a stressful and competitive shopping experience where prospective buyers feel like there’s a race to save up for their down payment before rates go up and favorite neighborhoods sell out…

And for more Millennials, issues of poor or nonexistent credit and lack of consistent wages push dreams of homeownership just out of reach. High student-debt payments combined with escalating rent leaves little extra income for savings and even those with steady jobs have learned that significant raises are hard to come by. According to Humphries, there’s no quick fix. Instead, patience, education, and advocacy programs for newer buyers will be the key to boosting first time home purchases among younger buyers, progress that could take another three to five years.

As the article notes, even with higher renting costs, it is not easy to buy a home. While this article provides just a brief overview, it seems like there is an opportunity for private lenders to really help or develop this market. Imagine college graduates with some student loan debt that want to own, have decent jobs, and yet don’t have the credit or big down payment yet. Isn’t there a way to craft something based on their education (tied to lower unemployment rates, higher earnings down the road)?