Millennials get a bad rep. While the internet is busy circulating speculative articles about how the millennial generation is killing off napkins and fabric softener, members of that generation are just trying to scrounge enough money to keep up with increasing housing costs.
Tiny homes offer an exciting living option somewhere between renting and buying –– and ever-practical young professionals are biting. Here are 8 reasons millennials are choosing tiny homes that have nothing to do with their affinity for avocado toast.
They have significant student loan debt
Millennials have more student debt than any generation before them. Recent statistics say that the national student loan debt is around 1.5 trillion dollars. This makes it a challenge for millennial professionals to accrue savings. Even for those who have built a solid nest egg, huge monthly loan payments mean buying a house is just a far-off fantasy. A tiny home can be a great compromise for those who still have a long way to go on paying off their federal or state student loans.
They have bad credit
Due to crippling debt or poor early financial habits, many millennials find themselves grimacing at their credit score. Bad credit creates a variety of potential financial roadblocks, making it challenging to rent an apartment, get a good credit card, or buy a car. For millennials with bad credit looking to invest in property, the process of securing a loan is especially dismal. The lower price point of tiny homes might make it possible for some millennials to buy without the bank’s involvement.
They can’t afford to buy
The current cost of living is astronomical, especially in large metropolitan cities. Between rent, utility bills, car payments, and student loans, it’s no wonder why modern young people can’t save enough money to cough up a down payment. Tiny homes offer an excellent, cost-saving alternative to a lifetime of monthly rental payments.
They’re scarred from seeing their own parents struggle after the Recession
For many millennials, the Great Recession served as a real-life cautionary tale on the perils of putting all your eggs in one financial basket. Many saw their parents struggle through a foreclosure, making the idea of purchasing a home sound less than harmonious. Buying a tiny home offers a much less terrifying investment for those scared off by their own parents experiences.
They don’t want to be tied financially to a larger investment
Even for millennials who can afford to buy, the idea of investing in a piece of property can be daunting. A down payment on a house will likely cost upwards of six figures –– putting all of one’s equity in one place. Should the housing market take a hit, the buyer might be unable to get their money back. A tiny home is a lower-risk investment that won’t deplete all one’s capital.
They want to reduce their carbon footprint
The amount of resources required to build a tiny home are significantly less than a traditional house, reducing environmental impact. Millennials looking to address and reduce their carbon footprint find that purchasing a tiny house is the perfect way to do it.
They want the freedom to be mobile
Tiny homes might have their quirks, but ease of mobility is on the pros list. The ability to get up and go at the drop of a hat –– a new job opportunity, or an acceptance to graduate school, for instance –– makes investing in a tiny home an even better option than getting stuck with a hefty fine for breaking your lease.
Minimalism is cool
Popularized by recent documentaries and literature, minimalism is at the forefront of design trends. Perhaps the most exciting aspects of this trend are it’s potential financial payoffs, since fewer possessions equals less cost. Tiny homes offer the perfect chance for millennials to practice their recently acquired tidying-up skills, purging their material goods in an effort to live their best lives.
If you’re wondering what kind of home your credit can get you, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated every 14 days.