Apartment List recently published a study looking at the number of millenials who ask their parents for help with buying a home. With data from over 13,000 respondents, it was determined that almost 8% of non-student millenials get rent money from their parents and 17% of millenials expect their parents to help them with a downpayment on a home.
The Millennial generation is often accused of being lazy, entitled and dependent on their parents. While this study definitely confirms the latter, millenials are facing a housing market where rent and home prices have increased faster than incomes. Take for example, Seattle, where home prices have increased by over 70% in just 12 years. However, it’s not just the home prices delaying Millenials from purchasing homes and asking their parents for help. It’s also their crippling student loan debt. Since 1980, incomes have only risen by 25%, while the cost of college tuition has increased by a staggering 160%.
It’s hard to determine when— or if —the millennial generation will begin purchasing homes on a wide scale. However, as an employer, the millennial housing market is something to care about—especially if you operate in a city with high real estate prices. (We’re looking at you San Francisco and New York.) While some of the best jobs cluster in these cities, it also means home ownership is a lofty dream for most of these employees.
Why Employers Should Care About the Millennial Housing Market
The unemployment rate is at an all time low, and it’s important that companies not only make a concerted effort to attract talent, but to retain it. Since millenials are currently the largest generation in the US labor force, making up more than 30% of the workforce, it’s important that companies pay attention to what their millennial employees are facing. Afterall, if securing and buying affordable housing is a stressor outside of work, it will likely affect their productivity while on the job.
This rings more true for companies that operate in a city with a cost of living above the national average or a limited housing market. In these areas, the ability for millenials to buy a home is near impossible and rent prices take up much of their paycheck, making it difficult to save for a down payment. Often times, young workers will sacrifice location and live further away from work to make things more affordable—potentially putting their safety at risk and increasing commute times. This can have an affect on job burnout and compromise retention.
As an employer, there is something you can do to combat this and, in return, you can further distinguish yourself as an employer of choice—consider employer-assisted housing as an employee benefit.
Employer-assisted housing benefits can come in a few different forms.
Monthly Housing Stipend: Some companies, especially ones located in high-cost areas, will provide a monthly housing allowance to offset the cost of living. This is in addition to an employee’s monthly salary.
Assistance with Closing Costs or Down Payment: Often times, for relocating employees, companies will offer to pay for a certain percent of the down payment or cover the closing costs to help with the purchase of a new home.
Fully Subsidized Housing for Interns: Offering your interns housing isn’t just a way to help diversify your intern program, it also helps your future employees save! If your interns don’t have to worry about paying for housing, they can save more from their summer internship. The earlier a person can start saving for a home, the better. (On average, it takes 11.9 years for a college grad with debt to save for a home). If your company provides an intern housing benefit, your future employees will be in a better place financially to accept a full time position.
Student Loan Repayment: While not technically an employer-assisted housing benefit, student loan repayment assistance can help employees with the burden of student debt. This in turn helps millenials save up for a down payment on a home. Many companies are jumping on this trend—offering this benefit as a means to attract talent and differentiate their employer brand.
Millennials aren’t buying homes, and if they are, many of them are receiving help from their parents. While many people don’t have the familial support they need to help them buy a home, they could have help from their company. In order to remain competitive, companies must pay attention to the millenial housing market and consider offering housing benefits to their employees. After all, a more permanent home means more permanent retention.