Once Bitten Twice Shy: From Student Loans to Mortgages

Once Bitten Twice Shy:  From Student Loans to Mortgages

The most studied and talked about generation in history, Millennials, is all grown up. From the stereotype of the participation trophy to being the culprits of killed off industries, this generation has been much maligned. They go back to their parents after college and don't even buy a house until maybe far later.

While Millennials are now the biggest market for buying homes now, it is still a lower percentage than Generation X or Baby Boomers when they were the same age. All grown up and a good deal less buying houses by percentage, what gives? Aren't they established by now?

We can try and scan the market for some surface trend or contrived preference, but to really understand why, you must experience their world looking forward to a future they've desperately tried to extrapolate and a past they've tried to reconcile with expectations.

Imagine, you are in high school, whose sole existence is about shipping students off to college. Every grade in class is a piecemeal judgment on your trajectory in life. The parents all talk about college. Your friends and acquaintances all talk about college. Your professors and guidance counselors.

It is the sole decider of who you are and what you will be, and will either propel or stunt your next 60 years in life. It is the gauntlet from which you will come out on the other side either loving life, or watching your hopes and dreams speed by like a train you had just missed.

Morning in Paris Metro
Your dreams -->

The amount of pressure to both rise in prominence in your identity and to figure who you are at 17, as you try to extrapolate world trends without any skill for it or any sense of proportion, is ungodly.

For the people that did everything right and everything they were told they needed to excel in- if the pressure was on to get into college, it was really on once your parents cosigned on the loan. For people that would go on to graduate with $100k+ in debt, now your dreams were risking your entire family's financial future. With them on the hook this time, the risk and the mission resided in the very soul of the young person. If you still didn't know who you were, you'd better find out quick.

How does one do that, with an accelerated clock to zero and dire consequences for failure?

But at the end of 4 years, you made it warts and all, and without really knowing of any game-beating strategy. With a broken wing of subpar internships from the mud of the Great Recession, you try to fly to your first real full-time job, with just 6 months grace time before your monthly penance comes due. Before the screen goes black and your family gets dragged down with you.

Cause they’ve been swimming in the wrong waters. Now they’re pulling me down.
Your future

First you are hopeful, going for positions that might "require" 2 years experience for an entry level position (whatever that means). But slowly, as the clock runs out, the jobs you apply for descend in pay and quality with your hopes.

At the end of six months, all your responsibly chosen major was worth was to be a barista at Starbucks. Or in operations in a dirty warehouse, with the people who never went to college. There you are at home, eating your Mom's casserole, while all of your paycheck goes to the student loan of an enterprise that has turned your dreams into a parody of itself.

As you lie awake at night, you try to figure out what went wrong. And then it dawns on you.

The object of your ambition, the main hallmark in your personal pursuit of happiness, the level of college degree you aimed for to be commiserate with your hopes for life, was all for nothing. It wasn't your passport to the world or your "foot in the door". As you interact among people that were never part of the supposed upswing to a great life, who never went to college, you realize you sacrificed everything only to get nothing.

Solheimasandur Plane Wreck
What came of your best efforts...

With no other choice, you build from there. Some years go by and you've come up from the bottom again, a place that we were all taught was for losers. With $50k still left from the last wound of the spirit, now the world is saying "Well, time to buy a home now, son. It's that time in your life now, daughter".

The last bait and switch deeply hurt, and with your personal net worth still in the negatives, you're still very much being affected by it. But you're now to take the dive once again based on what the circumstances around you are telling you. The media, the cues from what Gen X is doing, what some few Millennial friends you have are doing. This is starting to look and sound familiar. Like a replay of the past you've tried to forget.

Only when you understand this pyrrhic journey of Millennials will you then not be surprised at the many more saying "Thanks, but I'll sit this one out". That at the end of the day, each Millennial only has one pool of money to be taken. Debt never tasted so ugly.

Old brick wall background
Another brick in the wall...

Perhaps the missing percentage of home buyers will take up the supposed mantle someday and buy a property. Maybe everything will even out in the end. But for now, a large part of the Millennial home buying market is a case of once bitten, twice shy.