This story in BusinesssWeek had me scratching my head a bit. More and more college graduates are opting to rent rather than buy--homes, cars, and even clothes. The article seemed to think it was a cultural shift.
Some of it makes perfect sense to me--if you lost your job (like one person in the article) you may feel skittish about committing to a mortgage--after all, how do you know your current job won't evaporate? How do you know you won't have to move? How do you know you won't have to sell your place, possibly at a loss?
So it makes sense--I think the push to buy homes (instead of giving people the opportunity and access to good-paying jobs) got us into this mess. Buying a home is a great thing, but in order to do it, salaries have to be good and the actual home prices have to be reasonable. Yet instead of creating those conditions, we opted for the smoke-and-mirrors approach. What we did last decade was push interest rates lower and lower which, in my neck of the woods at least, seemed to push housing prices higher and higher. After all, the rates were low! Your monthly payment was low! And then things like 40-year (!) mortgages came out which didn't help much at all. Look, your payment is lower! So what if you'll be in debt until your eighties?
And everyone was surprised when that bubble burst.
So, I can see why a young graduate would side-eye home ownership. Not to mention the fact that most people in their twenties aren't sure where they're going to end up--heck, I kept thinking I wanted to move to various places in the US, then overseas (which I did) before I came back here and planted roots.
And if you live and work in a city, it makes perfect sense to not own a car. Most cities have decent public transportation so why incur such an expense? You need a car, you can use something like Zipcar, which rents them by the hour.
Some of the things the article talked about some people renting made no sense to me. Furniture? You can go to a thrift store and get furniture for much less money than renting it. Clothing? I mean, sure, for a very formal event I see it, but companies like Rent the Runway seem to have perfectly ordinary (cute, but ordinary) sheath dresses and other clothing items for rent for 10% of their cost. That sounds great until you realize that simple sheath dress cost $3,000 and that you could buy a perfectly good looking dress for much, much less.
It's also not as if the people interviewed in the article aren't spending money. They go out to eat. They take trips. They aren't living like monks. It does seem to be more of a mindset than anything.