Millennial Nightmare: Unaffordable Housing

The Millennial Nightmare: The Psychological Toll of Unaffordable Housing

As a Professor and Licensed marriage and family therapist with expertise in various areas of mental health, I have witnessed the profound impact economic challenges can have on millennials and their mental well-being. The dream of owning a home — once a cornerstone of the American Dream — has now become an elusive fantasy for many in this generation, and ultimately can contribute to stress, anxiety, and depression.

As a therapist, I help address the mental health aspects of financial stress and its impact on couple and family relationships. In addition to direct clinical work, larger systemic interventions are needed to eliminate this significant stressor that affects individuals in society.

The crushing weight of financial stress and anxiety

Millennials are trapped in a housing market with skyrocketing prices and stagnant wages. As such, the dream of homeownership seems increasingly out of reach for many, forcing individuals, couples, and families to bear the weight of financial stress and anxiety.

Unlike previous generations, despite being at the peak of their home-buying capacity, millennials are being outbid by their parent generation — Baby Boomers. Nevertheless, they have come into what Fortune describes as “one of the most competitive, expensive, and unforgiving housing markets of recent times.”

Increasing housing costs have forced millennials to decide what they can and can’t afford, as well as where they can or can’t live. And for many who have purchased a home, their worry is now being able to afford their children’s college tuition. In 2019, Hometap conducted a survey in which 73 percent of millennials stated they felt “house rich, cash poor,” meaning they may own their home, but they don’t have a lot of wiggle room to save.

Deloitte also found that millennials are constantly feeling anxious about the high cost of living, as many have admitted to living paycheck to paycheck, recognizing that their finances hold much control over their lives. Because of the financial stress they feel and the constant pressure to live up to the American dream, one in five millennials hold two or more jobs. Further, millennials who come from families with less financial resources may be at a disadvantage and may present with more student loan debt and overall debt. This may lead to the experience of even more financial stress and more difficulty when trying to eliminate debt.

Dreams deferred: Disappointment and loss

Owning a home represents more than just a financial investment. It symbolizes a place where memories are made, roots are firmly planted, and a sense of identity and pride can flourish — like what their parents established for them as they were growing up.

Failing to achieve this milestone can trigger a profound sense of loss, deviating from the envisioned path of one’s life. Comparisons to others who seemingly effortlessly entered the housing market can intensify disappointment, creating a perceived gap between personal achievements and societal expectations.

For millennials, the inability to achieve this milestone deviates from the envisioned path of their lives. The expectation of owning a home was ingrained in their understanding of the American Dream, but the harsh reality of unaffordable housing has shattered that dream for countless individuals. The stark contrast between their aspirations and the problematic reality they face creates a profound emotional impact.

Furthermore, the emotional impact of being unable to own a home is exacerbated by the overarching societal emphasis on homeownership as a marker of success and financial stability. Millennials may internalize these societal expectations, leading to self-doubt and inadequacy.

The psychological toll of unaffordable housing can permeate various aspects of millennials’ lives, influencing their overall mental health and sense of self-worth. It also impacts couples, families, and those who have pushed off starting a family.

Many millennials are grappling with a general sense of disappointment for not beginning a conventional life and feel stuck in trying to get ahead. This lacking sense of stability and security can erode a person’s self-esteem and well-being.

The impact of student loan debt on homeownership

According to statistics from Bankrate, 79% of millennials currently possess an absurd amount of student debt. Increasing tuition costs, limited financial assistance, and rising interest rates have left many millennials grappling with a significant financial obligation that lingers long after graduation. Millennials between the ages of 35-49 hold an average of $43,400 in student loan debt, while 31 percent of those younger than 35 have over $200,000 in student loan debt.

The burden of student debt affects millennials’ ability to enter the housing market and influences their financial stability. The ongoing need to allocate a significant portion of their income towards loan payments limits their capacity to save, invest, or pursue other financial goals. This, in turn, perpetuates the cycle of financial strain and further delays the possibility of homeownership.

The psychological impact of student debt cannot be ignored, as carrying a substantial debt load can lead to feelings of stress, anxiety, depression, and even shame. Millennials may experience a sense of being trapped by their financial obligations, perceiving themselves as unable to progress or achieve other important life milestones, such as homeownership. The weight of student debt can also impact their mental well-being, contributing to higher stress levels and reduced life satisfaction.

Despite being the most diverse and well-educated generation, millennials have entered a housing market that seems stacked against them, but this isn’t to say that other generations aren’t sharing their own psychological burdens due to the volatile housing market.

The impact of unaffordable housing goes beyond financial considerations, and millennials experience a deep sense of disappointment and loss when they cannot achieve the homeownership milestone. Comparisons to others who effortlessly entered the housing market intensify feelings of inadequacy and failure.

The overarching societal emphasis on homeownership magnifies the psychological toll as a marker of success and stability. It’s essential to address the psychological toll of unaffordable housing on millennials, and it is crucial to find comprehensive solutions for their mental health and the housing market crisis in general.

Only through collective efforts and systemic changes can we ensure that the dream of homeownership becomes a realistic and attainable goal for this generation and future ones.