Millennials today are leading the way in Home Equity Lines of Credit. According to TD Bank, millennials are tapping into home equity line of credit 2 times faster than Gen X’ers and more than 9 times as fast as baby boomers. How is this possible when millennial debt is at all time record highs?
Over the past 8 years, we have seen an economy that has created more part time jobs than full time jobs, while at the same time destroying many full-time jobs that now no longer exist. Credit card debt, student loan debt and car loan debt have all exploded and today’s millennials are in worse financial situation than they were just eight years ago.
The idea that millennials are taping into Heme Equity Line of Credit (HELOC) to upgrade their homes is a preposterous idea. Home ownership in the United States is at a 30 year low, at 63.7%, and of the $83M millennials in the United States, it is reported that only 34% of them own their own home. Furthermore, a recent poll by Apartment List showed that most millennials who are in the market to buy their own home want “new homes”. In other words, no hand me downs for these home buyers.
The real reason millennials, how are home owners, are tapping into Home Equity Lines of Credit have to do more with the fact that they are strapped for cash. This economy is no producing the breadwinner jobs needed to sustain a household and when the Federal Reserve has interest rates at historic record lows and is threatening you with the premise of raising those rates, why not borrow money now at ultra cheap rates to pay down more expensive higher-interest debt, like credit cards, pay down student loan debt, or go on a vacation they cannot afford to pay for cash.
Check out this episode for my thoughts on all of this.
PS: My iMac froze right as I was getting ready to Screenflow recording and I lost the whole thing. Unfortunately, I was not able to recover it so no video recording of me recording this podcast episode. womp. womp.
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- Episode 120: Negative Interes Rates – The War for your Cash
- FED: Home Ownership Rate for the U.S
- FED: Federal Funds Rate
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