The economic crisis that arrived with the Coronavirus brought a downturn to millennials’ savings accounts, which as a consequence is making it harder for this demographic to own a home in 2020. According to the Realtor.com, the outbreak is affecting millennials financially even though this group doesn’t have high health risks when it comes to COVID-19 infections. The rate of unemployment has increased since the start of the infection, which forced many people to turn to their savings as a backup during hard times.
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Many Millennials Used Savings for Daily Necessities
As the unemployment rate nearly reached a million unemployed people who lost their jobs during the COVID-19, many millennials were forced to use their savings. Outside the crisis and in normal conditions, these savings were more likely to be used as a down payment for a housing mortgage. Since the crisis took place quickly and changed the way businesses are operating, millennials should take more time to earn those spent funds back.
Millennials Could Take Up to 9 Months to Earn the Spent Funds
As Realtor.com reports, it could take up to 9 months averagely to earn back the savings that took only a month to be spent. That would be in the case of active employment as researches claim. According to the same researchers, in conditions where millennials would remain unemployed, it would take around 53 months to retrieve these funds, which is more than 4 years in case there would be no generated income for the next 6 months.
Will Millennials Recover from the Fallout?
Many millennials are using their savings that were otherwise reserved for future down payment to apply for a housing mortgage as chief economists at Realtor.com, Danielle Hale claims. The crisis is not over yet, so it is more likely that millennials will use their savings for everyday expenses such as food, bills, and rent. Millennials will recover at the current rate of unemployment set at over 13%, however, the recovery may take from 9 to 53 months.
