Virginia may be for lovers, but it's also for singles, at least in the bustling city of Richmond.
Among 18- to 35-year-olds, 15% of Richmond residents live on their own, according to a recent report from home listings website Zillow. That's a higher rate than any other major metropolitan area.
Millennials, generally defined as those born between the early 1980s and the start of the 21st century, serve as today's "boomer" generation, totaling 83 million to 75 million, respectively, according to government numbers. An estimated 1 in 4 Americans are millennials.
Millennials slow to transition to buying homes
Because millennials represent such a sizeable chunk of the adult U.S. population, they're having a heavy impact on the real estate climate. For instance, according to the National Association of Realtors, less than one-third of home buyers are first-timers, down from a long-term historical trend of 40%.
The reason? In addition to high asking prices on homes for sale, many millennials are burdened by student loan debt. Approximately 7 in 10 renters say they are putting off buying a house because they can't afford to pay both a mortgage and tuition simultaneously, based on a separate poll by the NAR.
In Richmond, Virginia, however, a combination of employment growth and earnings enables millennials to fly and buy solo.
"With home prices and rents rising as fast as they are, it's a common assumption that young adults in many cases cannot afford to live alone," explained Svenja Gudell, Ph.D., Zillow chief economist. "Though that may be true in some markets, there's still a large number of amazing places across the U.S. that are prime for millennials to thrive independently."
In Richmond, the typical 18- to 35-year-old earns a median salary of $49,500, according to Zillow's estimates. That's nearly $10,000 more than the city with the second highest percent of millennials living by their lonesome, which is Pittsburgh. Slightly over 14% of millennials in the Steel City buy or rent independently. Approximately 17% of millennials in Pittsburgh earn enough to live alone.
That being said, cost of living conditions in Richmond and Pittsburgh, among a few others, may be aberrations. The report found only 11% of millennials in the U.S. overall are self-sufficient, and with home values rising by 5% over the last year – and up 3% for the cost of rent – that percentage could diminish.
Renters far too frequently neglecting insurance needs
One of the advantages of living independently, for those who are able to do it, is not having the kind or amount of expenses that people with family to support often have. At the same time, though, renters frequently neglect to protect their financial interests in the same way that homeowners do. For instance, approximately 90% of mortgage borrowers reported having homeowners insurance in 2015, according to data from the Insurance Information Institute. The same can't be said for renters, as just 40% said they had renters insurance. Renters insurance is particularly uncommon among millennials – at only 38%, a stark contrast to the 52% of baby boomers who are covered.
The perception that it's expensive may be to blame. But according to the National Association of Insurance Commissioners, premiums usually average $15 to $30 a month, sometimes more or less depending on the policy and what's included. Plus, for those who bundle their policies with car insurance, renters can yield significant savings.
You can also bundle renters with life insurance, another type of coverage that people think costs more than it does in reality. Typically, consumers think life insurance premiums are two times higher than their actual price, based on analysis done by worldwide research organization LIMRA.
In short, you can't afford not to have these key protections in place, regardless of your living arrangements.