When the housing market was strong, American’s believed in a future full of commitment. Buy one car and keep it for 20 years, save and buy a house, marry one person for life.
But the housing crash and ‘foreclosure nation’ we live in now is a reflection of how commitment-phobic people are these days. Cars are being leased instead of bought. When cars are bought, they’re being traded in after just a few years. The average age of people getting married is steadily rising. It now stands at 29, whereas it was 26.4 in 2000.
The X Generation has seen their parents go through hard times, with divorce and unemployment rates climbing steadily over the last 10 years. That has led to a young group of people that are very hesitant to commit to anything.
There is a scarcity in buyers at both the home and automotive levels. With jobs that were solid just 20 years ago (like those in the Post Office or Government) now seemingly tenuous, it’s easy to understand why 30-and-unders don’t want to commit to long-term deals. Even pre-paid phone ownership is on the rise, as discount dealers such as Metro PCS and Virgin have seen great rises in their cellular business. Gyms, viewed by most as expendable income, have stopped offering 48 and 36-month long contracts, and increasinging amounts are offering month-to-month deals.
Timeshare sales are a common impulse buy that has seen a number of factors in its decline. First, people don’t have expendable money to go on yearly vacations to the same place anymore, so they don’t want timeshares. They also come with lifetime commitments, or perpetual contracts that even extend to the children of the buyer. The yearly financial burden of something that is rarely used is the first cut in a budget-conscious family (this is often why cable TV service is being discontinued by many).
These conservative leaning practices are leading towards a decreasing national credit debt. The Federal Reserve said total consumer credit in November 2010 was $2.48 trillion, down 3.3% from 2008.