[Serious] How is the millennial generation buying homes?

[z1ggy]

Without making this thread super long with details, my wife and I (29,31) with all income and costs taken into account, can only save $400 a month. Maybe some months we could save a bit more, but we feel comfortable with that set amount right now. We both have advanced degrees and she even has a doctorate. We just met with our financial adviser who showed us that with just saving $400 a month plus the savings we currently have, it will take us roughly 21 years to afford a down payment on a house if we want to aim for a "full" 20% down payment... and this assumed no extra increases in expenses such as ohhhh I don't know, the kid we expect to have next year, and the cars we will undoubtedly need to also have money set aside for, and the bigger apartment we'll likely need (currently in a 800sqft 2bed).

How is our generation expected to buy housing going forward while we are faced with staggering debt and wages that don't let us get out of debt fast enough? I don't think owning a home is the end all be all... but if a couple like us who makes decent money is facing this situation, I can't imagine how others might be doing. Could the housing market collapse again because of this? Will rent's skyrocket because as buying power decreases, the demand for rentals jumps drastically?

After this meeting, my wife is now highly considering a second job. Poor girl went through 7 years of school, studied her ass off and helps people every day... This is what she's having to do now. I'm just a bit depressed, maybe feeling like things are a bit bleak for lots of others, too.

And before you say "just get a higher payin' jarbbbb!!" yeah, working on that.

 

[nakedfrog]

Bought my first one with no downpayment (a couple years before the big crash), and the second one was with a rehab loan (fixer upper on a repossessed house) that needed a minimal downpayment. In a rural town well outside the metro area, so the housing was cheaper as well.

And I'm not even a millennial. Sucks to be y'all.

Also, quit killing Applebee's, you jerks.

(Just kidding, fuck Applebee's)

 

[MagnusTheBrewer]

You're trying to buy too much house or, you're doing it in the wrong place.

 

[z1ggy]

Bought my first one with no downpayment (a couple years before the big crash), and the second one was with a rehab loan (fixer upper on a repossessed house) that needed a minimal downpayment. In a rural town well outside the metro area, so the housing was cheaper as well.

And I'm not even a millennial. Sucks to be y'all.

Also, quit killing Applebee's, you jerks.

(Just kidding, fuck Applebee's)

Bought a house myself on 0% DP, was biggest mistake of my life. Considering the money I spent on it over the years on fixing sh!t and barely getting equity.. I lost money. I will never buy a house on 0%... let alone even less than 10%.

The state we are in has sky high taxes, too, so that's fun.

 

[z1ggy]

You're trying to buy too much house or, you're doing it in the wrong place.

Yup, wrong place but we can't easily move due to her practitioners license. NJ is a horrible place to buy, but that's where we are, so... it's what we need to plan for.

A 4 bedroom house with 2 baths in a decent area is like $400K and it'll be extremely outdated or have issues that need fixing. We went to look at a house listed for like $360k it was a freaking POS with 1 bedroom and a loft. wtf.

 

[RLGL]

The kids are buying home like everyone else: One at a time.

 

[Red Squirrel]

Luck of getting a good paying job and/or just living in the right area. I had a bit of both and bought my house at 23, I'm 33 now.

Landed a decent paying job, and my area houses are not retarded expensive like they are down south. Was preapproved for 200k and bought at around 165k. Could get even cheaper if I lived in one of the nearby smaller towns.

This was like 10 years ago though... time flies. I'd say it's probably harder now as house prices are higher and costs of living are also much higher.

If you're in a big city then forget about it, the best you'll probably be able to do is a condo in a high rise, or having to commute like an hour just to get to work.

 

[sdifox]

Welp, we did have a guy turn gay gigolo for his sli video cards. You just need to swing a lot longer.

 

[jpiniero]

They're not, but the ones that are have access to the Bank of Mom & Dad.

 

[repoman0]

We are 26 and 29 ... bought a condo a couple years ago and just sold for a single family in a town neighboring Boston. I make six figures and she makes like double what I do and we still could only put down 5% last time and 10% this time due to crazy high pricing. Monthly payments are not an issue at all but the down payment is impossible here unless you save like crazy for years and don’t actually live your life.

Yes you have to pay PMI but it works out favorably financially in the end as long as you stay at the place for more than a few years (aka not what we did the first time around because it turns out sharing an old house with someone sucks), trust me I made some cool matlab plots to prove it.

 

[deadlyapp]

I'm 30 and my fiance is 25 and we just bought our first home. Tired of paying rent in the 2000-2500 range and was able to buy a house with a mortgage in the 1500 range without having to do any significant long term saving (put about 4% down).

We have a solid retirement already saved and make around 150k together, with limited other debts (25k car, 25k student loan) which should be basically all taken care of in the next year with the money we're saving on the house.

I know plenty of people my age that have bought houses, however very few in significant markets (like Los Angeles) without settling for something like a condo.

it's all about expectations and needs.

 

[MagnusTheBrewer]

Yup, wrong place but we can't easily move due to her practitioners license. NJ is a horrible place to buy, but that's where we are, so... it's what we need to plan for.

A 4 bedroom house with 2 baths in a decent area is like $400K and it'll be extremely outdated or have issues that need fixing. We went to look at a house listed for like $360k it was a freaking POS with 1 bedroom and a loft. wtf.

Stop playing the realtor's game. Look at condemned properties, foreclosures and, bad neighborhoods close to good neighborhoods. Raze and build your own house. Hell, you can do it in stages. Think about your future. In twenty years, do you really see yourself in the same industry, same State, same perspective?

 

[rh71]

With parents' help where you pay them back over a longer period of time interest free. Around here, there are a ton of new construction going for $800k+ and every week someone under 30 is moving in with their young kids. Not to mention the $18k in property taxes that go with it every year. I can't imagine many of them make over $250k combined even for NY. They get help from others.

On the same token, we will be helping our kids as much as we can. Or better yet, we'll all move out of this area where union salaries drive up all the costs and none of our money is actually going to improve the place. Straight into their pockets, but I digress.

 

[LikeLinus]

Bought a house myself on 0% DP, was biggest mistake of my life. Considering the money I spent on it over the years on fixing sh!t and barely getting equity.. I lost money. I will never buy a house on 0%... let alone even less than 10%.

The state we are in has sky high taxes, too, so that's fun.

Something doesn't compute. You say that not spending more money up-front on your house was the worst decision you ever made because you had to spend money to fix it up?

How long did you own the property? Unless your land value went to the gutter, you shouldn't have lost money if the home is still valued the same. Sounds like you've over-improved the house for the area and that is probably why you lost money.

 

[Red Squirrel]

Wow 18k in taxes that's insane, I thought my 5k or so was bad.

 

[BurnItDwn]

High costs are why so many people commute so far to get to work.

By the office, houses are from like 500K and up
1 hour away, houses are like 200K and up.

Then there are condos and townhouses where entry level is like 1/2 to 2/3 the price of a house around here.

There is a crisis with home affordability in all of the major job centers in the US.
House prices have gone up
Wages/payscales havent kept up.

 

[Sonikku]

It's all very simple actually.

Step 1: Make six figures.

 

[Aikouka]

Houses are considerably cheaper in my area and wages are still pretty good. I considered taking a position out in southern California, but given I might only make 40-50% more due to cost of living, that wouldn't even cover how a house similar to mine would cost 2-3x as much. If you couple that with the higher taxes and insurance, and it just isn't worth it. Although, given that it would've gotten me out of the south-east US (Bible Belt), I was quite tempted.

Although, I think housing prices are starting to shoot up in my area too. At least according to estimates, my house is supposedly worth about 20% more from when I bought it about 3-4 years ago. To my knowledge, that doesn't even count improvements made (renovations, etc.). Due to some jobs coming into the area, houses are selling quicker, and a friend was telling me how his daughter ended up having to offer above asking price and make an offer quickly to even get a place she liked.

 

[thestrangebrew1]

Only way we could afford a house was going through the USDA Rural Home Loan program. It was our first house so it was a great way for us to get into the market. You're in NJ so I don't know what areas would be considered rural, but it's a great program (at least in my experience) to get your foot in the door. IIRC we only had to pay 1/2 closing costs, $0 down. This was 10 years ago though, I'm not sure if the program still exists or has changed.

Another caveat, where I live, almost everything in our county is considered rural, even the incorporated cities.

 

[Red Squirrel]

Unorganized townships are great too, super low taxes and the land itself is often really cheap. That's actually my future goal I want to build a mostly off grid house in such area as a retirement home. More land, more room for toys, and cheaper cost of living. No utility bills, low taxes etc. Why go to a vacation destination when you can build one! No building permits required in those townships so you can build whatever you want. It's like Minecraft IRL.

 

[snoopy7548]

Do you have student loans? If so, that's probably part of your problem.

Also, no offense at all, but if you have a financial adviser you're wasting money.

 

[dasherHampton]

I met a guy who commutes to Chicago 2 hours each way. I don't know how the F he does it. He even has some kind of work arrangement that allows him to start early and leave early.

But he was able to buy a really nice house South of Chicago just off of 57 for about $280,000 iirc and his wife is close to her family.

 

[KentState]

By your 30's you should be making $100k plus each if you are both holding decent jobs. On a salary of $200k a year, you should be able to swing a house. You also had about 8 years of time to save up money to get some type of down payment.

 

[Red Squirrel]

I would go nuts having to commute that much. The absolute most I would do is maybe 45 minutes and that's only if I happened to find some dream off grid lake front land and decided to sell my house and live there year round. The money I would save by not having all the utilities etc in town would sort of make it worth it.

 

[Wuzup101]

If you don't mind me asking, how much do you make combined? What is your monthly expense break down? The answers are, save more money (i.e. spend less money now), or make more money.

When you are looking for places, consider fixer-uppers. Bonus points if you can come up with something with a separate entry and rent half of it (either duplex style or something that has a walk out basement that you can fix up and rent). Buy the crap hole and make it nice.

I'm 34 and and unmarried, my GF (30) and I have been looking for homes in a major US city (both of us currently rent 1BR apartments). With just the savings that I've accumulated up until now, I can easily put 20% down on anything that we've looked at. We can't afford a turn key house in any of the really nice areas, but we can certainly afford a decent house in a decent area. We are also looking for places that we could afford to make the payments on using only one of our salaries.