[Serious] How is the millennial generation buying homes?

[soulcougher73]

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.

Could be car payments also. If you both have newer cars i bet that is close to $700-1000 month depending on what you have.

 

[bbhaag]

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.

He mentioned in the OP that his wife has her doctorate so I'm gonna go out on a limb here and say yes they have student loan debt. He also mentioned they both have advanced degrees so I'm guessing he has his masters.

OP:What's her degree in and how much student loan debt do both of you have?

 

[Red Squirrel]

Yep student loans should be avoided (that takes planing starting from high school - get a summer job and save up from the start) and car payments for sure should be avoided. You can get perfectly good used cars in the 5k range. It just makes no sense to buy new unless you have lot of disposable income. You need to look at the total cost not just the monthly payments. A new car is like 30k and can even be over 60k depending on what you get. Think of all the other things you could do with that money.

That's ok though the more people buy new the better the used market is, so buy new!

Not owning a new car is also how I will justify dropping 50k on more land.

 

[snoopy7548]

Yep student loans should be avoided (that takes planing starting from high school - get a summer job and save up from the start) and car payments for sure should be avoided. You can get perfectly good used cars in the 5k range. It just makes no sense to buy new unless you have lot of disposable income. You need to look at the total cost not just the monthly payments. A new car is like 30k and can even be over 60k depending on what you get. Think of all the other things you could do with that money.

That's ok though the more people buy new the better the used market is, so buy new!

Not owning a new car is also how I will justify dropping 50k on more land.

Not owning a new car is how I justified dropping ~$8k on a pinball machine!

 

[Red Squirrel]

Not owning a new car is how I justified dropping ~$8k on a pinball machine!

Haha nice. That machine will probably hold it's value and useful life longer too.

That said it's fine to spend a lot on a car if it's a hobby, but as a utility thing then it makes more sense to buy used. In fact I'm starting to see that with a lot of things, I was going to put 1k on a sliding mitre saw since mine does not slide and I sometimes find myself limited by it. Well managed to get one for FREE from my grandpa. I also subscribed to all the buy/sell listings on FB for my area and it's incredible the stuff I find on there. Even heavy equipment. I saw a backhoe go for like 10k a while back. It's good to know this sort of stuff is out there for when I do buy a property. So many toys I want to buy, so little room and money.

 

[brianmanahan]

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.

or live somewhere where houses still run 100-200$k

a place where you can get both good pay and low house prices makes it ez mode

i prefer paying a few hundred bucks a month for rent and not worrying about the house headaches

 

[MagnusTheBrewer]

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.

Not sure you're living in the same planet as the rest of us.

 

[BarkingGhostar]

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

Was this on Anandtech? Were there pictures?

 

[Wuzup101]

Not sure you're living in the same planet as the rest of us.

It really depends on what career field you are going into. That being said, if you picked something useful in college (or hell did a good job w/ a trade school in high school) he's not wrong. 30Y/O is what, 11-12 years out of HS? That's 4 year degree + 7-8 years of post B.S. experience or, taking votech in HS + 12 years of additional trade experience and schooling. By that time you should have enough experience as a plumber, electrician, HVAC tech, roofer, framer, auto mechanic, etc... to be making some serious money, opening your own business, creating side hustles, etc. If you went the college route, it's pretty easy to get up to the 100k level with a STEM degree with 8 years of experience. Most of our engineers are there well before 8 years (and I'm not in a location where there is a particularly high demand for engineers/scientists).

I guess my point is, if you are going to pay a butt load of money for college (you probably shouldn't), you better be getting a degree with a significant ROI. Too many millennials are coming out of college with 100k in debt just so they can make the same money as a good starbucks barista.

 

[ImpulsE69]

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.

If the bank told you you can afford 3x your income, they are lying to you. Laugh at them and walk out. Go cheap or don't buy. A house payment should be cheaper than what rent would be. Or maybe you need to look in a more affordable neighborhood.

A few pointers, since you really didn't give too many details:

1. With 2 of you you've already steps ahead of most. It is no lie that two can live cheaper than one. Use it to your advantage.
2. Not everyone can get everything they want all at once - if you are getting brand new vehicles, the latest 'this or that', etc, that is less money for other things. You have to spread it out over time. Don't go out to eat all the time, etc. Budgets are your friend when starting out. Our culture has a serious gotta have it now issue. I make good money and I bought 1-2 year used vehicles my whole life. I finally bought a brand new vehicle 9 years ago when used prices were actually higher than new (and I still have that vehicle).
3. You don't need your dream home NOW. You can buy something nice now, and most likely the price will go up over time and you can always trade up later assuming life is still going your way.

 

[Dr. Detroit]

Without specifics on your Finances - no one can give you a shit bit of advice.

One thing is for sure - you two need to cut back on the expenses.

 

[sdifox]

Was this on Anandtech? Were there pictures?

No way I can find the thread again. It's ancient.

 

[KentState]

Not sure you're living in the same planet as the rest of us.

He asked what it takes and that's what I stated. Whether or not someone plans for that scenario or not determines if they start owning a home in their 30's. If you go into enough debt in college and are not making $100k a year, then you did it wrong. That's a very low bar to hit these days, especially if you are taking on advanced degrees. We are always hiring folks in the $75-100/hour range and I have worked with thousands of normal people that have done it.

Where every generation since the 70's have got it wrong is they plan to get to the next life stage, which is not far enough down the road. I saw quickly that college was going to be a huge waste of money so I moved on before incurring debt. I hit my goal of being able to make over $100k by 30 and over $200k by 40. There wasn't anything special about what I do or how I did, besides planning for it. Having houses, cars, child and every other expensive proposition was factored into that. Maybe the planet I'm living on is not the same one, but I would question how serious of a look you took at a goal and how to reach it.

 

[Viper GTS]

I'm technically a millenial, barely. High income makes it easy but realistically we could have done it on half the income we have or less.

I bought last year when the house I had been renting for six years got sold. We hadn't really been planning to move or buy but we decided that the control factor was worth the increase in monthly cost. We spent probably 1/3 what we could have been approved for which makes even the $11k in taxes easily doable and similar to our old rent. We did only 5 percent down because PMI is stupid cheap. I sold a car that I was leaning towards selling anyway and used the cash for down payment plus bidding war ammo. If I'd been planning to buy and didn't already have the paid off Viper it would have taken a bit longer.

If you are in your 30s and reasonably technically minded (if you aren't how did you end up here?) there is almost no reason you should not be well over $100k in a high cost of living area. I was there by my late 20s. I will likely cross $200k by 40. And if I'm being completely honest I'm lazy. This is not a result of any massive planning or effort on my part it's just being in the right industry and having the kind of reputation that makes people call you when awesome jobs come up.

Viper GTS

 

[skull]

Has to be a spending problem, I make 50k/year, single and save 4 times as much as you do a month with 2 high incomes. I bought my first house at 30, 4 years ago and saved up enough since to both pay it off and put a down payment on another. Housing prices are cheaper here and I bought a fixer upper, though most people make less and have the same complaints you do of how hard it is because they blow all their money.

 

[sdifox]

I'm technically a millenial, barely. High income makes it easy but realistically we could have done it on half the income we have or less.

I bought last year when the house I had been renting for six years got sold. We hadn't really been planning to move or buy but we decided that the control factor was worth the increase in monthly cost. We spent probably 1/3 what we could have been approved for which makes even the $11k in taxes easily doable and similar to our old rent. We did only 5 percent down because PMI is stupid cheap. I sold a car that I was leaning towards selling anyway and used the cash for down payment plus bidding war ammo. If I'd been planning to buy and didn't already have the paid off Viper it would have taken a bit longer.

If you are in your 30s and reasonably technically minded (if you aren't how did you end up here?) there is almost no reason you should not be well over $100k in a high cost of living area. I was there by my late 20s. I will likely cross $200k by 40. And if I'm being completely honest I'm lazy. This is not a result of any massive planning or effort on my part it's just being in the right industry and having the kind of reputation that makes people call you when awesome jobs come up.

Viper GTS

Dude I thought you were my age... Get off my lawn!

 

[rcpratt]

I purchased a condo in 2013 (when I was 25) for about $170k on about 5% down. We were very fortunate and sold it for $260k in 2017. Used that money and purchased a house for $550k in 2017.

We live in a relatively low COL area, though. I don't know how people in NY/LA/SF do it.

 

[JM Aggie08]

I got a useful 4 year degree, and coupled with my interpersonal skills, got a fantastic job. Same for my wife.

Been a homeowner since 24.

 

[RearAdmiral]

Am millenial. I bought a house while I was making around 70k in my later 20's. I got married a couple years later and still live in the same joint. I work in the heart of NJ and live in PA.

I can lay out what frustrates me most about millenials beyond the school debt situation. Quite a few of my millenial co-workers just refuse to compromise on what they "want", despite the actual costs of that way outweighing whatever utility they think they are getting in return. They are cool with paying 3-4k mortgages on regular homes as long as they are close to all the cool stuff / happenings. Driving 20 minutes to the movie theater or a good restaurant area is a no go for them. Everything seemingly needs to be on top of them. It is like they can't imagine multiple options to housing situations, there are so many unique ways to live and own a home. I'm sure a number of them are a few non-paychecks away from being on the streets with mortgages that size.

Really the only thing that I don't like about where I live is my 52 minute commute, but all the positives outweigh losing that time.

My house is in a nice enough neighborhood of a generally depressed area. I live a 3 minute walk from an athletic track / park, a 3 minute drive to a grocery store. I have a surprisingly large sized yard for being "in town." My house was generally a dump when I bought it, it was a foreclosure. I've put a ton of time and renovation into the house over the years and it is now legit nice. I contracted stuff out of my league but did so much work on my own.

So currently I have a 15 year mortgage that is peanuts, I can live like a king and still save plenty.

Basically you don't need to live in NJ. I'd suggest you get the heck out of there, housing is legit stupid in that state.

Millenials can afford housing if they compromise on what they want. They are plenty of decent homes by me in the low 100k range. About the worst I have to deal with is people making fun of me because I live in PA, not exactly challenging stuff. My fat stacks will have the last laugh.

 

[Viper GTS]

Am millenial. I bought a house while I was making around 70k in my later 20's. I got married a couple years later and still live in the same joint. I work in the heart of NJ and live in PA.

I can lay out what frustrates me most about millenials beyond the school debt situation. Quite a few of my millenial co-workers just refuse to compromise on what they "want", despite the actual costs of that way outweighing whatever utility they think they are getting in return. They are cool with paying 3-4k mortgages on regular homes as long as they are close to all the cool stuff / happenings. Driving 20 minutes to the movie theater or a good restaurant area is a no go for them. Everything seemingly needs to be on top of them. It is like they can't imagine multiple options to housing situations, there are so many unique ways to live and own a home. I'm sure a number of them are a few non-paychecks away from being on the streets with mortgages that size.

Really the only thing that I don't like about where I live is my 52 minute commute, but all the positives outweigh losing that time.

My house is in a nice enough neighborhood of a generally depressed area. I live a 3 minute walk from an athletic track / park, a 3 minute drive to a grocery store. I have a surprisingly large sized yard for being "in town." My house was generally a dump when I bought it, it was a foreclosure. I've put a ton of time and renovation into the house over the years and it is now legit nice. I contracted stuff out of my league but did so much work on my own.

So currently I have a 15 year mortgage that is peanuts, I can live like a king and still save plenty.

Basically you don't need to live in NJ. I'd suggest you get the heck out of there, housing is legit stupid in that state.

Millenials can afford housing if they compromise on what they want. They are plenty of decent homes by me in the low 100k range. About the worst I have to deal with is people making fun of me because I live in PA, not exactly challenging stuff. My fat stacks will have the last laugh.

I do about 35 minutes now and it's about the limit of what I'm willing to do. At the ragged edge really. If it were just me I would have never bought this far out but my wife now has an 8 minute commute. We basically swapped commutes, she did the 45+ thing for four years. I have enough flexibility in my schedule that I can avoid heavy traffic most of the time. That combined with the six car garage and it was an OK situation. In some ways nice actually because cars are actually warm before I get to work.

That said, I don't think not wanting to spend your life in a car is something to criticize. If we both had jobs that usually had us near the city we would never have bought where we did. It's just not worth it. Maybe if you have lower income and strongly value the home ownership/family life thing it would be different but I'd rather own one or two fewer cars and free up the time.

The home price and tax situation here in New Jersey is easy to criticize from afar but my experience actually living here is that it's entirely workable on good income. You have an entire career worth of opportunity without ever having to move for a job. And when you are done working you can leave. It's absolutely terrible if you are low income but there aren't many places I'd rather be.

Viper GTS

 

[nakedfrog]

No way I can find the thread again. It's ancient.

https://forums.anandtech.com/threads/male-escort-serive-update-number-3-now-with-poll.1609341/

 

[s0me0nesmind1]

@ 31 I (sadly) fall into the millenial bucket

My wife bought her first home while she was still single before I even met her. She was probably making ~$65k or so starting salary after 2 years or so of being in apartments. I believe it was in 2009 shortly after the housing bust.

It was a complete new home from a crap builder. Cookie cutter home in the semi-subburbs of our city. I think she got some decent tax benefits from the bust, but overall it was an FHA loan @ 5.00% APR since she didn't have much for credit. Also had to pay your standard MIP (Mortgage Insurance Premium). Overall a crap loan, but suffice to say, it was a starter home. Obviously since it was an FHA loan, she didn't have more than a few thousand as a down payment, certainly not 20%. The home was basically $150k new.

We met a few years later, dated, married, etc. Over the course of the next 7 or 8 years I took over finances (of course heh) and refinanced at a much lower 2.75% and paid it off in full with extra principal around year 2017. Part of that is my salary drastically grew from moving employers. When we met I was working a crappy office job of Credit/Collections at ~$48k. Today my salary is... well... much more than that. I honestly credit it to moving around instead of staying still. My wife's pay has gone up a good bit (raises, promotions to next level), but I quickly surpassed her and she has been with the same employer and department since I met her.

We actually moved last year to a much more upscale house further out in the subburbs in anticipation for sending our kids to school. The starter home appreciated and sold for ~$215k on the first day.

Suffice it to say, it is very much attainable. If there is anything you should take from my post however it is this: Start with a starter home. You will dream of a luxury home with an awesome neighborhood and upscale shit. That isn't reasonable - just like it isn't reasonable to go to an employer out of college and demand an experienced position. Work in baby steps and you will grow over time. On top of that, your home price determines your property taxes... so again, start small.


EDIT: Also, helps that my new job is 100% remote. Work from home unless I have to be somewhere (which isn't too often).

 

[s0me0nesmind1]

Not sure you're living in the same planet as the rest of us.

Well, I generally agree with your statement... but... with doctorate + advanced degree, I can't say his statement is too far off in this particular case.

 

[s0me0nesmind1]

Am millenial. I bought a house while I was making around 70k in my later 20's. I got married a couple years later and still live in the same joint. I work in the heart of NJ and live in PA.

I can lay out what frustrates me most about millenials beyond the school debt situation. Quite a few of my millenial co-workers just refuse to compromise on what they "want", despite the actual costs of that way outweighing whatever utility they think they are getting in return. They are cool with paying 3-4k mortgages on regular homes as long as they are close to all the cool stuff / happenings. Driving 20 minutes to the movie theater or a good restaurant area is a no go for them. Everything seemingly needs to be on top of them. It is like they can't imagine multiple options to housing situations, there are so many unique ways to live and own a home. I'm sure a number of them are a few non-paychecks away from being on the streets with mortgages that size.

It's been shown that as much as millenials are known for that kind of thinking - it quickly fades away when they actually get married, have a family, etc... They move to the 'burbs and further out just like anyone else would with half a brain.

Getting drunk and walking back home, and sitting around shopping centers isn't as much fun once you... you know... grow a brain in life.

 

[Viper GTS]

It's been shown that as much as millenials are known for that kind of thinking - it quickly fades away when they actually get married, have a family, etc... They move to the 'burbs and further out just like anyone else would with half a brain.

Getting drunk and walking back home, and sitting around shopping centers isn't as much fun once you... you know... grow a brain in life.

There are tiers though. Around here people live in Jersey City if they are looking for that kind of life. Where I previously lived in Wood-Ridge was just about perfect I think. I had a bus line with a IIRC ~20 minute ride into the heart of NYC a block from my house, house prices in the 5-600k range, ~15k taxes. Where I ended up house prices are in the 4-500k range generally and $10-12k taxes. I work with people who do the PA thing with 1-2 hour each way commutes under normal traffic. They are all out of their goddamn minds and/or just young and commuting from their parents homes.

Viper GTS