How Millennials are Buying Houses (hint: it's not from OnlyFans accounts!)
We’ve all seen the headlines.
“Millennials shut out of the housing market, again” – Washington Post
“Millennials and Gen Zers do want to buy homes—they just can’t afford it, even as adults” – CNBC
“First-time homebuyers are ‘royally screwed’” – Business Insider
With high interest rates and housing prices, on top of high student loan debt, inflation, and career stagnation caused by the Great Recession, only 43% of Millennials are homeowners, according to the most recent US Census data. This is more than 20% lower than the rate for Gen X, and 30% lower than for baby boomers.
For millennials fortunate enough to be homeowners, many of them have gone to great lengths to make it happen. Just how far have they gone? You might be surprised.
One millennial took a side job managing an apartment complex, on top of their full-time job, so she and her husband could live rent and utility free. The couple saved every penny she made for one year and then were able to buy a house.
Another couple took advantage of two different first-time buyer mortgage programs, the USDA loan and first-time homebuyer assistance, to make homeownership more affordable. Between the programs, they did not need a down payment at all.
Would you move back in with the parents to buy a home? One millennial did. This person stayed at home with their parents for a year after they graduated nursing school while saving almost every paycheck.
For those millennials looking to get married, one couple eloped in Vegas Elvis-style to save money. Then, whatever money they received from family and friends went towards a down payment. Another millennial couple avoided setting up any kind of gift registry altogether. Instead, they asked directly for cash gifts. The cash was used for a down payment.
One person moved to Europe to buy a home, saying they could never afford a home in the US on a professional teacher’s salary.
A boyfriend and girlfriend used a settlement from a car accident to help buy a home. That settlement, combined with an FHA loan, allowed them to buy a home.
Lastly, many other millennials are exploring co-buying as a realistic path to homeownership. Co-buying is when two or more people purchase a property and agree to share ownership. Zillow expects co-buying to continue to rapidly expand. Among recent homebuyers, 18% had purchased a home along with a friend or relative who wasn’t their spouse or partner. Also, 19% of prospective homebuyers intend to buy a home with a friend or relative in the next 12 months.
Co-buying makes homeownership more accessible. When the cost of a home can be split among several parties, more people can afford homeownership. And with real estate prices at astronomical highs in many major U.S. cities, and traditional homeownership prohibitively expensive for many young adults, co-buying is an increasingly attractive option.
Thanks to co-buying, we’re starting to see some of the headlines turn much more positive. Now, we are seeing stories published that are more along the lines of “Millennials Team Up to Fulfill the Dream of Homeownership,” like in the Wall Street Journal. And hopefully it is only the beginning of making more millennials’ dreams come true.
