Tag Archives: millennials

Why do Millennials Think They Have to Win the Lottery in Order to Own a Home?

15 Monday May 2023

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Millennials may believe they are unable to afford a home due to a number of factors. Here are a few reasons:

  1. High housing prices: In many parts of the world, housing prices have risen significantly in recent years, making it difficult for many people, including Millennials, to afford a home. This can be especially true in urban areas where the cost of living is high.
  2. Student loan debt: Many Millennials have taken out large student loans to finance their education. This can make it more difficult to save up for a down payment on a home or to qualify for a mortgage.
  3. Stagnant wages: Despite the cost of living rising, wages have remained relatively stagnant. This can make it challenging to save enough money for a down payment on a home, as well as meet the other financial requirements of owning a home.
  4. Lack of job security: Many Millennials have faced job instability in the current job market. This can make it difficult to plan for the long-term financial commitment of owning a home.
  5. Increased financial responsibilities: Millennials may also be facing other financial responsibilities, such as caring for aging parents or raising children. These responsibilities can make it harder to save for a home.

A recent poll found that 52% of Gen Z and 57% of Millennials feel like they’d need to hit the jackpot in order to buy a home. Yet a third of both those generations owned a house before they even hit 25-years old! 

It’s not easy for most people to buy a house, let alone when you’re on the younger side. But it can be done, even when the market is highly competitive and conditions aren’t ideal. And even if you’re not able to buy a house before you’re 25, don’t think that you’ll never be able to. 

Winning the lottery would be great and certainly help, but the real secret to buying a home is having the desire to make it a reality: Focusing on what you need to do to get there, and putting in the time and effort it takes.

No matter your generation, we are here to help! Kevin and Jennifer Hanley, REALTORS, SRES, Luxury The Hanley Home Team of Keller Williams Realty 904-515-2479 HanleyHomeTeam.com

Buying a House Is “In the Bag” for Millennials and Gen Z

23 Monday Jan 2023

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Many members of the Millennial and Gen Z generations would love to buy a house of their own. But according to this CNBC article, they simply can’t afford to do so.

Not only can they not afford to buy a house, many are moving back in with their parents, as Forbes recently reported, due to inflation, low-paying jobs, college debt, high rents, and the general monthly costs of living on your own. Given the current economy, it’s a smart, sensible move to stash away some cash and pay off their debts, even if it isn’t where they’d like to be at this point in their lives.

None of that is all that surprising, since it’s been all over the news for quite a while now. 

But what might be surprising is how some of them are spending the money they’re saving by living with family, considering they’d like to buy a house.

Living a life of luxury…

A new report from Morgan Stanley revealed that 29 percent of Millennials and Gen Z are putting off buying a house in order to pay off their debts and achieve financial security. However, many of them are using the money they’re saving by living with family to purchase high-end watches, purses, jewelry, and other luxury items.

Considering they’re living at home at a time in life when past generations had already bought (or at least rented) their own place, you can’t blame them for wanting to splurge a bit. Who hasn’tdone a little retail therapy to make life seem better? 

But then you also can’t blame the cost of living, mortgage rates, and high house prices entirelyon why they aren’t able to buy a house…

In fact, many Millennials and Gen Z are buying houses! According to the National Association of REALTORS® 2021 Home Buyers and Sellers Generational Trends report, Millennials and Gen Z combined are 39% of the homebuyers during that period!

Follow the lead of the 39%…

So, it isn’t by any means impossible for people in the younger generations to buy a house. But, it probably means that the ones who do purchase a home are making a concerted effort to pay down their debts, save money where they can for a down payment, and spend it on a home of their own, rather than high-end luxury items.

For years, it’s been a running joke that Millennials could afford a house if they’d just stop spending money on avocado toast, which they rightfully scoffed at as an over-simplified solution. Saving a few bucks a day is obviously a drop in the bucket it takes to fill with a down payment. (Then again, habits and little savings all add up!) 

But when you start talking about buying a trendy purse, watch, or any other luxury item, it starts getting hard to defend. You can’t do that and then claim that it’s the economy, mortgage rates, or high home prices that are getting in the way of buying a house—especially when so many others in the age bracket are managing to do so.

So, if you’re in the Millennial or Gen Z generation and want to buy a home—but currently have to live with family just to make ends meet—don’t feel like it’ll never happen for you. 

Just be thoughtful about the money you’re able to save by living with family. Every month, pay down your debts, put some aside for a down payment on a house, and forgo buying expensive handbags (or other such items), and buying a home will be in the bag for you!

The Takeaway:

Many members of the Millennial and Gen Z generations would love to buy a house, but simply can’t afford to do so. Many of them have actually moved back home with their families due to inflation, low-paying jobs, college debt, high rents, and the general monthly costs of living on your own.

However, those two generations comprised 39% of the home buyers in 2021, so it’s obviously not impossible for the younger generation to afford a home. 

What sets those who do buy a house, and those who feel that it is entirely out of reach, may boil down to how they spend their disposable income. A recent report from Morgan Stanley revealed that many of those generations are using the money they save by living back home to purchase luxury items, rather than save the money.

If you’re in the Millennial or Gen Z generation, know that it’s possible to afford a home, but that you need to be thoughtful about how you save money, and what you spend those savings on.

Need some guidance? Get in touch today! Kevin and Jennifer Hanley, REALTORs The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside 904-515-2479 HanleyHomeTeam.com

Don’t Give Up on Buying a Home if You’re a Millennial Renter

27 Tuesday Sep 2022

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Almost 25% of Millennials (ages 26-41) claim they plan on renting forever according to this Apartment List article. That’s nearly double the amount since they started their ongoing survey of 31,000 Millennials in 2018.

In the grand scheme of things, 1 in 4 Millennials swearing off homeownership forever isn’t earth-shattering news. To put things in perspective, the highest rate of homeownership ever was 80% in North Dakota back in 1900. But generally speaking, the homeownership rate has hovered in the 65% range nationally for almost 5 decades. Some people will always be renters; homeownership isn’t for everyone. 

There are four main reasons they give for not buying:

  • They feel it’s financially risky (19%)
  • Don’t want the costs of maintaining a home (30%)
  • They like the flexibility renting allows (28%)
  • Can’t afford to buy a house (77%)

Obviously, by far the biggest reason is affordability. It’d be easy to chalk that up to the recent surge in home prices and rising interest rates. It’s legitimate and true. But that’s also been the main reason since well before the current market conditions. Truthfully, affordability is almost always the reason renters give for not buying, regardless of the decade. It’s never an easy financial leap to take.

However, while renting may feel like the easier, more affordable option, over time it’s not. In fact, renting is getting even more expensive. According to this Fortune article, an increasing amount of older adults are struggling to be able to pay rent. They’re constantly in fear of rent hikes that may just get to a point they can’t afford to pay. Then what?

While it’s never an easy financial leap to take, once you take the leap, your housing cost can be kept stable for years to come, and even go down as you pay off your house. Sure, it won’t be easy up front, but think of how it’ll be for you a couple of decades from now. Would you rather have an asset you can sell, or still be paying a landlord an ever-increasing amount of rent with nothing to show for it? 

Sure, prices and rates may seem high right now, but it almost always feels that way relative to the times. There’s always an area and a house you can afford to buy a house in, if you’re qualified for a mortgage. (And if you’re not, it’s worth making an effort to be qualified!) Your first house may not be everything you want or where you ideally would like to live, but it’s a first step toward taking control of being able to afford to live comfortably as you get older. It may seem years away right now, but time has a way of creeping up on you. And the cost of living does, too… 

The Takeaway:

Considering the financial burdens many Millennials have, coupled with rising interest rates and home prices, it’s no surprise that an increasing number of Millennials are saying they’ll never buy a home and remain renters forever. 

But if you can afford to rent, the chances are you can afford to buy. It might not be your dream home, or in the exact neighborhood you’d prefer, but you can buy something. Buy where (and what) you can afford now, so that you have a predictable and controllable cost of living — as well as an asset you can sell — as you grow older.

Let’s discuss your real estate goals. Jennifer Hanley, REALTOR The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside 904-515-2700 HanleyHomeTeam.com

Can’t Afford a Home? Co-buying Skyrockets

12 Friday Nov 2021

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OCTOBER 13, 2021

More roommates are committing to long-term relationships and co-buying a home. ATTOM says the number of co-buyers with different last names surged 771% in six years.

SAN FRANCISCO – Millennials are pooling finances with roommates, friends and significant others to buy a home together.

The number of home and condo sales by co-buyers is increasing, according to research from ATTOM Data Solutions. The number of co-buyers with different last names surged by a whopping 771% between 2014 and 2021.

The trend especially took off during the pandemic. From April to June 2020, 11% of buyers purchased as an unmarried couple and 3% as “other” (e.g., roommates), according to data from the National Association of Realtors® (NAR). That’s up from 9% and 2%, respectively, in 2019.

“During the pandemic, people have been renting and they may have wanted more space, and so they looked at, perhaps, their roommate and decided, ‘Let’s go buy a home together,” Jessica Lautz, vice president of demographics and behavioral insights for NAR, told The Wall Street Journal.

But affording a home isn’t easy for a first-time buyer. The median existing-home price for all housing types was $356,700 in August, up nearly 15% from a year earlier.

Besides the higher costs to buy, student loan debt increasingly burdens young adults, hampering their ability to afford a home. Half of the potential homebuyers surveyed this year say they haven’t bought yet because of student debt, according to a report by NAR and Morning Consult. Millennials are the most likely to point to student debt as a top reason for delaying homeownership.

Those with student loan debt are still finding ways to buy, though. In addition to co-buying, for example, they may apply for a mortgage with a co-signer such as a family member to help improve their credit status.

Source: “Millennials Team Up to Fulfill the Dream of Homeownership,” The Wall Street Journal (Oct. 11, 2021) [Log-in required.]

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The Most Popular Interior and Exterior Home Styles by Generation

27 Friday Aug 2021

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Different people want different things in their homes—and that includes people of different ages. The perfect home style for a first-time Gen Z home buyer might not speak to a Baby Boomer looking to buy a home to retire in (and vice versa).

So what, exactly, are the most popular home style choices for each generation?

A recent survey from Buildhome asked potential buyers across four generations—Gen Z, Millennials, Generation X, and Baby Boomers—what type of home style they prefer between five different interior and exterior styles. For exterior options, respondents were able to choose from Modern Farmhouse, Cottage, Craftsman, Victorian, and Contemporary or Industrial Modern. For interior options, the options were Rustic Modern, Traditional, Modern, Zen, and Japandi (a style that combines elements of Scandinavian and Japanese design).

Gen Z, Millennials, and Generation X were all in agreement on their preferred interior and exterior styles: Rustic Modern and Modern Farmhouse. Baby Boomers, on the other hand, preferred a Cottage style for the exterior of their homes and Japandi for the interior.

What’s your home style? Get in touch and let’s find it! Kevin and Jennifer Hanley, REALTORS The Hanley Home Team of Keller Williams Realty Atlantic Partners Southside 904-515-2479 http://www.HanleyHomeTeam.com

Rent vs Buy – Now vs Later

15 Thursday Jun 2017

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Front-2If affordability is a concern and you are unsure were you’d like to live in the near future, you may find this article on the hidden long-term cost of renting compelling.  It’s called “The $700,000+ mistake nearly 6 in 10 millennials may make.” You can check out the article here:

http://www.marketwatch.com/story/the-700000-mistake-nearly-6-in-10-millennials-may-make-2015-01-22

Renting in the short-term may be your best option, but waiting to buy can have a high cost. For example: “At current rates of appreciation, in 10 years the average home (now priced at $190,000) would be selling for about $249,000. If interest rates return to their historical norm (from over the past 15 years) of 5.6%, a monthly house payment (including mortgage, taxes and insurance) on a $249,000 home would be $1,574 a month, a 52% increase over the $1,037 house payment for a median priced home now.”

If you ever have any questions about home ownership, we are more than happy to help you plan for your future. Kevin and Jennifer Hanley, REALTORS TheHanleyHomeTeam.com 904-515-2479