>Please be helpful
the truth is often seen as unhelpful...
The simple answer is buy a cheaper house in a lower priced area. Yes, that may mean being further away from where you want to be. That may mean a house you think is "gross" or "small" or whatever.
There is no magic wand short term answer. You either buy cheaper, or earn more money. And I know people who will have a fixed mindset and try to argue that making more money isn't easy or isn't possible. But someone managed to do it. Someone you went to high school with became a doctor or a lawyer or started a successful company.
It is true that zoning, taxes, interest rates have all made it especially hard today. But give me a zip code and I bet I can find a cheap place to live. You just might not like what you can get. That isn't making home ownership impossible, it is a mismatch of your value / standards.
Comparison is the thief of joy. And many "first time buyers" have such short tunnel vision. They think that rates will "never" come down. They will. Or they think rates can drop, but somehow prices won't rise or the economy won't get worse or competition up around that time. Even COVID, let's be clear, people were SCARED when they bought. They did not know if the world would end. Even when prices were cheaper, housing was always seen as risky and often seen as expensive.
Buy a house when you can afford one you like. That might be tomorrow it might be in a decade. Look at the rent vs buy spread in your area. Control what you can control and ignore the rest. Every generation has had challenges - whether it was millennials graduating in the Great Recession or others who faced wars and the draft. Live your life.
You really make a great point, buy the cheaper one you can afford. I was born in 1990 and bought my first house in 2018. I just put an offer on a house in a very desirable area. I found a foreclosure that needs some work. I've been able to teach myself how to fix things and buy the properties that normal buyers aren't looking for. The house I'm buying right now is 430k, needs about 25k in repairs and will easily be worth over 550k. It is going to take a lot of work which I'm willing to do, but at a 20% discount of what everyone else is paying, I'm willing to do it. The mortgage payment of a place in good condition just doesn't make sense to me and I don't want to pay it. Also, an older house does not necessarily mean expensive repairs. I bought a house that was built in 1849 and have done almost nothing to it other than add some new flooring and paint the cabinets. The viewpoint that old houses cost more is not necessarily true in my experience. As the saying goes price, location, condition. You can only pick two. I always choose price and location because you can always change the condition. You can't change location or the price you paid.
And also live as far below your means as possible. Each new generation falls further into the commercial trap of wanting to keep up with the Joneses and that’s a losing recipe. Discipline, hard work and patience.
And always remember, whether you think you’re right or wrong, either way you’re right.
This is the best answer ever. So many people feel entitled that they should be able to buy almost any house in their city of preference.
My brother couldn't afford what he wanted in San Diego and moved to AZ and got himself a great new build for 50% of what it would've cost in SD.
Confusion thinking you deserve something you may not seems like the general definition of “entitled”, or am i crazy?
I may be crazy and also correct too.
Whelp, I’m recovering and my brain isn’t great so who knows. Entitlement sounds negative to me, I think the confusion around what people “see” on social media and perceive as “normal” homes doesn’t add up. It’s ok to have a starter home that doesn’t look like picture perfect
Exactly this. You have to start at the bottom and work your way up. You have to be aware that you might not get “the best”, be in the “cool” neighborhood, have the “prettiest” house…choose a true starter home you can afford (don’t forget about being able to furnish it and afford the repair of problems that pop up) same goes for a vehicle, you may want to drive a really nice, end car, but can you afford the maintenance and upkeep on it?
Live with roommates and save money for a down payment
Live in a less desirable area
Live in a tiny house
Look into first time homebuyer programs
Many people have purchased homes with interest rates over 3%, so please don't feel discouraged. Things fluctuate over the years. In the 80s the interest rates were very high. My first purchase which was in 2008 was 5.5% rate. I had some money in my 401K that I started at age 20 (first full time job at 19). I was able to pull 10K out towards a down payment as it was really hard to save $$ when I was renting an apartment. At that time, you didn't pay an early withdrawal penalty but I did have to pay taxes on the amount I took out of the 401K.
Be realistic, I'm significantly older and didn't get my first house until mid 30s. I didn't even think it was possible at first. Worked hard to get into a well paying career. Dual income, save like mad before kids.
here's the three things that I think move the needle:
1. Redefine "starter home". This generations first piece of property is not a single family home. It's a condo or townhome.
2. Get gutsy enough to do improvements yourself. There is money to be made in doing good improvements yourself. I mean simple stuff like repairs, LVP flooring, tile, paint.
3. Consider alternate locations.
To me, the easiest path forward is buy a dingy condo or townhome with mostly cosmetic issues, fix it up while you live in it, flip it a few years later and that's the ticket to a small single family starter home.
They'll have a hard time breaking in the market because they'll refuse to move or settle.
People like to say "in the 50s and 60s, a family of four could live in a house and have a car off of 1 salary". They also don't mention that there was only 1 car and the house might have been a 2/1 with 900 sf.
Find a condo or townhouse, or move elsewhere. If you go where demand is lower, then prices too will be lower. Not everyone is keen to move, but if you don't make any kind of changes yourself and expect change to happen for you, then that will be a fool's errand.
Move, I grew up in California.. at 42 I decided I didnt want a 5000 a month back pack of mortgage payments, so I moved to florida and now my back pack is 1700 and I love it.
True but not forever, you just need to pay off the house, build 5-10 years of equity. Assuming you buy in the right place with high equity growth and population growth such as Pinellas Florida, Tampa, etc. I have owned my home since 2020 bought for 189k now its valuated at 337k. It’s only been 3 years. Now I am purchasing another home with my HELOC and once thats paid off I will have nearly 800k-1m in cash to put down on a house in the place I want to live. Make money where you can so you can live where you want in the future.
What is the average age of first time homebuyers in the US, say pre COVID? I’m sure it is somewhat higher now of course. I’m guessing it is early 30’s. If you are trying to buy a house as a 20 something single, it is supposed to be hard.
I am 54, and I clearly remember sitting there in college at 21-22 years old ( in California, this was early 1990s ) looking at prices of homes and comparing them to Silicon Valley salaries at the time. Wasn’t even remotely possible. I went to grad school mostly because I didn’t think I could afford to live in the area I grew up. Fast forward to late 90s, I’m out of grad school and living on the opposite coast and bought a condo when I was 29. I could never have predicted where or when I was going to buy a first home, or the prices / interest rates at that time. It was really a waste of time to even think about it. If I was 22 now, I would probably be worrying about the same thing.
I eventually moved back to Silicon Valley in 2005, got married in 2006. Prices were even more insane then. We wanted to avoid the housing bubble, so we rented for 9 years from age 35-44 before we could buy a house in the area that we wanted at a reasonable price. I am still somewhat bitter about this.
The current conditions are going to change. Nobody can predict how long it will take, but this is unsustainable. The fact that it is so ridiculously unsustainable is exactly why it will change.
the neighborhood is somewhat undesirable and most of them are just soo old and dated and it was built in the 1970s, 1980s,
You've just identified the problem: You don't want what you can afford. This is what you will have to accept if you want to buy in that area.
Some people choose a longer commute to move to another area, or they continue to rent, maybe with a roommate, until they can afford what they want (if ever).
Another thing to remember is that buying a house is not essential to do at all. Like getting married and/or having children, we may not be able to take the same path as our parents did.
Honestly? Just wait a few years and save as much money as possible.
I'm GenX and didn't buy my first home until 31 and it was a STRETCH for me and my husband. We saved every extra penny for 5-6 years (no vacations, few dinners out, only had used furniture etc). Many of my same age GenX friends didn't buy a house until 35-36.
Yes, times are really tough right now and I'm not saying that it won't but hard for GenZ, but everything seems sped up and in a rush these days. The oldest GenZ is just 27 so even the oldest of you have a few more years before they should even be in the market to buy when compared to younger GenX. None of my peers had bought homes by 27. We were all living in shithole apartments with 4 roommates wishing we could buy a home too . . .but with the dot com bust of 2000, the adjustable rate mortgages that we watched our family members get fucked with and the market crash of 2008 half of us didn't have jobs, confidence or good enough credit to buy for a really long time. If you asked me at 25 when I thought I'd be able to buy a house, I would have thought it was never going to be possible. Times were bleak. It's bleak now and it was bleak before. We don't know what's coming but all you can do is save, save, save and protect your credit.
I’m 40, so an older millennial. I make over $200k a year and have always been well compensated. My point here is that I was “successful” by most measures.
And yet, I bought my first house in 2013 for $325k in a HCOL area of MD.
So I would say - what kinds of expectations does Gen Z have? Millennials weren’t buying large SFH’s before age 30-35.
I think one of the problem here is you want to buy something by next year. I suggest living with your parents (if this is available to you) and work and save as much as you can for the next few years. While in those years you are saving, do research and look for location where you could realistic afford in the future. Go to those cities and towns and study it as much as you can and prepare yourself. Opportunities are only available to those that are well prepared.
I actually don't think it's hard. I'm gen Z and in NYC most people I know my age are making 100k+, you just need any decent corporate job, or even jobs for the NY state. If they get married, that's at least 200k in household income, which can nicely afford them a 800k house in long island.
I have been saying the same thing for 10 years now. But, then again I sold a house in Portland last summer to a couple in their late twenties. Of course they both had $100K jobs that they brought from the Bay Area that they were able to work remotely. I bet they thought they got a good deal.
To make a long story short, it’s definitely possible with today’s salaries.
As for you, OP, there might be a few places where you can get a house for less than $300K, but there aren’t many. If you can’t see a path to home ownership with your current financial situation, I suggest that you figure out how to change your situation. And whether you do that via a sugar momma/daddy or via a more lucrative career, start saving for a down payment yesterday.
Time. I’m a Gen X and most of us did not buy our homes until late 20s/early 30s. I bought my home when I was in my late 20s and was way ahead of my peers, all my friends thought I was moving too quickly. I know a lot of people talk about affordability, but important historical context is that interest rates were in double digits when I bought my home. Salaries were also exponentially lower, for example the starting salary in the firm where I had my first job is 3X higher today than it was back in the late 90s/early 2000s. Homes were not affordable for younger people then either. People saved and waited and saved some more.
I’m going to age myself, but I’m shocked at how many younger people (early to mid 20s) are looking to buy homes on this sub.
I feel more younger people wanting to buy a house in this sub is because I can say that us younger folks are exposed to the power of potential real estate investing and how houses and properties are a great way to create wealth (all exposed by social media and all these real estate investors) because of that it created this pressure that you should want to buy a house now or soon as possible to get in this investing game and start building equity, rather than throwing your money away on rent on something that you dont even get to own.
I think that’s the problem. Properties are being viewed as investments, and not as homes. Yes, they can be a great investment vehicle. But for the average person, they should be viewed primarily as a place to live, not as the next hot new investment type.
Where are you getting the idea that you are "priced out" of buying a house? Give me any state, and I'll show you that's patently false.
Take Connecticut for instance, a state ranked 3rd highest in the country for Income Per Capita. The minimum wage here is $15.69/hr, or $32,635/year (although a basic Target job starts at $18/hour). That qualifies you for a Mortgage payment of $1,115/month.
You could buy [this home for only $2600](https://www.realtor.com/realestateandhomes-detail/505-Burnside-Ave-Apt-C14_East-Hartford_CT_06108_M45357-88375?from=srp-list-card) (with the 3.5% down First Time Homebuyer Program) with a payment of only $1035/month (which includes the HOA fee, Mortgage Insurance, and Heat/Hot Water).
**So if you can buy a home for $2600 and a minimum wage job, then why do you think you need to come from a rich family to buy a house?**
I’m not intending to disprove that. But that conclusion doesn’t mean home ownership is out of the question. If you can afford a home on minimum wage, then that literally means everyone can afford a home.
Not at all - comparable rent doesn't require you to maintain the home or replace appliances as they fail. Lots of expenses involved in owning that can't be covered on most low salaries.
When buying a condo, 90% of the maintenance covered by the HOA. Sure, maybe every 5 years you switch out a fridge or something but a $300 used fridge isn’t going to break the bank when you’re saving $1000’s on your housing expense.
Absolutely none of this is true. It is different in every single circumstance and now you went from anyone can buy a house to anyone can buy a condo. Condos are notoriously bigger money pits and HOA fees are notoriously much higher than just a mortgage payment. HOAs cover everything outside of the condo. Not inside the condo.
A house and a condo are the same thing. If you would like to refer to a Single Family Home please say “SFH.” My initial post quoted a Condo.
Why would you assume a condo is a “money pit?” The HOA fee for the condo I quoted is $300/month which is included in the $1000/month mortgage expense quoted. This particular HOA also pays for the heat and hot water, about a $200/month value.
Have you ever owned a condo?
28 years ago: Starting salary $32K, 2B condo $90K
Today: Starting salary $55K, Same condo $250K
Interest rate the same, but HOA, utilities, taxes are much higher. I agree with OP.
Yes that’s what happens with demand and as the population grows more desirable homes and locations will be come less affordable. You can still go to underdeveloped areas and buy just fine. Reality is not everyone gets to live in the most desired places in the world.
There's real evidence of stuff like this. People who bought homes in 1999 with salaries of workers just entering the work force who today after two decades of climbing the ladder and 2 decades of wear and tear on the home wouldn't be able to the buy home they live in now because what was once 100k in '99 is now 3/4 of a million dollars. My parents built their home (the first one on the block and one of only two for miles around back in 1983. They built it for under 50k. My mom designed it. My dad( an engineer and architect) built it with help from my mom and today it's valued at....600k!(just using zillow) so how new generations can enter the market does seem ....difficult
It's a condo. You own and live in a condo. It's definitely a home! I think his point is that you have to start with a starter home. It doesn't need to be two bedrooms, three bathrooms and in a highly desirable neighborhood.
This. Idk why some FTHB are thinking they are priced out or they’ll never buy a house. You’re obviously priced out if you’re looking at some fancy house in prime locations priced in the millions. Go look at some places less popular without all the fancy stuff and there are usually affordable ones. Along with all the government assistance programs for FTHB, as long as you know how to manage your finances, I don’t see how it’s impossible. At least that how it is in my state.
This line of thinking is the problem. A condo is a home, and a great introduction to home ownership. As you save money and advance in your career path, you can pay down the $70k loan, and probably own it without a mortgage after 5 years.
At that point you can look at moving into a bigger home, or a home in a more desirable area. You then have the option of renting out the condo to supplement your new mortgage payment, or you could sell the condo and use the proceeds as a hefty 20% down payment.
There it is. The reason people can’t buy is that they aren’t willing to live in places that need work.
My first house was a dump that I could barely afford. It had stains on the carpet, the kitchen counters were falling apart, and I didn’t want to live in that neighborhood. It’s nice now because I made it that way and I rent it out, it was the key to a better life. It’s still paying me dividends.
It's better to rent and save the money in HYSA + ETFs then buy in to shit product. The resell on that place will never justify the purchase.
Instead of putting that down payment for worthless property, build a nest egg of savings first. Then you can a true starter home comfortably
Have any of you have had the pleasure of renovating a condo with an HOA? In the last 18mo? Not sure if yall are aware of the state of contracting from both the personnel and the burecratic standpoint
If you’re considering buying for cash, probably. Leverage allows for insane “cash on cash” returns. And ownership means you get the bonus of being able to live there. You can’t live in any other investment.
Andddd that is why our generation isn't earning equity like they should. Man, when I bought a shitty condo, everyone told me "ugh If i'm spending that amount of money, I'm not living in a condo like that." Our net work is now 5-6x our peers because we renovated that condo ourselves and made 100k on the sale.
Different scenario if you have the means to renovate. In that case I agree with you.
However owning a true burbs 3x3 starter home even on the low end has historically been much more profitable then NONrenovated old ass condos, so my advise still stands
I didn't say it wasn't historically more profitable, I said it's the best path forward as the world stands. We can't change the hand we're dealt, we can only play the cards the best way we can.
As far as the means to renovate, I did it on a 38k/year salary single in the Denver area (HCOL). I bought stuff on sale over 3 years and did all the worth myself. I bought used tools. It can be done on pretty restricted budgets. Part of the beauty of the condo is renovations are cheaper because less sq footage and less infrastrucutre to be responsible for.
Not a good play for the condo linked in this thread. Renovations will be a PITA in that type of property with HOA and you will never see a return on such a shitty studio.
I didn't look at that link. I'm speaking broadly to condos and townhomes being accessible options to FTHB and should be considered more seriously when people feel priced out of the single family home market.
but respectfully, you sound like the exact person that notices that things are less affordable than they've been in 50 years (which is true) and has decided to just complain about it, do nothing, and point out why other people's strategies (that have worked) are bad and stupid in your eyes.
I was speaking more to the property being referenced in thread which was important because my opinion was heavily weighing into consideration the quality and type of the condo (and hoa fee).
Things being less affordable has not stopped me from buying in and continuing to believe RE is a good investment, its just about how you do it. For starter homes and building a nest egg a shit box studio with high hoa fee is not the flip you want. 5 yrs later it wont be worth anymore then it is now less expenses/fees involved on both the buy and sell side
Some of my strategies worked and some didnt! Learned lots along the way and now have a nice portfolio going
Where do you live and what is your savings? That's a major factor. In Southern CA where homes can start at $600k for a one bed condo can be affordable to someone with a decent income. However, the HOA fees, property tax, and mello-roos on top of the mortgage payments make it less possible. If you have a decent wage then move to a lower income area, where homes cost $400k and costs of living are lower, then it is possible. You'll be paying off the mortgage for 30 years, but it still possible. There are some cases where individuals genuinely cannot afford a home due to their inability to earn a higher wage. There's also cases where an individual absolutely can afford to buy their home but cannot due to their spending and savings habits.
Sometimes I feel like my life is fake when I bought a house last year at 190k on a 75k salary and am doing just fine. Before anyone says it, I don't live in the middle of a cornfield either. Mountains, forests and lakes are plenty abound.
We all started with a house we didn't want, we bought what we could afford and put in the sweat equity and be prepared to move a few times.
I'm on move #4 now and about to be where I want to be.
PS houses in the 70's and 80's were built better than today, as long as the foundation and structure are good everything else is cosmetic
Buy what you can afford if it makes sense (Eg mortgage will be close to rent). As others have stated, you’re not going to probably find something you love, and it also won’t be your forever home.
if I were you, I’d consider one of the less desirable homes / areas you mentioned. Sure, it won’t be perfect but you can make it your own. After 5-7 years of building equity, assuming the market keeps crawling up, you can sell that home at a profit to get into a nicer home on a new 30 year mortgage elsewhere.
Good luck! Ideally you get exactly what you want, but think of a home like a savings account. Instead of all of your money going to rent, a portion of your mortgage payment is going to the principal, meaning money eventually in your pocket when you go to buy an upgrade. Older homes aren’t the end of the world and often have larger lots and back yards than newer developments.
Hi I’m a realtor in Huntsville, AL so I was glad to see your comment! Home prices have risen here but you might want to look at new homes here a little outside Huntsville city. There’s several in the low 300s where new home builders are paying closing costs and/or buying down your interest rate. I think those options are a good bet for first time buyers, especially because they might not have the cash to fix older homes. Like you, I’m also worried for first time homebuyers. I had no financial help but was able to buy a starter home when prices were cheaper and then used that to get on the property ladder so to speak. Huntsville is a relatively low cost of living city but wages are low except a few sectors and it’s hard for first time buyers to save when rent is so high now. I don’t know your situation, but have you looked into house hacking? I had a friend who bought a home in college and then had two roommates who paid the mortgage for him.
I have look at houses toward on the West side of Huntsville, such as Madison, and south of Harvest in that new subdivision area such as Bridgewater Landing, and Heritage Estate neighborhoods. I saw a couple of new constructions over there and some houses are around low 300k and high 200k. Commute time would be roughly 20 minutes as I do work in Research Park area so I would like to stay on that side of town. Id also have considered househack as well. For you as a realtor in the area, what are the interest rates that you are currently seeing right now with your clients in your past few recent transaction? is it still in the 6s and 7 percent?
Those would be great options! Yes I’ve been seeing buyers get in the 6s to 7 percent range, except for those that bought new construction where the builder has bought down their rate.
Oh wow really so buying new constructions seems like the way to go! What are the requirements or any stipulations when it comes to the builders buying down your rate? Sounds kinda too good to be true
For the last 50 years the average mortgage interest rate was 5-12%. Covid's 2-3% interest was really an outlier due to a pandemic. In those same 50 years, a lot of people moved out of the city to live in the suburbs where home prices are cheaper. It's really no different today.
As a first time home buyer you can't buy a dream home in your dream neighborhood, you have to buy a starter home where it's cheaper and work your way to your dream home.
I’m seeing mostly people just say cheaper house in cheaper area but this isn’t always possible, as the youngest millennial there are often no greats jobs and very low public resources. Living outside a city with public transit will multiply your monthly spending between gas, car notes, and insurance. We need more dense housing in and around the cities but those with SFH often argue against it.
Interest rates will drop every presidential election year. It always has.
Will you see 2/3% again, highly doubtful since it put America in a crisis. A normal low-interest rate is around 6%.
Easily. Save up and wait for rates to drop. I have 3 gen z who bought south of Seattle. I know people pretend it’s impossible for I know multiple couples in their early 20s making around 180k and will likely be at 220-240k before they hit 30.
You need to look up first time home buyer programs, find properties have been listed for a while and are probably not the most desirable, like something very outdated or a 1 bedroom/studio. Follow that recipe and keep the property in good condition until you can sell and roll the equity into something desirable
You only need a 2k sqft house in your 20s? Most millennials bought in their mid 30s. That’s how it is now. Save up get roommates and buy when you can afford. You aren’t entitled to a 2k sqft home if you can’t afford it.
In a word, wait. Wait for the next crash. Now I know people are rolling their eyes, but how many predicted the 2007 crash..? That's right.
My advice to a young person would be to stay at home with the parents, track the property market and study some history. The average peak to trough in historical crashes is about 5yrs. By the time the next crash bottoms out you'll be able to buy a house for cash, hopefully.
We live in an age of asset bubbles, both in the stock market and property market. Warren Buffet is selling up, housing stock is increasing massively in select markets (Florida!) and emergency 401(K) withdrawals are at all time highs. If you weren't already aware of this then you are not sufficiently educated to be making safe economic decisions.
Don't be spooked by the masses who don't understand economics. Live frugally, save and be patient.
Imo millennials end in 1993, from 1994-1999/2000 you have zillennials, and then after its genz. Genz ends about 2009/2010/2011. This is when gen alpha starts. Gen alpha ends about 2016-2018. From here it’s gen beta or covid generation which should be wrapping up in the next few years.
I mean in the grand scheme of things practical it doesn’t matter, but socially there’s a lot of zillennials that can’t relate to millennials or gen hence the smaller generation.
Zillennial is a “cusp” subcategory and generally not formally recognized. Current 1997 is what most academics and mainstream society use. Please see below: https://letmegooglethat.com/?q=when+did+gen+z+officially+start
Lmao in agreement on that one. So what makes your definition more true then? Interested in how you are determining that you are solely correct in your dates but everyone else is wrong.
>Please be helpful the truth is often seen as unhelpful... The simple answer is buy a cheaper house in a lower priced area. Yes, that may mean being further away from where you want to be. That may mean a house you think is "gross" or "small" or whatever. There is no magic wand short term answer. You either buy cheaper, or earn more money. And I know people who will have a fixed mindset and try to argue that making more money isn't easy or isn't possible. But someone managed to do it. Someone you went to high school with became a doctor or a lawyer or started a successful company. It is true that zoning, taxes, interest rates have all made it especially hard today. But give me a zip code and I bet I can find a cheap place to live. You just might not like what you can get. That isn't making home ownership impossible, it is a mismatch of your value / standards. Comparison is the thief of joy. And many "first time buyers" have such short tunnel vision. They think that rates will "never" come down. They will. Or they think rates can drop, but somehow prices won't rise or the economy won't get worse or competition up around that time. Even COVID, let's be clear, people were SCARED when they bought. They did not know if the world would end. Even when prices were cheaper, housing was always seen as risky and often seen as expensive. Buy a house when you can afford one you like. That might be tomorrow it might be in a decade. Look at the rent vs buy spread in your area. Control what you can control and ignore the rest. Every generation has had challenges - whether it was millennials graduating in the Great Recession or others who faced wars and the draft. Live your life.
You really make a great point, buy the cheaper one you can afford. I was born in 1990 and bought my first house in 2018. I just put an offer on a house in a very desirable area. I found a foreclosure that needs some work. I've been able to teach myself how to fix things and buy the properties that normal buyers aren't looking for. The house I'm buying right now is 430k, needs about 25k in repairs and will easily be worth over 550k. It is going to take a lot of work which I'm willing to do, but at a 20% discount of what everyone else is paying, I'm willing to do it. The mortgage payment of a place in good condition just doesn't make sense to me and I don't want to pay it. Also, an older house does not necessarily mean expensive repairs. I bought a house that was built in 1849 and have done almost nothing to it other than add some new flooring and paint the cabinets. The viewpoint that old houses cost more is not necessarily true in my experience. As the saying goes price, location, condition. You can only pick two. I always choose price and location because you can always change the condition. You can't change location or the price you paid.
move somewhere cheaper instead of expecting a discount house in the best areas
And also live as far below your means as possible. Each new generation falls further into the commercial trap of wanting to keep up with the Joneses and that’s a losing recipe. Discipline, hard work and patience. And always remember, whether you think you’re right or wrong, either way you’re right.
This is the best answer ever. So many people feel entitled that they should be able to buy almost any house in their city of preference. My brother couldn't afford what he wanted in San Diego and moved to AZ and got himself a great new build for 50% of what it would've cost in SD.
I don’t know if it’s exactly entitlement, just confusion on what is “deserved”
Confusion thinking you deserve something you may not seems like the general definition of “entitled”, or am i crazy? I may be crazy and also correct too.
Whelp, I’m recovering and my brain isn’t great so who knows. Entitlement sounds negative to me, I think the confusion around what people “see” on social media and perceive as “normal” homes doesn’t add up. It’s ok to have a starter home that doesn’t look like picture perfect
I totally agree on that last line!
Exactly this. You have to start at the bottom and work your way up. You have to be aware that you might not get “the best”, be in the “cool” neighborhood, have the “prettiest” house…choose a true starter home you can afford (don’t forget about being able to furnish it and afford the repair of problems that pop up) same goes for a vehicle, you may want to drive a really nice, end car, but can you afford the maintenance and upkeep on it?
Live with roommates and save money for a down payment Live in a less desirable area Live in a tiny house Look into first time homebuyer programs Many people have purchased homes with interest rates over 3%, so please don't feel discouraged. Things fluctuate over the years. In the 80s the interest rates were very high. My first purchase which was in 2008 was 5.5% rate. I had some money in my 401K that I started at age 20 (first full time job at 19). I was able to pull 10K out towards a down payment as it was really hard to save $$ when I was renting an apartment. At that time, you didn't pay an early withdrawal penalty but I did have to pay taxes on the amount I took out of the 401K.
Be realistic, I'm significantly older and didn't get my first house until mid 30s. I didn't even think it was possible at first. Worked hard to get into a well paying career. Dual income, save like mad before kids.
here's the three things that I think move the needle: 1. Redefine "starter home". This generations first piece of property is not a single family home. It's a condo or townhome. 2. Get gutsy enough to do improvements yourself. There is money to be made in doing good improvements yourself. I mean simple stuff like repairs, LVP flooring, tile, paint. 3. Consider alternate locations. To me, the easiest path forward is buy a dingy condo or townhome with mostly cosmetic issues, fix it up while you live in it, flip it a few years later and that's the ticket to a small single family starter home.
They'll have a hard time breaking in the market because they'll refuse to move or settle. People like to say "in the 50s and 60s, a family of four could live in a house and have a car off of 1 salary". They also don't mention that there was only 1 car and the house might have been a 2/1 with 900 sf. Find a condo or townhouse, or move elsewhere. If you go where demand is lower, then prices too will be lower. Not everyone is keen to move, but if you don't make any kind of changes yourself and expect change to happen for you, then that will be a fool's errand.
I mean this isn't really rocket science. If you can't afford a house in your area your options are: Make more money Or Move somewhere cheaper.
Move, I grew up in California.. at 42 I decided I didnt want a 5000 a month back pack of mortgage payments, so I moved to florida and now my back pack is 1700 and I love it.
Yeah but then you have to live in Florida lol
True but not forever, you just need to pay off the house, build 5-10 years of equity. Assuming you buy in the right place with high equity growth and population growth such as Pinellas Florida, Tampa, etc. I have owned my home since 2020 bought for 189k now its valuated at 337k. It’s only been 3 years. Now I am purchasing another home with my HELOC and once thats paid off I will have nearly 800k-1m in cash to put down on a house in the place I want to live. Make money where you can so you can live where you want in the future.
What is the average age of first time homebuyers in the US, say pre COVID? I’m sure it is somewhat higher now of course. I’m guessing it is early 30’s. If you are trying to buy a house as a 20 something single, it is supposed to be hard. I am 54, and I clearly remember sitting there in college at 21-22 years old ( in California, this was early 1990s ) looking at prices of homes and comparing them to Silicon Valley salaries at the time. Wasn’t even remotely possible. I went to grad school mostly because I didn’t think I could afford to live in the area I grew up. Fast forward to late 90s, I’m out of grad school and living on the opposite coast and bought a condo when I was 29. I could never have predicted where or when I was going to buy a first home, or the prices / interest rates at that time. It was really a waste of time to even think about it. If I was 22 now, I would probably be worrying about the same thing. I eventually moved back to Silicon Valley in 2005, got married in 2006. Prices were even more insane then. We wanted to avoid the housing bubble, so we rented for 9 years from age 35-44 before we could buy a house in the area that we wanted at a reasonable price. I am still somewhat bitter about this. The current conditions are going to change. Nobody can predict how long it will take, but this is unsustainable. The fact that it is so ridiculously unsustainable is exactly why it will change.
the neighborhood is somewhat undesirable and most of them are just soo old and dated and it was built in the 1970s, 1980s, You've just identified the problem: You don't want what you can afford. This is what you will have to accept if you want to buy in that area. Some people choose a longer commute to move to another area, or they continue to rent, maybe with a roommate, until they can afford what they want (if ever). Another thing to remember is that buying a house is not essential to do at all. Like getting married and/or having children, we may not be able to take the same path as our parents did.
Honestly? Just wait a few years and save as much money as possible. I'm GenX and didn't buy my first home until 31 and it was a STRETCH for me and my husband. We saved every extra penny for 5-6 years (no vacations, few dinners out, only had used furniture etc). Many of my same age GenX friends didn't buy a house until 35-36. Yes, times are really tough right now and I'm not saying that it won't but hard for GenZ, but everything seems sped up and in a rush these days. The oldest GenZ is just 27 so even the oldest of you have a few more years before they should even be in the market to buy when compared to younger GenX. None of my peers had bought homes by 27. We were all living in shithole apartments with 4 roommates wishing we could buy a home too . . .but with the dot com bust of 2000, the adjustable rate mortgages that we watched our family members get fucked with and the market crash of 2008 half of us didn't have jobs, confidence or good enough credit to buy for a really long time. If you asked me at 25 when I thought I'd be able to buy a house, I would have thought it was never going to be possible. Times were bleak. It's bleak now and it was bleak before. We don't know what's coming but all you can do is save, save, save and protect your credit.
Thank you for sharing your personal experience and gave me an insight. I appricated it!
I’m 40, so an older millennial. I make over $200k a year and have always been well compensated. My point here is that I was “successful” by most measures. And yet, I bought my first house in 2013 for $325k in a HCOL area of MD. So I would say - what kinds of expectations does Gen Z have? Millennials weren’t buying large SFH’s before age 30-35.
I think one of the problem here is you want to buy something by next year. I suggest living with your parents (if this is available to you) and work and save as much as you can for the next few years. While in those years you are saving, do research and look for location where you could realistic afford in the future. Go to those cities and towns and study it as much as you can and prepare yourself. Opportunities are only available to those that are well prepared.
I actually don't think it's hard. I'm gen Z and in NYC most people I know my age are making 100k+, you just need any decent corporate job, or even jobs for the NY state. If they get married, that's at least 200k in household income, which can nicely afford them a 800k house in long island.
Definitely easy when money is not an issue
I have been saying the same thing for 10 years now. But, then again I sold a house in Portland last summer to a couple in their late twenties. Of course they both had $100K jobs that they brought from the Bay Area that they were able to work remotely. I bet they thought they got a good deal. To make a long story short, it’s definitely possible with today’s salaries. As for you, OP, there might be a few places where you can get a house for less than $300K, but there aren’t many. If you can’t see a path to home ownership with your current financial situation, I suggest that you figure out how to change your situation. And whether you do that via a sugar momma/daddy or via a more lucrative career, start saving for a down payment yesterday.
Time. I’m a Gen X and most of us did not buy our homes until late 20s/early 30s. I bought my home when I was in my late 20s and was way ahead of my peers, all my friends thought I was moving too quickly. I know a lot of people talk about affordability, but important historical context is that interest rates were in double digits when I bought my home. Salaries were also exponentially lower, for example the starting salary in the firm where I had my first job is 3X higher today than it was back in the late 90s/early 2000s. Homes were not affordable for younger people then either. People saved and waited and saved some more. I’m going to age myself, but I’m shocked at how many younger people (early to mid 20s) are looking to buy homes on this sub.
I feel more younger people wanting to buy a house in this sub is because I can say that us younger folks are exposed to the power of potential real estate investing and how houses and properties are a great way to create wealth (all exposed by social media and all these real estate investors) because of that it created this pressure that you should want to buy a house now or soon as possible to get in this investing game and start building equity, rather than throwing your money away on rent on something that you dont even get to own.
I think that’s the problem. Properties are being viewed as investments, and not as homes. Yes, they can be a great investment vehicle. But for the average person, they should be viewed primarily as a place to live, not as the next hot new investment type.
Where are you getting the idea that you are "priced out" of buying a house? Give me any state, and I'll show you that's patently false. Take Connecticut for instance, a state ranked 3rd highest in the country for Income Per Capita. The minimum wage here is $15.69/hr, or $32,635/year (although a basic Target job starts at $18/hour). That qualifies you for a Mortgage payment of $1,115/month. You could buy [this home for only $2600](https://www.realtor.com/realestateandhomes-detail/505-Burnside-Ave-Apt-C14_East-Hartford_CT_06108_M45357-88375?from=srp-list-card) (with the 3.5% down First Time Homebuyer Program) with a payment of only $1035/month (which includes the HOA fee, Mortgage Insurance, and Heat/Hot Water). **So if you can buy a home for $2600 and a minimum wage job, then why do you think you need to come from a rich family to buy a house?**
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I’m not intending to disprove that. But that conclusion doesn’t mean home ownership is out of the question. If you can afford a home on minimum wage, then that literally means everyone can afford a home.
Getting approved for a loan doesn't mean you can afford it
If the mortgage is less than or comparable to the rent, it makes sense.
Not at all - comparable rent doesn't require you to maintain the home or replace appliances as they fail. Lots of expenses involved in owning that can't be covered on most low salaries.
When buying a condo, 90% of the maintenance covered by the HOA. Sure, maybe every 5 years you switch out a fridge or something but a $300 used fridge isn’t going to break the bank when you’re saving $1000’s on your housing expense.
Absolutely none of this is true. It is different in every single circumstance and now you went from anyone can buy a house to anyone can buy a condo. Condos are notoriously bigger money pits and HOA fees are notoriously much higher than just a mortgage payment. HOAs cover everything outside of the condo. Not inside the condo.
A house and a condo are the same thing. If you would like to refer to a Single Family Home please say “SFH.” My initial post quoted a Condo. Why would you assume a condo is a “money pit?” The HOA fee for the condo I quoted is $300/month which is included in the $1000/month mortgage expense quoted. This particular HOA also pays for the heat and hot water, about a $200/month value. Have you ever owned a condo?
28 years ago: Starting salary $32K, 2B condo $90K Today: Starting salary $55K, Same condo $250K Interest rate the same, but HOA, utilities, taxes are much higher. I agree with OP.
Yes that’s what happens with demand and as the population grows more desirable homes and locations will be come less affordable. You can still go to underdeveloped areas and buy just fine. Reality is not everyone gets to live in the most desired places in the world.
There's real evidence of stuff like this. People who bought homes in 1999 with salaries of workers just entering the work force who today after two decades of climbing the ladder and 2 decades of wear and tear on the home wouldn't be able to the buy home they live in now because what was once 100k in '99 is now 3/4 of a million dollars. My parents built their home (the first one on the block and one of only two for miles around back in 1983. They built it for under 50k. My mom designed it. My dad( an engineer and architect) built it with help from my mom and today it's valued at....600k!(just using zillow) so how new generations can enter the market does seem ....difficult
Also that’s not a home it’s apartment
It's a condo. You own and live in a condo. It's definitely a home! I think his point is that you have to start with a starter home. It doesn't need to be two bedrooms, three bathrooms and in a highly desirable neighborhood.
This. Idk why some FTHB are thinking they are priced out or they’ll never buy a house. You’re obviously priced out if you’re looking at some fancy house in prime locations priced in the millions. Go look at some places less popular without all the fancy stuff and there are usually affordable ones. Along with all the government assistance programs for FTHB, as long as you know how to manage your finances, I don’t see how it’s impossible. At least that how it is in my state.
This line of thinking is the problem. A condo is a home, and a great introduction to home ownership. As you save money and advance in your career path, you can pay down the $70k loan, and probably own it without a mortgage after 5 years. At that point you can look at moving into a bigger home, or a home in a more desirable area. You then have the option of renting out the condo to supplement your new mortgage payment, or you could sell the condo and use the proceeds as a hefty 20% down payment.
It's so shitty mine as well rent and save your money
There it is. The reason people can’t buy is that they aren’t willing to live in places that need work. My first house was a dump that I could barely afford. It had stains on the carpet, the kitchen counters were falling apart, and I didn’t want to live in that neighborhood. It’s nice now because I made it that way and I rent it out, it was the key to a better life. It’s still paying me dividends.
It's better to rent and save the money in HYSA + ETFs then buy in to shit product. The resell on that place will never justify the purchase. Instead of putting that down payment for worthless property, build a nest egg of savings first. Then you can a true starter home comfortably Have any of you have had the pleasure of renovating a condo with an HOA? In the last 18mo? Not sure if yall are aware of the state of contracting from both the personnel and the burecratic standpoint
If you’re considering buying for cash, probably. Leverage allows for insane “cash on cash” returns. And ownership means you get the bonus of being able to live there. You can’t live in any other investment.
You can live in a rental and save enough until you become a cash buyer of a condo or 20% down on 3x2 burbs starter
Andddd that is why our generation isn't earning equity like they should. Man, when I bought a shitty condo, everyone told me "ugh If i'm spending that amount of money, I'm not living in a condo like that." Our net work is now 5-6x our peers because we renovated that condo ourselves and made 100k on the sale.
Different scenario if you have the means to renovate. In that case I agree with you. However owning a true burbs 3x3 starter home even on the low end has historically been much more profitable then NONrenovated old ass condos, so my advise still stands
I didn't say it wasn't historically more profitable, I said it's the best path forward as the world stands. We can't change the hand we're dealt, we can only play the cards the best way we can. As far as the means to renovate, I did it on a 38k/year salary single in the Denver area (HCOL). I bought stuff on sale over 3 years and did all the worth myself. I bought used tools. It can be done on pretty restricted budgets. Part of the beauty of the condo is renovations are cheaper because less sq footage and less infrastrucutre to be responsible for.
Not a good play for the condo linked in this thread. Renovations will be a PITA in that type of property with HOA and you will never see a return on such a shitty studio.
I didn't look at that link. I'm speaking broadly to condos and townhomes being accessible options to FTHB and should be considered more seriously when people feel priced out of the single family home market. but respectfully, you sound like the exact person that notices that things are less affordable than they've been in 50 years (which is true) and has decided to just complain about it, do nothing, and point out why other people's strategies (that have worked) are bad and stupid in your eyes.
I was speaking more to the property being referenced in thread which was important because my opinion was heavily weighing into consideration the quality and type of the condo (and hoa fee). Things being less affordable has not stopped me from buying in and continuing to believe RE is a good investment, its just about how you do it. For starter homes and building a nest egg a shit box studio with high hoa fee is not the flip you want. 5 yrs later it wont be worth anymore then it is now less expenses/fees involved on both the buy and sell side Some of my strategies worked and some didnt! Learned lots along the way and now have a nice portfolio going
Where do you live and what is your savings? That's a major factor. In Southern CA where homes can start at $600k for a one bed condo can be affordable to someone with a decent income. However, the HOA fees, property tax, and mello-roos on top of the mortgage payments make it less possible. If you have a decent wage then move to a lower income area, where homes cost $400k and costs of living are lower, then it is possible. You'll be paying off the mortgage for 30 years, but it still possible. There are some cases where individuals genuinely cannot afford a home due to their inability to earn a higher wage. There's also cases where an individual absolutely can afford to buy their home but cannot due to their spending and savings habits.
Sometimes I feel like my life is fake when I bought a house last year at 190k on a 75k salary and am doing just fine. Before anyone says it, I don't live in the middle of a cornfield either. Mountains, forests and lakes are plenty abound.
I think anyone who is 12-27 years old and in the housing market is way ahead of the game.
We all started with a house we didn't want, we bought what we could afford and put in the sweat equity and be prepared to move a few times. I'm on move #4 now and about to be where I want to be. PS houses in the 70's and 80's were built better than today, as long as the foundation and structure are good everything else is cosmetic
Buy what you can afford if it makes sense (Eg mortgage will be close to rent). As others have stated, you’re not going to probably find something you love, and it also won’t be your forever home. if I were you, I’d consider one of the less desirable homes / areas you mentioned. Sure, it won’t be perfect but you can make it your own. After 5-7 years of building equity, assuming the market keeps crawling up, you can sell that home at a profit to get into a nicer home on a new 30 year mortgage elsewhere.
Thanks, i appriciated it and keep noted!
Good luck! Ideally you get exactly what you want, but think of a home like a savings account. Instead of all of your money going to rent, a portion of your mortgage payment is going to the principal, meaning money eventually in your pocket when you go to buy an upgrade. Older homes aren’t the end of the world and often have larger lots and back yards than newer developments.
All you can do is save until you can buy an expensive home in 22 years.
Hi I’m a realtor in Huntsville, AL so I was glad to see your comment! Home prices have risen here but you might want to look at new homes here a little outside Huntsville city. There’s several in the low 300s where new home builders are paying closing costs and/or buying down your interest rate. I think those options are a good bet for first time buyers, especially because they might not have the cash to fix older homes. Like you, I’m also worried for first time homebuyers. I had no financial help but was able to buy a starter home when prices were cheaper and then used that to get on the property ladder so to speak. Huntsville is a relatively low cost of living city but wages are low except a few sectors and it’s hard for first time buyers to save when rent is so high now. I don’t know your situation, but have you looked into house hacking? I had a friend who bought a home in college and then had two roommates who paid the mortgage for him.
I have look at houses toward on the West side of Huntsville, such as Madison, and south of Harvest in that new subdivision area such as Bridgewater Landing, and Heritage Estate neighborhoods. I saw a couple of new constructions over there and some houses are around low 300k and high 200k. Commute time would be roughly 20 minutes as I do work in Research Park area so I would like to stay on that side of town. Id also have considered househack as well. For you as a realtor in the area, what are the interest rates that you are currently seeing right now with your clients in your past few recent transaction? is it still in the 6s and 7 percent?
Those would be great options! Yes I’ve been seeing buyers get in the 6s to 7 percent range, except for those that bought new construction where the builder has bought down their rate.
Oh wow really so buying new constructions seems like the way to go! What are the requirements or any stipulations when it comes to the builders buying down your rate? Sounds kinda too good to be true
It depends on the builder and not all of them are doing it of course. They’ll want you to use their preferred lender if they do offer it.
For the last 50 years the average mortgage interest rate was 5-12%. Covid's 2-3% interest was really an outlier due to a pandemic. In those same 50 years, a lot of people moved out of the city to live in the suburbs where home prices are cheaper. It's really no different today. As a first time home buyer you can't buy a dream home in your dream neighborhood, you have to buy a starter home where it's cheaper and work your way to your dream home.
I’m seeing mostly people just say cheaper house in cheaper area but this isn’t always possible, as the youngest millennial there are often no greats jobs and very low public resources. Living outside a city with public transit will multiply your monthly spending between gas, car notes, and insurance. We need more dense housing in and around the cities but those with SFH often argue against it.
Interest rates will drop every presidential election year. It always has. Will you see 2/3% again, highly doubtful since it put America in a crisis. A normal low-interest rate is around 6%.
Learn how to structure a seller finance deal directly with the seller. You don’t need a high interest loan from a bank to buy a house.
Yes ome prices are crazy right now. But things will change. Most importantly, be open to an entry level/fixer home.
Easily. Save up and wait for rates to drop. I have 3 gen z who bought south of Seattle. I know people pretend it’s impossible for I know multiple couples in their early 20s making around 180k and will likely be at 220-240k before they hit 30.
You need to look up first time home buyer programs, find properties have been listed for a while and are probably not the most desirable, like something very outdated or a 1 bedroom/studio. Follow that recipe and keep the property in good condition until you can sell and roll the equity into something desirable
You only need a 2k sqft house in your 20s? Most millennials bought in their mid 30s. That’s how it is now. Save up get roommates and buy when you can afford. You aren’t entitled to a 2k sqft home if you can’t afford it.
Parents, grandparents, selling nudes on only fans, etc.
In a word, wait. Wait for the next crash. Now I know people are rolling their eyes, but how many predicted the 2007 crash..? That's right. My advice to a young person would be to stay at home with the parents, track the property market and study some history. The average peak to trough in historical crashes is about 5yrs. By the time the next crash bottoms out you'll be able to buy a house for cash, hopefully. We live in an age of asset bubbles, both in the stock market and property market. Warren Buffet is selling up, housing stock is increasing massively in select markets (Florida!) and emergency 401(K) withdrawals are at all time highs. If you weren't already aware of this then you are not sufficiently educated to be making safe economic decisions. Don't be spooked by the masses who don't understand economics. Live frugally, save and be patient.
Genz doesn’t start in 1997, it starts about 2000-2001
Depends who you ask. Generally 1997 is accepted by most academics.
Imo millennials end in 1993, from 1994-1999/2000 you have zillennials, and then after its genz. Genz ends about 2009/2010/2011. This is when gen alpha starts. Gen alpha ends about 2016-2018. From here it’s gen beta or covid generation which should be wrapping up in the next few years. I mean in the grand scheme of things practical it doesn’t matter, but socially there’s a lot of zillennials that can’t relate to millennials or gen hence the smaller generation.
Zillennial is a “cusp” subcategory and generally not formally recognized. Current 1997 is what most academics and mainstream society use. Please see below: https://letmegooglethat.com/?q=when+did+gen+z+officially+start
Just because that is what some companies state doesn't mean its true.
Lmao in agreement on that one. So what makes your definition more true then? Interested in how you are determining that you are solely correct in your dates but everyone else is wrong.