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The bolded part above is exactly what I hear from my children's viewpoints.
They hate to cut the grass, shovel the snow and do some maintenance outside the house. About buying a condo, the condo fee is quite expensive too. And they did tell me that nowadays there's no job security, so if you buy a home and then lose your job, then that's a big problem.
I can help them with paying off the loan or downpayment, but they still don't want to buy a small house or a condo. I don't insist though. I let them make decisions on their own.
You don't need to buy the big house on the big lot that requires tons of lawn maintenance. I grew up in a house like that where weekends were filled with lawn chores at Walmart/Target runs. Mowing the leaves goes on well into December at my parents' place. The grass typically greens up in March and you're mowing again in April.
Depending on where you're at, you can find a COA/HOA to cover as much or as little as you want. I belong to a YMCA and get a season's pass at the local water park. I'm not likely to use the community pool.
I agree on the job loss thing, especially in smaller towns where there may not be a lot of work, but you can't constantly live your life in fear of a possible job loss. It's a fish or cut bait thing.
Student loan debt is definitely a real concern, and can significantly reduce the size of the mortgage loan the borrower(s) can qualify for. Just as much of a concern, though, is the uncertainty of many private sector jobs - young people getting established in their careers don't feel confident that their jobs are secure.
It's a combination of factors. FWIW, I'm 33, so an older Millennial.
Student loan debt creates a monthly expense that crowds out other spending. I know a few people with heavy student debt, and almost all of them had liberal arts degrees from private schools of questionable academic pedigree. The others I know with a lot of student loan debt farted around for years in school and never graduated.
State schools, even the regional state U's, tend to be a fraction of the cost of a private college and have much better academics, at least in my neck of the woods.
Where I live, the big problem is a lack of quality jobs. It's not uncommon at all for even a "good degree" to end up in a call center or similar. I graduated in 2010 and started at $14-$15/hr. Counting bonus, I make about three times that now. Even in a low cost of living area, $14/hr is not much money. Sure, you can find a house here for $100,000, but that doesn't matter much if you're low income and all your money is going to basic bills.
Personally, I don't want to get on the rent treadmill again, unless it's for a short time after a major move. Rent has gone up by 5%-10% a year anywhere I've ever lived. I own a 2BR/2BA townhome with a loft, ~1200 sq. ft, and a 550 sq. ft garage for $675/month PITI. The back of the condo abuts a bike path that is 1000 ft. from the entrance to a 2000 acre city park. Taxes are reasonable. I have gig fiber to the premises.
My last rental was well under half this space, about $200/month more, with rents certain to go up YoY.
We're the same age and basically had the same boat, but I live in an area that has a ton of jobs . I graduated college with about 10K in student debt because I worked through college. My older siblings gave me the best advice to come out of college with as little debt as possible. Glad I did because I was able to buy my first home at 23 and I had roommates live with me so I was basically living in my home for free. Sold that and was able to buy 2 more houses from it. So I credit my siblings for teaching me about low student debt.
I know some people who graduated from my school same year and went to a nice grad school and they ended up with 250-300K in student loans. They won't get approved for a house loan so they are basically forced to rent an apt even though they make decent money now, but the problem is their student debt is soooo much.
It's a shame that student debt is so high, but I think the bigger issue is debt education. That's the biggest issue. College kids don't think about the debt because they're like "Well, this degree will get me a high paying job" and it's often not the case and they have more debt than they bring in yearly income.
I think most millenials (fellow Gen Y-er, born in '86) would buy a home if they were flush with cash. As such, most of us do "OK" but not well enough to feel comfortable saving many thousands of dollars just to sink into a home with ongoing costs (repairs, taxes, HOA fees etc).
The millenials I know that have bought houses are either really high earning STEM majors with parents that don't need their financial assistance or people that received nice cash infusions from mom/dad/grandparents to get kickstarted. There are exceptions for those that bought cheap in very rough neighborhoods...few and far between.
I think a house is great if you can afford it. Nice way to store value and have something to pass on. I don't think it's a great investment and shouldn't be treated as such; especially if you have to be extra frugal and scrimp excessively just to pay your mortgage. Rent, save the extra money and put it in the market.
I think most millenials (fellow Gen Y-er, born in '86) would buy a home if they were flush with cash. As such, most of us do "OK" but not well enough to feel comfortable saving many thousands of dollars just to sink into a home with ongoing costs (repairs, taxes, HOA fees etc).
The millenials I know that have bought houses are either really high earning STEM majors with parents that don't need their financial assistance or people that received nice cash infusions from mom/dad/grandparents to get kickstarted. There are exceptions for those that bought cheap in very rough neighborhoods...few and far between.
I think a house is great if you can afford it. Nice way to store value and have something to pass on. I don't think it's a great investment and shouldn't be treated as such; especially if you have to be extra frugal and scrimp excessively just to pay your mortgage. Rent, save the extra money and put it in the market.
Where I'm at, it's cheaper to actually pay a mortgage than to rent since the rent increases are so high every year. I am putting more money into investing now than when I was renting actually.
Great feedback so far, thanks all! I guess a lot of younger folks (under 30) just don't have the same desire of home ownership as our generation. As stated by your replies, many factors involved, but primarily the fact that alot of these millennials do not view same employer as long term and are as equally likely to switch jobs and or careers for the next best new opportunity that comes along, perhaps. Very interesting. Sure I'm aware of population growth but it's hard to believe so many prefer paying rent in my baby boomer mind.
We're the same age and basically had the same boat, but I live in an area that has a ton of jobs . I graduated college with about 10K in student debt because I worked through college. My older siblings gave me the best advice to come out of college with as little debt as possible. Glad I did because I was able to buy my first home at 23 and I had roommates live with me so I was basically living in my home for free. Sold that and was able to buy 2 more houses from it. So I credit my siblings for teaching me about low student debt.
I know some people who graduated from my school same year and went to a nice grad school and they ended up with 250-300K in student loans. They won't get approved for a house loan so they are basically forced to rent an apt even though they make decent money now, but the problem is their student debt is soooo much.
It's a shame that student debt is so high, but I think the bigger issue is debt education. That's the biggest issue. College kids don't think about the debt because they're like "Well, this degree will get me a high paying job" and it's often not the case and they have more debt than they bring in yearly income.
It's a vicious cycle.
I used to live in a suburb of Indianapolis with abundant job opportunities. That's where I got my career back on track after a rough start here for a few years after graduation. Still, the rent increases outpaced my salary increase every year I was there. That was a much more competitive RE market than here, and it would have been years before I was ever able to afford anything there.
Part of the problem is that if you go to college in an area without many jobs, it's difficult to land that critical first job out of college. I went to school at East Tennessee State University. Knoxville, TN is the nearest "large-ish" metro, and that's two hours away. Charlotte is your nearest real job center and that's 3-3.5 hours away. An East TN State graduate isn't going to have any special "in" for a job in Knoxville or Charlotte.
If you don't land the "correct" first job, it's difficult to get back on track.
I think it is funny that so many younger people think we did not have student loan debt or expensive homes. I had today's equivalent of $210,000 in student loans (about $70,000 to $80,000 in 1988). Real estate where we lived was going up as much as 20% or more per year, while wages went up 1 - 2 % and down one year.
Eventually you can get into a home even with student loans and exploding housing prices. Save a little bit and be patient while you wait for a crash. Also be less picky about where you buy in, just get in when the opportunity arises.
We bought our house with almost nothing down. FHA required 6% down. Seller carried 3% as a second, the rest came from a tax return, a garage sale, selling some stock my wife's grandmother bought for her when she was born (Two shares of Disney stock which split several times so we had six shares I think). Cashing in our whole life insurance policies (which were worth about $800) and borrowing from relatives. We had no curtains and very little furniture for the first several years. We ate thanksgiving sitting on blankets on the empty dining-room floor with the neighbors watching for a year or two. But we got in. Eventually we used the equity in the house to pay off our student loans. Eventually we got some curtains and furniture.
We did have one thing that young people do not seem to have today: Patience, Grashopper, patience.
I used to live in a suburb of Indianapolis with abundant job opportunities. That's where I got my career back on track after a rough start here for a few years after graduation. Still, the rent increases outpaced my salary increase every year I was there. That was a much more competitive RE market than here, and it would have been years before I was ever able to afford anything there.
Part of the problem is that if you go to college in an area without many jobs, it's difficult to land that critical first job out of college. I went to school at East Tennessee State University. Knoxville, TN is the nearest "large-ish" metro, and that's two hours away. Charlotte is your nearest real job center and that's 3-3.5 hours away. An East TN State graduate isn't going to have any special "in" for a job in Knoxville or Charlotte.
If you don't land the "correct" first job, it's difficult to get back on track.
I agree with that too. I know in many cities where people go to an expensive liberal arts college and masters degree, they have their nice degrees, but they also have their 200K student debt. Then you can't find a job and end up working as a barista at a Starbucks and stuck living with your parents in your hometown.
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