American millennials found a way to buy a home: living with mom and dad

At the age of 26, brandon polin He couldn’t believe that he was still living with his parents. Already the mayor of his hometown, indian chief ,maryland), Pauline was still sleeping in her childhood room. He watched the friends he grew up with move into their own apartments after college, and he desired a similar independence for his fiancée, tarynWho lived 30 minutes away and also lived at home to save money.

But it also meant she never had to make up for the awkwardness of growing up under her parents’ roof. In June 2022, he and his current wife saved enough to make a down payment on a two-bedroom house with a nice garden for their beagle, Bella and Lilo.

“It wasn’t a traditional way to buy a home,” says Palin. “But it worked for us.”

This strategy has gained popularity among young adults trying to bridge the gap between skyrocketing rents and a depressed housing market. According to , in 2022, the percentage of first-time buyers buying their home directly from a friend or family member will reach 27%. National Association of Realtors,

That’s the highest percentage since the group began keeping track in 1989. Although this figure has dropped to 23% this year, it is still high, according to jessica lutzDeputy Chief Economist and Vice President of Research Male,

For many millennials, sheltering in one place with family gave them the breathing space to save their home. There are trade-offs when temporarily giving up some degree of independence in order to achieve a milestone that is out of reach for people your age.

lutz He said this generation faces many obstacles — student loan debt, car payments, and daycare expenses, among others — but none more than record-high rent prices.

In November, the national average for a one-bedroom apartment was about $1,500 a month, according to Zumper. But it is significantly higher in larger urban areas, a guide for young professionals. New York (USD 4,300), san francisco (USD 2,970), miami (USD 2,600) and DC. (USD 2,330).

“The cost of renting housing is very prohibitive for young adults,” Lotz said. “And they may have made a decision during a pandemic: Why should I hire? “Why don’t I stay home?”

At the same time, they face a tough real estate market characterized by high sales prices and interest rates, and they are becoming increasingly disillusioned and desperate. The average age of a first-time home buyer rose to 36 last year, according to Malecompared to 29 in their parents’ generation.

Meanwhile, housing prices remain near all-time highs. According to statistics, the US average is around US$420,000, with prices much higher in the West, above US$600,000, and around US$430,000 in the Northeast. federal Reserve,

Interest rates on 30-year fixed rate mortgages have fallen below 7% for the first time in months. Borrowing costs are more than double what they were at the start of last year.

Inventory – particularly the number of starter homes – remains at historic lows; Young buyers are also moving ahead baby boomers Who come with all cash offers. Fewer homes were sold in October than any other month since 2013, and 2023 is projected to have the lowest existing home sales of any year since 2011, according to NAR data.

He said, “Given the decline in housing affordability, it is no surprise that young people are turning to their parents to manage their expenses, save on rent, and save for a down payment on a home.” “are living longer in the houses.” mark zandiChief Economist of Moody’s Analytics,

Zandi said he wouldn’t be surprised if this trend continues. The supply shortage, especially for starter homes, could become “increasingly difficult,” he said.

Zandi cited 2023 census data that found 20% of men between the ages of 25 and 34 live with their parents, a figure that has been rising since the 1980s.

For women of that age, the figure was 12%, which has been rising steadily over the past five decades. Although this number is increasing usaThey are still far behind countries like maltAccording to statistics, where in 2022, 70% of adults under 35 lived at home with their parents. Eurostat,

Palin, who is in her third term as mayor indian chiefSaid he shared a basement unit with his younger brother, who kept him up at night chatting with his friends while playing games. Fortnite,

It was annoying, Palin said, but the living arrangement allowed her to save much of her income, and she found relief in buying her own home for about $350,000 last summer at a rate of 6 percent.

“It didn’t look like we were going to get much more than that,” he said. “And we were afraid that if we kept waiting, interest rates would keep rising,” he said.

Alex Mourousias33 year old computer engineer chicago, was reluctant to move back in with his father as he had been living alone for years. But it was the middle of 2020, and the coronavirus pandemic had people locked at home. the father of maurausias He had a proposal: He would not charge his son rent and would give him the opportunity to save enough for a down payment.

maurausias It was sold. He lived with his father for six months. And when his father sold his house and moved in with his new wife, Morousias moved in with his mother. It wasn’t so bad, says Morousias: Their house was big enough that they didn’t get in each other’s way, and they often gathered in the afternoons to watch reality shows. 90 day fiance,

When lockdowns began to lift in mid-2021, Mauritians had enough money for a down payment. In July 2021, he purchased an apartment in Chicago’s West Loop neighborhood for $386,000 with an interest rate of 3 percent.

“It was a great gift they gave me,” he says. Losing the freedom to be alone “It was a very fair price for what I got from it.”

avalanche of millennium Taking advantage of free or discounted rent from relatives coincides with the increasing prevalence of households multigenerational, Number of Americans living in households multigenerational The number has quadrupled since the 1970s, according to an analysis of census data. Pew Research Center,

Pew attributes this increase partly to broader population growth trends, such as the increase in the number of Asian, Black and Hispanic families, who live in multi-generational households at higher rates than their white counterparts.

According to the study, nearly a third of American adults said caring for a family member was one of the main reasons for their organization, while 4 in 10 cited financial issues. researchers of bench They found that people who lived in multi-generational households were less likely to live in poverty, especially the most economically vulnerable groups like blacks and Hispanics.

He said the rising cost of homeownership has particularly hit Black and Latino buyers, who have taken out mortgages at falling rates since the start of the pandemic. jose loyaAssociate Professor of UCLA Which examines housing inequality. These groups are disproportionately affected by rising housing prices because they have lower incomes, he said.

“They are being abandoned,” says Loya.

Young people living in family homes located in booming real estate markets often find themselves pushed out of their own neighborhoods. This happened to Jackson Cowart and his wife, Emma, ​​who moved in with his mother. cowart She traveled to her suburban Seattle home for seven months for help with a medical problem.

Even with a combined annual income of about $200,000, they knew they would be completely priced out of the Seattle real estate market, where the average sales price is about $840,000, according to Redfin.

Cowart says he and his wife constantly searched for homes on the Internet during the months they were at his mother’s house. Eventually, they settled into a two-bedroom house in the woods, 70 miles west of Seattle. Olympic National Park,

“It was worth it,” Cowart says.

Washington Post