A couple of weeks ago, the New York Times ran a piece called “The New 30-Something,” diving into the lives of gainfully employed, fiscally responsible millennials who nevertheless still need help from their parents just to make ends meet. The piece was less an indictment of this generation as the cliché’d, spoiled avocado eaters, and more of a lamentation that the cost of living in American cities is so high that “even those with a stable, upwardly mobile job” can’t afford to become homeowners without help from their parents anymore.
I’m not going to sit here and argue that some people my age aren’t cashing in on family wealth to achieve millennial homeowner status. I can think of half a dozen individuals in my network alone who received parental aid, ranging from a no-interest loan for a down payment to a completely paid off $1.2M house as a wedding present (cool, cool, same, same). But as I’ve entered my thirties and buying a home is becoming an active goal/actual possibility, I’ve become more and more curious about the path of the “self-made” millennial homeowner. I reached out to a bunch of people in cities across the country to hear about their home-buying experiences. And I learned a LOT. From tax credits to second jobs and beyond, this is how these millennials are buying homes — sans familial wealth.
They’re taking their time and doing their research.
Andrea, a 30-year-old Real Estate Professional in Boston, says she realized it takes a while to find what you want. “I looked for over two years. It can definitely take a while if you’re trying to get a ‘good deal’ and you know what you’re looking for. We wanted a place that had good potential, but looked a little old. When we finally found it, we put an aggressive offer in so they would close down the other open houses (and so we could avoid a bidding war).”
“Finding a good realtor was key,” says Erik, a 31-year-old Sales Executive in Washington, D.C. “Someone we could trust. Someone who’s not in a hurry. Someone who understands what you need and want. Don’t be afraid to fire them and move on if it’s not a good fit, and don’t sign anything from a realtor before you’re putting an offer on a house.”
They’re taking advantage of programs for first-time buyers.
“I would say this is what made it all possible,” explains Sam, a 31-year-old healthcare worker in Baltimore. “We live in Baltimore City and participated in one of their homebuyer incentive programs through the Maryland Mortgage Program… We received a cash grant of $7,500, a certain percentage less than the Maryland Mortgage Program interest rate, and Private Mortgage Insurance that disappears after 10 years or a certain percentage of the mortgage gets paid off…. [That] grant helped us with a down payment and closing costs.”
According to Erik, “D.C. has super-progressive incentives for first-time buyers. We didn’t qualify for most of them due to our combined income, which just barely edged us out. But we did get some incentives from the city through our lender. We also purchased a MCC (mortgage credit certificate). It cost us an additional $1,500 up front but allows us to credit our city taxes with mortgage interest paid, so it covered itself in the first year. ”
They’re skipping grad school (or only going if it’s paid for).
This was an easy decision for Andrea. “Going to grad school is not something either of us was interested in pursuing, so it was easier to buy a home in our late 20s/early 30s.”
For Jenny, a 32-year old Marketing Director in LA, company benefits came in handy. “My company offered $5K per year towards a degree, and getting my master’s from a state school was $20K, so I took 4 years to complete it. Then I stayed with the company for the amount of time I needed in order to be able to leave without having to pay them back.”
They’re scrimping like crazy.
“I chose deliberately to live next to my job so I could walk to work,” says Jenny. “My partner and I also share one car to keep costs down”
Lisa, a 35-year-old in Pittsburgh, found ways to cut costs and increase her income. “We saved a lot of money by doing things like driving a hand-me-down 2005 Honda for years, and working multiple jobs when necessary.”
“We needed to pull money from somewhere else besides our savings, and since we were nowhere near retirement we decided to liquidate my 401K.,” says Ozzie, a 32-year old Communications Manager in Los Angeles. “The equity in our house exceeded that balance in no time.”
They’re being strategic about location.
Lisa knows all too well that you can’t get the best bang for your buck in the flashiest places — and that’s okay. “We could not own a home in New York, D.C., or Chicago, but Pittsburgh is affordable and still has all the good things you want from a city — great food, theater/world-class museums/cultural activities, public transportation, as well as new jobs coming in.”
Sam agrees. “I live in an affordable city, and purchased in an ‘up and coming’ neighborhood. When we moved in, a new mixed-use retail/apartment building and a new food hall were both under construction. Real estate agents scoffed at our desire to live in this neighborhood, but we were patient and found something that checked all of our boxes.”
And even more strategic about timing.
According to Andrea, “Never try to buy during the summer. Summer is the big time for open houses, and thus, bidding wars. If you wait until fall, many sellers become terrified they’re not going to sell before winter, and they’ll let a home go for a good deal.”
Ozzie spent a lot more time looking than some might expect. “I looked at houses for 4 years before even talking to a realtor. After 4 years, I watched the market fall drastically; foreclosures and short sales on Zillow were popping up in droves, and I said to myself, ‘I’ve got to get in on this.’ Don’t rush. Watch market trends. Purchasing at the first sign of an uptick in prices allowed us to capitalize on a lower price and enjoy immediate appreciation shortly after moving in.”
For all of these millennials, buying their home independently was a real point of pride. But many of them also recognized a lot of lucky circumstances and other advantages in their lives that didn’t come directly from family money. (Secondary privilege is real, y’all!) Lisa acknowledges that “not having a massive amount of student loans” was a big leg up in their house hunt. Jenny points out that just being and staying healthy has been a huge advantage for herself and her partner, as just one accident or major illness can drain a savings account faster than you can say “high deductible.”
All of them also acknowledge that the process was hard and required a lot of sacrifice, but it was ultimately doable and not as daunting as it seemed. So if you are among the wide faction of millennials whose parents can’t help them purchase a home, your house dreams are not a lost cause. Just make sure you have your avocado spending under control first.
Laura Munoz is a copywriter and freelance journalist living and working in Los Angeles. Visit her website here.
Image via Unsplash