Homeownership may not be the rite of passage it once was for young adults: according to a report by the Pew Research Center, 2016 saw the lowest level of young homeowners in over 40 years. The same report says that 81 percent of adults think buying a home is the best long-term investment in the U.S., but rent homes due to financial barriers (like pre-existing debt or the high cost of a down payment). Millennials also face a number of constraints that older generations just didn’t have to deal with, like lower wages, high student debt payments, and tighter lending standards. While homeownership might not be the right option for everyone, it should still be an option for everyone. So, as homeownership seems more and more out of reach for Millennials, we wanted to showcase a couple of young people who have somehow done the impossible–bought a home–and figure out how they did it. Here are two of their stories:
Ian Fine, 27, Florida
During his housing search, Florida resident Ian Fine became such good friends with his real estate agent that he ended up becoming an agent himself. The 27-year-old settled on a four-bed, two-bath, two-car-garage home in Melbourne, Florida. The three things he says he looked for in a home? Price, location, and condition. “I’m a very handy guy, so small things weren’t a concern,” he said. “Price was tight for us, but we ended up getting what we wanted and more.”
When asked about his motivation in buying a home, he said that it was the logical next step toward financial independence. “Rent is on the rise and so are home values. We decided to catch the value wave up instead of the rising rent prices draining us dry,” he said. After struggling to find a realtor, the couple ended up connecting with an agent so talented he talked Fine into getting his real estate license. Fine and his agent are now great friends. “We didn’t know anything, but our agent was very knowledgeable and helped us along nicely,” Fine confided.
The process of buying his home was fairly standard, according to Fine. After a simple loan and inspection process, he and his fiancée went five to 10 percent over asking prices to win bids at times. “The market was—and still is—highly competitive in our area, so we made many offers on homes before having any accepted,” Fine said. The appraisal of the home supported his purchase price, and thanks to a first time buyers program, Fine and his then-fiancée (now wife) were able to close the deal with only $2,000 out of pocket. “It was all our own money,” he said. “We both work hard for the things we have and are always striving for advancement.” The sizeable home in a nice neighborhood ended up costing $130,000.
His advice to other Millennials thinking about buying a home? “Do it before it’s too late! Your excuses for not will never outweigh the advantages when you do.”
Shree Pandya, 24, Texas
Shree Pandya, 24, works with a Venture Capital firm to start new healthcare companies. While she frequently moves for work, she often finds herself in the Bay Area and in Texas where her family lives. “Being from Texas, I have a decent familiarity with the housing markets in the core cities. I knew that Austin’s property values were going to keep increasing, and I wanted my immediate family to get a property before the cost became ridiculous,” she told Generation Progress. Before she started house hunting, Pandya rented an apartment in Manhattan. Pandya wanted a two-bedroom home with garage and decently sized kitchen. She also wanted to find a newer property that was rentable and safe for a family, as there was a strong possibility she’d move to a different city for work. Cost also narrowed Pandya’s search; she didn’t want her monthly payments (including mortgage, interest and homeowners’ dues) to exceed more than $1,900.
Aided by a knowledgeable lender and stellar agent, the home-buying process was smooth for Pandya. She spent a month shopping around on Zillow and Yelp to find the perfect agent. After a 20 minute conversation with her top choice Isabel Affinito, Pandya felt the realtor had a good sense of what she was looking for. “She’s hardcore,” Pandya wrote approvingly in an email. Her biggest challenge was finding the right lender. “I wasn’t crazy about the big banks and I ultimately much preferred—and got a way better deal—working with a local, more specialized lender instead.”
When asked whether she felt she knew enough before buying a home, she laughed. “Not really. I spent a lot of time researching various aspects of the process while it was going on, and I relied heavily on the advice of my parents. It was a family endeavor. Because I knew I was at an information disadvantage, it was really important for me to find folks who were trustworthy and had integrity.”
The condo she purchased cost $290,000, with a 20 percent down payment. There were few setbacks during the experience, and she considered herself very privileged during the process of buying her condo. Pandya received a full-ride merit scholarship to attend college, and fortunately did not have any student loans that would have hindered the home-buying process. She split the cost of the down payment 50-50 with her parents. The 1300 square foot, two-bedroom unit is only a 15 minute drive to downtown Austin. “I’m very happy with my choice,” said Pandya.