4 ms·
I'm behind the paywall but I'm wondering if this is because, just maybe, younger people understand finances better. When I wanted to buy a house, I waited until
by gg2488 7y ago
I'm behind the paywall but I'm wondering if this is because, just maybe, younger people understand finances better. When I wanted to buy a house, I waited until I save up the 20%. I know plenty of friends in their late 20s and early 30s who have the same attitude. Me and my wife also paid for our wedding in cash, we waited until we could afford it. You have the millennial generation looking at their parents still working and we're desperately trying to achieve financial independence so we don't suffer the same fate. I see so many articles about how bad millennials are burdened with student loan debt, but that's made us more concerned about finances than any other generation before us.
So maybe it's less than we can't afford houses with high incomes. It's that we're less willing than our parents to take on financial risk instead of renting.
- jandrese 7y agoThe downside of saving a lot before you buy is that you still have to pay the rent while trying to save that money. Putting 20% down has advantages when making the loan (better rates mostly) so it makes sense, but saving beyond that is making your life more difficult. I think Student Loan debt is a huge factor in buying houses later. It's really hard to save if you're paying down debt as well as paying rent. It could easily delay their entry into the housing market for a decade.
- dinkleberg 7y agoYeah in my area I'm paying probably $200+/month more for my small apartment than I would for a house that's 2-3 times the sqft. It's frustrating to know that I'd actually be saving money + building equity of I could just buy a house today. But saving up is hard when you're also paying off student debt. My family has told me that you should always save up the 20%, but it seems like like the FHA 3.5% is the winners choice. If I wait until I have 20% down it's going to take ages and all that money spent on apartments is going to waste.
- gg2488 7y agoOne thing I keep telling people is that buying a house really won't save you money in the long run. I only bought a house for the space, me and my wife both work from home in the midwest and need the office space. You'll spend more than you realize on upkeep, furnishings and the increase cost of utilities. My opinion is If you really want to save money, find a cheap cost of living area and rent. Only buy a house if you need the space and know that you'll be staying in that area for 10ish years.
- dinkleberg 7y agoI get where you are coming from, and the cost of upkeep can certainly be high, especially on older homes. But surely the cost of (apartment rent + other associated costs) * however many months is going to be higher than (cost of house + interest from mortgage + upkeep + increased utilities) - (eventual price you sell it for) The apartment situation you will always be negative, whereas even if you only end up selling your house for the same price you bought it at, you've only paid for interest + upkeep + utilities. The interest + upkeep are certainly not insignificant, but when your rent is as high as the mortgage cost, surely buying has got to be the better option over the longterm. But maybe I'm just fooling myself.
- gg2488 7y agoOh I agree that student loan payments hurt the ability to save. My point is more that this generation is more cautious about buying a house with very little down because we know the long term affects of large debt. I do think that addressing the student loan issue would directly help the housing market.