Hat tip to Eddie89 for sending in this article that includes 14 stories of how millennials purchased homes:
An excerpt:
Homeownership, like other forms of participation in the American dream, increasingly resembles an exclusive country club, with membership predicated on who your parents are and your race. To wit: A millennial’s likelihood of owning a home increases 9% if their own parents were also homeowners. While 39.5% of white millennials own homes, the black homeownership rate is just 13.4%, the Asian ownership rate is 27.2%, and the Hispanic ownership rate 24.6%. “Left unchecked,” the Urban Institute study declares, “current trends will result in even greater wealth disparities among white, black, and Hispanic millennials.”
The trends we’re seeing right now in homeownership will reverberate for generations to come — and accentuate the 21st-century parameters of privilege. The difference between people whose family can afford to help with a down payment and people who have no choice but to rent might mean the difference between who can live within 15 minutes of their job and who has to commute two hours, between who’s employed full time and those who depend on contingent work, between who can presume safety in public spaces and whose skin color makes them a perceived threat, between who can pay for college independently and whose children — and grandchildren — will eventually take out their own massive student loans.
I wanted to talk to people within this new reality about how they actually managed to make homeownership work. So I created a survey, and asked readers and Twitter followers and friends of friends of friends: Tell me everything. Tell me how you found the house, how you pulled together the down payment, and how you feel about all of it. Being transparent about this stuff won’t necessarily make buying a home easier for others. But it will hopefully demystify what it takes to make it happen, and help make clear that millennials who don’t own homes aren’t failures. They’re just young people who have faced a dramatically different financial and real estate reality than the generations that came before — a reality that has impacted some more than others.
What follows are 14 stories chosen from over 500 submissions, and they all exemplify, in some way, themes I saw again and again. (Stories have been lightly edited for length and clarity; some names have been changed to protect people’s privacy.) Many people received money from family for a down payment; they chose to buy in an area of the country where homes are markedly cheaper; their parents were homeowners or felt very strongly about homeownership as a mark of adulthood; others are ambivalent about their own homeownership and the way it excludes so many others their age.
Link to Article
My eldest in rural Sack-o-tomatoes was informed two years ago that their townhouse rental was being parceled out and sold. As tenants they got an early chance. They slightly overpaid per my estimate BUT lowered their monthly payment several hundred dollars relative to rent. Everyone was a winner. Even if prices had softened they were still paying less while waiting. And that didn’t happen. equity enough and both with better jobs I suspect it won’t be long before a SFR is next. Maybe we can buy it as an investment and pay them to manage it. Intergenerational wealth transfer is a fun hobby.
Long story follows! My late husband and I built our very first home in 1988– a little 1,248 sf home (w/ a carport) in Hawaii. The ocean-view lot was $50k, and since Scott was a stellar finish carpenter, it cost us only $70k to build. After a lot of sweat equity, we sold it after 4 1/2 years because the schools were ranked 51st behind Puerto Rico, and we had two little ones. We built another home in Bend, OR 10 years later.
The down payment was $20,000. We got $15k from my mom and $5k from Scott’s dad. We paid him back in 10 months (10% interest at the time) as it was our 2nd-highest priority bill after paying the monthly mortgage payment. We had no credit so unbeknown to us my mom co-signed the loan. (She didn’t tell me for a year). We had other angels in our life to make this unbelievable dream of first-time homeownership come true.
I’ve been a real estate addict ever since. My fiance and I built a 2,340 sf home last October.Now my 6th home, I’ve never forgotten the help I received in the last ’80s. Without that help, I wouldn’t be where I am today. My son, who’s very successful in tech, is looking for his first home in Boulder. I’m planning to help him with the down payment. It’s a tough market–around $700-800k– in the area he wants even for a condo or small house.
As my first RE mentor, Bill May, told me, “You have to live somewhere.” That realtor wouldn’t sell us a house. He told Scott with all his talent to build instead. After that first sale in Hawaii, we received a 6-digit check (profit). Now my mentor is Jim the Realtor. My next dream is to flip a house here, but I’ll have to be patient as it’s a very hot market. I’ve lost plenty of moolah in the stock market, but never in real estate.