It can feel impossible to actually be able to buy a house, and in today’s crazy market, perhaps it’s never felt more out of reach.
This TikTok pretty much sums it up, actually:
@johnsonfiles Anybody else in this crazy fight for a home?? #realestate #housingmarket #comedy #funny #realestatetiktok #realestatehacks #houseshopping #fixerupper
Thankfully, some millennials who were lucky enough to buy a home are sharing their tips on how to do just that.
Now, tons of articles talking about how to afford a house usually start with tips on penny-pinching and at the very bottom mentions that they were actually an heiress to a taffy company and was left 30 million dollars.
Those articles are annoying and unhelpful.
There might be some undisclosed family wealth in these tips, but generally, they are for everyone who will never see a dime of taffy fortune.
1. Stop giving gifts.
Bought a $460,000 condo with my girlfriend (now wife) in 2015. We made a ton of sacrifices – we stopped giving birthday/Christmas/anniversary/valentine’s day gifts. We had 1 date night a month, as opposed to every weekend like our friends. It put a lot of strain on our relationship, and her friends didn’t help, always saying she can find a richer guy that can just buy her a place. Long story short.
We have been together for 10 years now, we saved enough for a downpayment through sacrifice. Sucks when your friends got to travel, buy new cars, get the latest tech… And all that jazz. But they are now struggling to make a downpayment to buy a place. –/error117
2. Living within your means.
I lived at home, saved, saved, saved, bought a 1 bedroom downtown in 2011. Continued the trend of living within my means and saving and ended up finding a partner that ‘fit’ across the board and bought a larger place downtown in late 2015.
Now a landlord and living comfortably a few blocks away (still downtown). –stan325-2
3. Location, location, location.
Millennial here!
Bought our first place in December of ’16 for $143k after saving for a few months for a 3% down payment outside of the regular emergency fund.
We have two incomes, but it’d still be viable if either my wife or I decide to not work
It’s all about location. –[deleted]
4. Put money in stocks and bonds.
Well, technically I’m Gen X (born in ’78) but my wife is a millennial (born in ’81). We bought back in 2011 as the market started to recover. We didn’t get help, are both technology professionals, and under no circumstances would I want to buy my house at its current worth… which is over twice what I paid for it. Technically we could afford it but between the down payment and the mortgage, it’d be a bitter pill.
Right now all the money I might put towards a second property is instead going into a mix of mutual funds, bonds, and stocks. At least that way it might appreciate and if a market correction comes I can cash out and buy property. I’d be doing the same thing if I was renting currently and not a homeowner. –bluebelt
5. Find a good DIY project.
Grew up poor (shared shoes with my brother) so definitely no money from parents. first to even go to community college. No college degree. Married, have 2 kids, & on my 2nd home.
It can be done, but it’s not easy.
The way to do it is to buy a condo that needs work in a rough area. Learn to do stuff yourself like new toilets, cabinets, lighting & electrical, flooring, etc.
Do all this stuff yourself and live in a construction zone.
Stay for at least 2 years to not pay taxes on the value increase. Sell it, and roll it all into the next home. Rinse lather repeat until you get to the house size you want. –NostalgiaDad
6. Live with roommates for a while.
Lived at home during college. No college debt– thanks to parents!. Then lived with roommates for years and paid cheaper rent (under $1000) to save up for a down payment. Great paying job in web development. Don’t drive a luxury car. Didn’t buy an almost million-dollar home in Irvine but something more affordable. –crazycatlady5000
7. Live as cheap as possible.
Lots of sacrifices. I lived very cheaply for 2 years so that I could live the more comfortable life I have today.
25 Male, bought a condo in the greater Vancouver area last year.
Basically decided I was tired of the sh*t renting experience in early 2016, then went full cheap mode, saving every penny.
Lived in a tiny dank dark basement for $700/month, stopped eating out entirely, dropped to about $150/month on food total. Sold my car for a much cheaper one and dropped all insurance coverage except mandatory third-party liability. Dropped down to a $25/month phone plan. Bought no new clothes, no shopping, etc. Basically total expenses were around $1200/month while I brought home about $3200/month.
In 2 years saved $46k, and another $14k from downgrading cars. Put $60k downpayment and bought my condo at 24 for $320k.
Funny thing is that neither of my parents (divorced) are homeowners due to poor financial planning and bad decisions.
I should also mention I did a 2-year college diploma in technology which helps a lot for starting young with a relatively high salary.
I also had $0 debt during this entire period which is very important. –BigCheapa**
8. Find a crappier house first.
Parent of two millennials here.
Lower your expectations about what type and size of home you can afford. You don’t need to get the 3 bedrooms, 2 baths with a full-size yard as your first home.
Get an older fixer-upper and Google how to do repairs yourself. Seriously, I wish I had YouTube as a resource when trying to figure out how to change a light fixture into a ceiling fan.
Instead, we had to buy $20 books at the home improvement store, or call Uncle Dave the electrician and have him explain it by phone.
The intent is to get the cheapest house that is safe and comfortable. Build equity on that, and then use that leverage to move up. Granted you have to time that with market value.
You didn’t start out driving a $50,000 SUV with all the bells and whistles. You started out driving the 10-year-old beater to high school that constantly needed the oil checked and would leave a small puddle if you left it sitting too long. Take the same approach with house buying. –zoso1969
9. Get a job that lets you pick up more work.
Moved out right around when I turned 18-19. This was right during the recession in ’07. Lived in San Bernardino for cheap (all I could afford) and just saved. Lived very frugally while I built a clientele in my trade (cutting hair) and just eventually had enough for a down payment 8 years down the line.
Living comfortably with a single income, no debt, no college degree. –AlexKavli
10. Start with the debt.
Aggressively eliminated all debt (especially credit card) and lived in a tiny 1BR rented condo for 5 years while saving money.
I didn’t buy more car or house than I could afford and came in with a 5% down payment. No help from my parents (but did live at home while a student). –NooAccountWhoDis
11. Live with your parents.
I’m a Millennial, and I was able to afford my first house with 20% down at the age of 25. It really boils down to one thing: Debt-to-income ratio. I graduated college with a high-paying job, and moved back in with my parents in order to eliminate my student loan debt as fast as possible. I ended up living with my parents for two years and was able to fully pay off my loans, save up enough money to buy a new car in cash, and move out with a nice chunk of change saved up.
I’m very debt-averse and don’t buy things unless I have cash in hand. Aside from the normal cost of living (mortgage, car insurance, food, etc) my paychecks go towards making a double payment on my mortgage’s principal each month and savings. –Subverto_
12. Buy something and work your way up.
My wife and I bought a condo in 2004 with a 5% down deal through our credit union (we had enough for the monthly payments, but hadn’t saved a big down payment). It was relatively cheap. It gained a good amount of value, and we sold it in 2019 with enough profit to put 40% down on an SFH. In the two years since the value of our current home has gone up about 20% (though we’re not planning on going anywhere).
Combined we make under $130K/year (and we were making under $90K combined when we bought the first one), but getting in there early with the condo made all the difference, and let us ride equity and sales profits into a new, bigger home.
The key for us, and my recommendation, is to just buy something. Stop paying toward rent if you can manage it, even if you’re just buying an apartment or condo or something small. Don’t try to start with the $800K SFH. Obviously, the down payment is a big issue, but see if your local bank or credit union has programs for first-time homebuyers. –WallyJade
13. Living at home will help.
Currently 29: Saved $100k + $25k from RRSP from 2011-2017 by living at home. My salary was between $45-$63k during this period so it was easy to save the money + 5% employer RRSP match. I still went out, bought some luxury goods, and had some vacations, but half my earnings were typically saved. This was used for our downpayment on a 2 bedroom condo in Toronto (spring 2017).
My wife had zero debt and was able to bring $15k cash + $5k RRSP which covered closing costs and furnishings.
Household income is about $143k and mortgage, tax, and the main fee come to about $3k per month. Plenty left over for vacations, gadgets, and nights out. Neither of us drives though so that is a big cost saving – plus we can rent the parking spot for $1500-$2000 per year on top of our earnings. –Gossipmang
14. The baby doesn’t care about how nice it is.
Gotta start small. I think many people want their first home to be that fancy SFR in Irvine with a good school district for their kids.
My wife and I started with a one-bedroom condo in Santa Ana before our first kid. And we stayed there until the kid turned three.
The couple and baby all packed into a downstairs 1 bedroom in Santa Ana. Yes, it was tight but the baby didn’t care. The baby also not going to school so who cares if the school is any good. My wife stayed home so we didn’t have child care costs.
Luck and timing also played a part. This was 2012 and condos were cheap then. We were genuinely concerned that the value will continue to drop after we bought. But it doubled in just a few years. Can then leverage that to upgrade. We ended up keeping it and renting it out.
If your first aim is too high, you may never hit it. –daddy-the-ungreat
15. You got this.
This is what I did. I saved $12k over the course of 3 or 4 years and then bought the cheapest house I could find in a decent neighborhood.
Us millennials certainly got the shaft when it comes to money, but what else can you do? Set aside what you can and buy a house when you have enough saved for a down payment. –/deleted