TradeTravelJournal.com | Can Saving on Avocado Toasts Buy a Millennial a Home? | Among the many things millennials are doing differently than other generations, one of the main things they’re foregoing is buying a home. Twenty to thirty-year-olds are purchasing homes 8% less frequently than children of post-war Americans and gen Xers at a similar age.
Without a home of their own, 22% of 23–37-year-olds live with parents, compared to only 11.5% in 2001. In addition, millennials are delaying starting a family. The average age of first-time mothers is 26, compared to 21 in 1976. Millennials simply aren’t hitting the same major milestones in life as previous generations. Despite the criticism they get, that is likely not their fault.
While many might see this as evidence of how much more expensive homes are these days, others criticize millennials for not being as financially prepared as other generations. Some say millennials grew up on smartphones and the internet, and aren’t used to hard work or struggling through problems.
It’s true they’re marrying later, taking on pets rather than kids, and living with their folks longer. However, this doesn’t mean that millennials’ are frivolous spenders who would rather have the latest iPad than save for a home. Millennials work just as hard as other generations. 40% of millennials hold a college degree, which makes them the most educated of any generation. Unfortunately, due to the skyrocketing rates of student loan debt, this also means they carry a lot more debt than previous generations. The average college grad owes over $20,000 in debt. When you consider that some graduates struggle to find a job, or a well-paying job even after their education, it makes sense why they’re delaying home-buying. The cost of housing has increased 47 percent in just the last six years, while compensation has increased by just 16 percent.
Recent college grads may love their brunches and pets more than other generations, but that doesn’t mean they’re at fault for not being able to afford a home. To look into this further Turbo calculated exactly what difference it would make if millennials stopped buying all the things they get flack for purchasing and found the answer is — not much.
Take avocado toasts, the infamous millennial vice, for example. At an average of $6.78 each, it would take 36,443 avocado toasts to buy a home. It would take 78,439 Starbucks coffees, or 24,733 months paying for Spotify for someone to afford a home today. The only thing that equals the cost of a home? A child. Now it makes more sense why millennials are starting families later: they simply can’t afford to. Yet that doesn’t mean millennials can’t have homes. If you use a local bank like SouthStar Bank then maybe they can offer you a good deal to get started on your house purchasing journey.
For more insights on what vices are (or aren’t) really costing millennials, check out this infographic below by Turbo.
If you’re a millennial struggling with affording a home, here are some tips to make it just a bit more affordable.
1. Use the Snowball Method
Maximize your debt payoff by focusing on your highest-interest debt first. This helps save you a ton of interest.
2. Save for 20% Down
Know how much house you can truly afford, and avoid pricey private mortgage insurance
3. House Hack
Afford a higher mortgage by renting out a room or two. This essentially means you have someone else pay for a portion of your house.
4. Get Competitive
Be a great candidate and secure the best deal by getting pre-approved for a home loan.
5. Put in Sweat Equity
Get a place for a steal, and then make it livable. Though it may take a big commitment of time and energy, with a bit of strategy, you can end up with a place worth much more than you started with.
6. Recruit a Real Estate Agent
Knowing the ins and outs can save you a ton, so have an expert on your side. They can ensure you get the best deals or make offers in just the right places.
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