Why It’s So Hard For Millennials To Buy Homes

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When I was born, the median price for a house was $108,900. Now, it’s $337,200. Even if you account for inflation, that’s about a 45% increase in cost. But buying a house is
something I would like to do. So I’m trying to figure out if I can. The odds are pretty stacked against me. I’m a millennial, and I
graduated college in 2010, right in the middle of the recession. When I entered the workforce,
the job market was rough. Like many of my peers, I
have student loan debt. And on top of that, there aren’t very many starter or mid-price homes on the market. My personal financial situation has to do with choices I made. I changed careers at 27, I took out loans to go
back to grad school, and I didn’t manage to
save any money before that. But that’s not abnormal
for someone my age. According to a LinkedIn study, it’s common for millennials to change jobs about three times in the first
five years after college. And in the eight years
I’ve been out of college, I’ve lived in New York
City the whole time. Median cost of a home here? $770,000. I certainly can’t afford that. When I look at my income, cost of living and student loan debt, the
idea of buying something as expensive as a house
seems nearly impossible. My dream home would look
something like this. Or this. But even if my boyfriend and
I took our combined income of $100,000 a year, that
apartment is a pipe dream. I went to Business Insider’s own financial planner, Lauren Lyons Cole. I figured if anyone could
help me, it would be her. When you’re just starting out, you can calculate a general price range by taking your annual income
and multiplying it by three. With a combined income
of about $100,000 a year, that means a home that
costs around $300,000 would be a good starting point. – That’s not as bad as I was expecting, but I have no idea what
I can get for that price. – With a budget like
that in New York City, you probably aren’t gonna
find that many options. So you might have to make sacrifices, which could even mean
relocating to another city. But then you have to figure out what kind of job options are there, and how much could you get paid to do the work you want to do. You have to think about which
amenities you really want and which ones you can do without. – I’ve always wanted some
kind of outdoor space, like maybe a balcony. A two-bedroom would be nice… big windows… maybe a turret. What? I’m a millennial. I’m idealistic. – Once you have an idea
of what you can afford and what you’re willing to give up, you can take the next step
and start looking at listings that are available in your price range. – With the budget Lauren
and I came up with, I browsed options in a few cities I could see myself living in. I wasn’t amazed with
anything I came across, but there were some that were nice. Not so much in New York,
especially when I compare it to the apartment I live in now,
which is below market rent. I also checked out Grand Rapids, Michigan because it was number one
on Business Insider’s list of best housing markets for millennials. There I did find some amazing
places within my budget, but I can’t see myself picking up and moving there right now. For me, owning a place
isn’t worth living somewhere where I don’t know anyone and
I don’t have a job lined up. So I think for now I’m gonna keep renting and try to save up for a down payment. Maybe in a few years the price of avocado toast will go down, and I’ll be able to
afford that dream castle. Maybe a balcony… a two-bedroom would be nice… big windows… maybe a turret.

100 COMMENTS

  1. If you got a post-grad degree, you should be making at least $100k yourself in NY city. If you don't want to change cities, that's fine, but don't say you "can't" buy a house. You just don't want to buy a house you can afford.

  2. in addition to the skyline being wrong, the photo shown for Grand Rapids is actually taken in East Grand Rapids with higher cost homes not meant to start out in

  3. Isn’t the problem is that buying a home in a urban area is expensive while buying a home in a rural area… outside of “Gold Rush” areas… middle of nowhere is actually cheap?

    But rural areas is so “old fashioned” and boring according to the people who are moving to cities.

  4. I rented for over a decade. During that time I paid off college, paid off my car, & paid off a large medical bill from when I was diagnosed with a blood pressure condition & now I'm about to sign on my 1st home.

    It may only be a small stick built home valued at $65,000 but I enjoy thinking that just owning is enough to make some of the older generation think I don't exsist. I know a lot of older people who think people in my age group are always broke & live in our parents basements.

  5. Average price for a house is £120,000 in the nearest town to me. I'm a millennial and I'll have the mortgage on my 4 bedroom detached house paid off in the next 5 years. It's only the morons who move to towns with high house prices that can't afford to buy homes.

  6. This has nothing to do with being a millennial. The housing market is rubbish, even if you are renting. Most of the homes for sale in my area are foreclosures.

  7. This woman made poor life choices, eats out in restaurants every other day, has 3 Starbucks drinks a day, goes out clubbing every weekend, owns the latest €1200 phone, two + holidays a year and is choosing to live in the most expensive city in the world.

  8. You mean it isn't directly caused by a panzi scam from criminal banksters and crap builders like nvr Ryan homes who just want to make a quick buck.

  9. Wait a second, you're telling me that after all those years in college you and your significant other only make a combined $100,000 per year? Did he attend college as well? If so that is sad. Growing up I was always told " you will never be successful if you don't go to college", "you won't be able to get a great job unless you go to college" and now looking back on everything I am glad I didn't go. My brother was working for a company prior to going to college and maintained his position during his 4 year attendance at ACU in Texas. This school was very expensive. And at the end of it all, he didn't even go into a career field that he even went to school for. He even filed for bankruptcy because he couldn't afford all the student loan debt. My brother purchased his first home in his early 30's swamped with a bunch of debt. He is doing better now but for a while it was tough for him. Now on to me, I joined the military instead. The military sent me to maintenance schools and leadership courses. I was able to learn the skills to be a light wheel mechanic, wheel and track recovery specialist and attend PLDC and get promoted to sergeant. I even bought my first house at 21 and just paid it off in full back in 2017. I got medically retired back in 2014 and now work for the Department of Veterans affairs as a auto worker making $20+ a hour and receive VA comp at 80%. I can say that the military was my route to success and now I'm 35 getting to buy my second house with my wife before 40. #whoreallyneedscollege

  10. They said if you dream, dream big. But I still prefer a simple house even without a balcony and swimming pool, a small business that I can grow and vegetable garden. A mug of coffee can make my day. No need to buy expensive clothes, shoes or bags. I can take public transportation. Not a big issue.

  11. No one pre plans people are dumb. Stay with your parents and payoff your school instead of paying rent. Then when u graduate u have no college debt and are ready to save for a house . It's what I did.

  12. All I hear is excuses, she even said she couldn’t see herself moving at the moment, all she has to do is be proactive, look for a job, friends come and go but she simply wants to have her cake and eat it too

  13. I am 30, married, have no student loan debt. I grew up very "socially economically disadvantaged" aka poor. My husband and I own a house that we bought shortly after the recession in late 2012 (our local economy was still recovering) ended and got a good interest rate. We purchased a $120,000 house with 3 bedrooms and 2 baths approximately 1980 sq ft. I went to some college, he never attended. Today we make around $55,000 together. We make it work, have retirement accounts and are working on building up savings, which most people I know my age don't have.

    Here's the thing, many millennials were sold this pipe dream that the ONLY THING they had to do to be successful was GO TO COLLEGE (repeat that 10x times) since before they were in high school. Every teacher, guidance counselor, coach and most parents drilled this into them. Taking out student loans wasn't seen to be a problem because along with this pipe dream they were told they would get jobs out of college (if it took that long) making $50K a year and would have the loans paid off in no time. Obviously this was not the case for many of them. So now they are stuck paying these debts and many have to work 2-3 part time jobs (as many employers have cut full time jobs and don't have to pay benefits) to make ends meet. Also many were never taught how to budget so even if they make decent money they have no idea how to manage it.

    I know some people will say "its because of their own bad decisions" and yes in some cases that's very true, but many people aren't really that smart at 18 years old especially when everyone you trust is telling you that this is a NECESSITY.

    I'm not saying it's not their fault but it's not JUST their fault either.

  14. I beg to differ, not knowing anyone is better when you own a home vs having a party at your apt , real friends will travel to see you , I moved from nyc to ga best move of my life

  15. Alot of people my age make around $10-15 an hour and most of us made poor choices and messed up our credit early on. I know its very possible to get a home for 300k if you really try to find a job in your field or learn a trade along with maybe a partner. If you like in NYC then it might be pretty hard to afford a home you would have to have a really good job, some of cali is pretty affordable but nobody wants to live in anything that isn't 30-45min away from LA or SF. I live in Mi so I can live ok with $15 an hour and my S/O makes about the same and I'm almost done with my degree. Its possible millennials we just gotta get creative! Also I'm 100% sure I'm gonna move out of the midwest its kinda boring.

  16. This video was completely useless and the title had so much potential. Could have said a whole lot more on the multitude of reasons why millennials, and soon the younger generations are not able to afford a home.

  17. Try not to by a in the city buy in a small suburb right out of the city 3 bed 2 bathroom for a good 300,000$ to 380,000$

  18. Men youre just buying the house as your temporary dwelling place until the women you married decides she wants a divorce. You've been warned MGTOW !

  19. Everybody is screwed unless you are rich. Housing is unaffordable because income is not keeping with inflation, and supply is not keeping up with demand. Everything is so crazy right now.

  20. Student loans. Other debts A housing bubble. A suppressed job market. Suppressed wages. Jobs being outsourced. Oh my!!!!! This country is finished.

  21. I permanently moved out of my parents' home at age 18 yrs. I had a partial scholarship, get a low interest loan, and worked evenings, nights, weekends, holidays to pay my way through college. I lived in apartments and rental homes until I could afford to buy a small townhouse.
    From this video, I hear that millenials are entitled and are totally out of touch with reality. They expect to do minimal work and receive maximum reward for it. Even worse, their parents are allowing them to sit on their ashes in their homes, living easy and socializing. Kick them out. I worked a full time job along with several part time jobs to just get my little house with a fenced in yard for my dog. Millenials, wake up, get up and go to work!

  22. I'm not gonna lie this why we have to buy homes in the hood and fix em. I see alot of gentrification in multiple hoods where I'm from. And all I gotta say is wow. Ugly neighborhoods turned gorgeous.

  23. Real reason why young people cant afford to live well or own a home anymore: CAPITALISM IS LITERALLY KILLING US

  24. 2:55 I dropped when I say that price! $300k for an 850 sf apt!?! I'm a millennial in Illinois and I'm currently purchasing a house for 171k and it's 1200 sf, 2 bedroom and 3 bath! wow New York should be ashamed of themselves!

  25. jesus christ why the hell do yall americans complain so much i live in a small city with a population
    about 320k
    and the avrage house is $900000 and the avrage wage is only $44000
    so people make around $80000 to $90000
    and we afford a house no problem my great aint and uncle work at a grocery store and make about 35k and thats not alot and they bought a house for 500k so stfu and stop complaining

  26. “I also checked out Grand Rapids, MI” — zooms in on riverfront of Saint Paul, MN… also, I make $45K base a year and own two honestly decent homes. The dream isn’t dead, just public reinforce,ent of hardworking values amongst millennials ( depending on who you ask I am one ). Guess its easier to complain than shut up and just get to work. The opportunities are all over, stop whining.

  27. Cuz Millenials lazy..play video games all day..blow every penny they make…jump job to job like Retards in a candy store

  28. In the late 60's, my dad bought a small house on a huge lot for only $10,000. Today on that very same property, there are two houses that are each now rated in the 2 or so million dollar range. So it went from 10 thousand dollars to 4 million in about 50 years. WOW ! And then in the early 70's you could also buy a Honda Civic for $2,000. Yep, times have changed.

  29. That average is affected by N.Y., C.A. and there are nicer/ richer homes. I bet if you buy a house that is similar to the median house of that time, itd be just as affordable

  30. I like how she says you don't have a lot of options for homes that would cost 300k in NY. You literally have NO OPTIONS today.

  31. You can't compare average home prices without adding in 3 factors interest rests, home size and home complexity.

    In 1988, according to hsh.com, the average 30 mortgage rate was ~10.5% where as now it is 4%. For every $100K mortgage at 10.5%, it will cost the same per month for a $192K mortgage at 4%, so while home values increased by 45% above inflation, the cost per month fell by 25%, though your mortgage is not the only thing you pay, taxes and insurance also when up by 45% because those are based on value not monthly payment. Clearly this is a MASSIVE factor. Note that this also makes it hard to afford the down payment, but once you have the down payment, the monthly costs are lower.

    The median home size went from ~2000sqft to ~2,500sqft from 1988 to today, so that is a 25% increase in home size. Often, homes are reasonable consistent from cost per sqft in the same area.

    And last is home complexity. The areas where the average homes has increased are also the most costly. Half of all homes built in 1975 were built with just 1 bathroom, but by 1990, that fell to just 20%. Today it is close to just 5%. Number of units with AC went from 50% to 80%. Quality of the kitchen, quality of the flooring. A reasonable large part of the difference in cost is do to a difference in quality.

  32. Never buy a home! Just rent one to live ! You will loss all your money at the end 25 years later!

  33. Because banks & investors inflated housing prices & old retiree farts raising home prices so they can live comfortable on their couches …… wake up people the recession is here go check out the yield curve pray & put your money into whichever company getting bailed out

  34. Minmum wage should be like 15 a hour nationwide if u keep up with inflation as of today that whole 7 to 8$ a hour is shii

  35. College… as someone that has went through it for an Associates and got myself a decent job at a container plant, almost done with paying off my debt and while saving extra money for a home,
    is most likely not for you
    don't buy the lie that college is for everyone, because it isn't, that lie has caused colleges to skyrocket in tuition while the value for a degree has plummeted. You are better off in a trade or doing jobs that idealistic pampered kids don't want to do. Work hard, rank high, and you are most likely better off than most people out there trying to pay off debt while still working at McDonald's and living with their parents. Unless you have a serious, in-depth, plan to justify going to college for a long-term career, it's best to reconsider, no matter what your teachers or perhaps your parents led you to believe.

  36. I will only live in Los Angeles, San Francisco, or New York City.

    Because living in one of those cities will make me cool.

  37. You make 100k a year and can't buy a house?! I thought I was rich making $50k a year! I got money out the ass! She doing something very wrong or obviously only wants to buy a mansion

  38. Easy answer:
    Housing is a lot more expensive.
    Student Loan is significantly higher.
    Average salaries are a lot lower.

  39. I would need another full time job to afford prices of living over here in Ireland. Or get married…..probably both

  40. first of all, don't go to get advice from someone who uses books to elevate a monitor? @ 1:35 https://youtu.be/Zzx-QEgv-gw?t=97

  41. Canadians, count yourself lucky that large landed homes like the ones featured in this video cost C$300,000+. In Singapore, a 600 sq ft suburban freehold apartment may cost US$1,000, 000 or more – and yes, a 300 sq ft apartment in Hong Kong would cost no less!

  42. Same here for mediocre in Jakarta. New marriage couple, they afford mortgage house not in capital city, took commute minimal 1,5hr to the center of the city.. The price for property Around IDR 300m-500m/ $20k-35k term of lease 15-25 years. Installment : IDR 3-5m/$250-350/month. The installment samekind the national average salary. The purchase power low. Getting worse with Millennial attitude which likely to change the job. Means unstable fix income. So, i don't know where it's going.. But I don't mind to rent, if i urge one day perhap i will build tiny house on wheels. Even it's not common in Indonesia

  43. Oh just a casual income of $100 000 what about the majority of us doing 60 hr weeks who are earning $20 000 – $30 000 a year huh ?

  44. "Don't live in NYC if you can't afford it!" Yet this is what the jobs in NYC are paying. Where is the city going to find its work force if all the average and lower income residents leave due to high housing costs? People like to blame city dwellers for living outside their means, but ignore the fact that the city NEEDS those people there to fill jobs. They just don't pay enough for their employees to afford to live anywhere near those jobs. If people really did just up and leave to cheaper locations the city would be in a workforce crisis.

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