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Businesses The Almighty Buck

80% of Millennials Say They Want To Buy a Home -- But Most Have Less Than $1,000 (cnbc.com) 594

Posted by msmash from the reality-check dept.
An anonymous reader writes: Millennials aren't buying homes in the same numbers as previous and older generations, but it's not because they don't want to. The vast majority of millennials do indeed aim to buy someday, or would even like to now if they could. Unfortunately, the numbers don't look good. New data from Apartment List shows that, although 80 percent of millennials would like to purchase real estate, very few are in a good position to buy, largely because they have nothing saved. According to the report, '68 percent of millennials said they have saved less than $1,000 for a down payment. Almost half, or 44 percent, of millennials said they have not saved anything for a down payment.'
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80% of Millennials Say They Want To Buy a Home -- But Most Have Less Than $1,000 More

80% of Millennials Say They Want To Buy a Home -- But Most Have Less Than $1,000

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  • What a coincidence (Score:5, Insightful)

    by American AC in Paris ( 230456 ) on Friday May 26, 2017 @03:22PM (#54493249) Homepage
    I'm sure this is completely unrelated to the previous article about our booming gig economy

    • Re:What a coincidence (Score:5, Informative)

      by ranton ( 36917 ) on Friday May 26, 2017 @03:47PM (#54493477)

      What this article also missed is that nearly 60% of all Americans don't have enough savings to cover a $500 - $1000 unplanned expense [cnn.com]. This article is trying to make this a Millennial problem, but in truth it is just a reality of the majority of all US households.

      • Re: (Score:3, Informative)

        by thegarbz ( 1787294 )

        That's just it. 80% of millennials have less than $1000 "FOR A HOME DEPOSIT". I'm sure they can tell me all about it when I meet them on their yearly international holiday on the beach sipping margaritas, or when they invite me to their expensive inner city rental for a nice fresh pressed juice from their $400 juicer.

        Yes the specifics of the examples are facetious. The value however is not. There's about as many articles discussing the millennial trait of living for the now as there are articles talking abo

        • Re:What a coincidence (Score:5, Insightful)

          by Jfetjunky ( 4359471 ) on Friday May 26, 2017 @04:56PM (#54494153)
          I'm guessing you didn't look at the article linked... Where it clearly says Millennials actually were more likely than others to be able to cover a $500 unexpected expense. We can speculate why, maybe lack of kids or something, but 47% of Millennials say they could cover it vs the 37% overall average.

          Also, as a Millennial, I prefer to have a couple months salary of savings, for obvious reasons. I have a budgeted amount that goes to savings every month, and I get quite agitated if for some reason I have to use it for something else. But that usually stops me from drawing it from savings, so it's a wash really.

          And what's that about parents? Oh yeah, I pay their cell phone bill and have paid for other things that come up because they blew every cent they had.

          My criteria for "affording" something is "can I do that AND still put away my monthly savings". If the answer is yes, then I don't feel bad about doing it. I've denied myself plenty of things because the answer to the question was no, but that's the price I pay for financial security.

          Aside from that, I'm not so naive as to think everyone has it as easy as me. However, I know from experience that if my earnings were reduced, I would scale the savings also and my criteria would stay unchanged.

          • Re:What a coincidence (Score:4, Interesting)

            by serviscope_minor ( 664417 ) on Saturday May 27, 2017 @03:05AM (#54496367) Journal

            Also, as a Millennial, I prefer ...

            I say this as a late gen Xer, that what, as a millenial, you are missing is the appeal of good, old-fashioned ageism. There seems to be nothing more fun for some people to basically aggregate every thing they dislike that they've ever seen or heard of a young person doing, assuming that all young people do all of them, blaming you therefore for doing them and then getting to feel entirely superior to you because they are too smart to do all of those things.

            It's very appealing because you don't have to be more clever, richer, more virtuous, more experienced, skilled or really anything to feel superior to whole swathes of the population. You simply have to be older, which is free and easy.

      • Re:What a coincidence (Score:5, Insightful)

        by cayenne8 ( 626475 ) on Friday May 26, 2017 @04:37PM (#54493965) Homepage Journal

        What this article also missed is that nearly 60% of all Americans don't have enough savings to cover a $500 - $1000 unplanned expense [cnn.com]. This article is trying to make this a Millennial problem, but in truth it is just a reality of the majority of all US households.

        I guess the last couple of generations for some reason, weren't taught to budget, and save most of your money....that luxury items like the latest phone or $$ Nike's or whatever were meant to be saved for only after you save everything else for a rainy day or things that matter.

        And...if you don't make enough money after living and saving as you need to, then you DON'T get those luxury items, you are not entitled to them, hence the term "luxury".

        • Re:What a coincidence (Score:5, Insightful)

          by alvinrod ( 889928 ) on Friday May 26, 2017 @05:02PM (#54494203)
          Also, how many of them are getting a $4 coffee here, buying a new $50 video game every month, and plenty of other small regular expenses that add up to a significant amount over the course of a year. You don't even need to buy luxury items to piss away a lot of money. I think that this ties into the notion of not budgeting properly, because if you sit down and do this, you realize just how much you can save.

          And it's not like saving money means you have to give up everything. I buy beans in bulk and make me own coffee every morning, buy games or movies when they go on sale and have a co-worker who just borrow movies from the library since they stock more than books now.

          • Re:What a coincidence (Score:5, Insightful)

            by david_thornley ( 598059 ) on Friday May 26, 2017 @05:43PM (#54494507)

            If you piss away $100/month, you're pissing away $1200/year. That's not the kind of money that allows you to buy real estate.

            Luxuries are a lot cheaper than they were, and things like houses and college educations are much more expensive. Hence, people spend money on different things than when I was a kid.

      • Re:What a coincidence (Score:5, Interesting)

        by ShanghaiBill ( 739463 ) on Friday May 26, 2017 @05:35PM (#54494435)

        Indeed. I got my first job in the 1970s. I clearly remember many of my co-workers constantly complaining about being broke. Financial incompetence is nothing new and I have seen no evidence that it is worse with millennials.

      • I wonder how much this has to do with bank saving accounts and money market funds paying interest below the inflation rate. In this environment, the rational choice is to put your money elsewhere, like stocks and bonds, to avoid losing purchasing power. When surveyed, people rightly consider these investments, not savings.

        In which case they are not being as irresponsible as is being reported, but rather making the rational, smart choice. Even buying stuff to stockpile now is better than leaving your money i

  • Priorities (Score:5, Insightful)

    by WoodstockJeff ( 568111 ) on Friday May 26, 2017 @03:25PM (#54493279) Homepage

    "68% of millennials have saved less than $1000 towards a down payment on buying a house."

    But probably 100% of them have spent twice that much for a smart phone and data plan within the last year.

    Not to mention games.

    • Re:Priorities (Score:5, Insightful)

      by Anonymous Coward on Friday May 26, 2017 @03:36PM (#54493367)

      "68% of millennials have saved less than $1000 towards a down payment on buying a house."

      But probably 100% of them have spent twice that much for a smart phone and data plan within the last year.

      This sounds a lot like that statement from whoever-it-was about paying for healthcare by giving up phones. How many times do I need to not-buy-a-phone before I have enough for a down payment on a house? Besides that, who budgets $2k/yr for a data plan?

      • If the downpayment is $10k, you need to not buy a new unlocked high-end smartphone approximately 20 times. If you otherwise would've bought one every year, you'll be able to buy a house by the time you're middle-aged, and then maybe the year after that, you can own a smartphone!

        I've never kept a phone for less than 5 years so far, so it'll take me longer.

      • There are lots of other discretionary expenses people can reduce or cut.
        • cable TV subscriptions
        • Internet plans at a higher speed than you really need
        • easing an expensive car you can show off instead of buying one more practical
        • buying a new car instead of a used car
        • replacing a car after using it just 3 years
        • getting a new computer and GPU every 3 years instead of 5
        • getting a new TV every 5 years so you can upgrade to something 5 inches bigger
        • upgrading your iPad device every 2 years
        • driving alone in your

    • So surely you don't have a smartphone then, since they are such a waste?

    • I mean, 68% of millennials are under the age of 30, right?

      And 44% are under the age of 25?

      I mean, assuming the range of 1981-2000.

      These numbers don't seem terrible unless you're a boomer who could get a good paying factory job out of high school or something.

    • I'm not a Millennial, I'm Gen-Y, but when you're living in an ever-increasingly dystopian world, what's the point in 'planning for the future'? That's how I think they're seeing things.

    • Maths are hard (Score:5, Insightful)

      by rsilvergun ( 571051 ) on Friday May 26, 2017 @06:21PM (#54494723)
      If you trade your old phone in you get a new one every year for $500. I'm not going to talk about the service fees because, like cars, we've made cell phones a necessity. If you don't have one you're marked as weird and will have doors closed to you.

      Now, $500/yr sounds like a lot if you can't do math. Lets say our Hypothetical Millennial buys a $100 phone and replaces it every 2 years ( I own cheap phones, they start getting crashy and failing in about 2 years). They're saving $450/year now. They need $40k for a down payment on a 'starter' home in a city with a job market (it's not good living in a place where I can buy a house for $40k if I can't get a job to pay for it). 40,000/$450 = 88 years.

      Nows the part where you point out their coffee is $5 bucks a day or about $1800/yr. With our savings from our cell phone that's just 17 years to get our starter home. Of course, there's this little thing called inflation and this other little thing called Wage Stagnation. So in 17 years our plucky Millennial's savings are worth about 3/4 what they were (I'm being _very_ charitable here with my math).

      The working class isn't being lazy or loose with money. Anyone who tells you that is either a rich man that wants to pay low wages and no taxes or one of their lackeys. Spend a few minutes, do the math, and you'll see that. But that would mean confronting some really, really unpleasant realities. It would also mean you don't get to look down on Millennials anymore...

    • Re:Priorities (Score:5, Insightful)

      by afgam28 ( 48611 ) on Friday May 26, 2017 @06:30PM (#54494771)

      This idea seems very common - if only Millennials would stop spending so much, and start saving up like their parents' generation, they would be able to afford a house.

      Where I live, the house price to income ratio is double what it was in 1985. This means that young people need double the income that their parents had, to buy the same home.

      In this case, it isn't that they're spending too much - it's that houses are too expensive relative to the jobs that are available.

  • I can, but just missed the last bubble (Score:4, Interesting)

    by Anonymous Coward on Friday May 26, 2017 @03:26PM (#54493283)

    I'd prefer to wait till this new bubble pops. Millennials being this poor is a bad omen for the future economy, and prices will fall accordingly.

    • I didn't buy a house until later in life. Not so bad...but I saved and paid cash for it.

  • I wish I could point and call them irresponsible, (Score:5, Insightful)

    by pecosdave ( 536896 ) on Friday May 26, 2017 @03:28PM (#54493303) Homepage Journal

    but I look at the turnover rate at companies these days and I realize stable employment is nearing a thing of the past, especially for younger people starting out. I don't care if they want stable employment, they're probably not going to get it. I look at what percentage of my own income rent is, then my health insurance which is nearly as high as that. Even without any revolving entertainment bills like over-priced cable there's not a huge amount left if you're regularly employed, and if you're someone who has to constantly search for the next gig and have to be prepared for a dry spell there's even less.

    We need to get a little government out of employment, the rates companies have to pay big brother (which includes healthcare and other mandatory funds) to actually employ people makes it difficult to keep someone around when you don't have a specific pressing need.

    • Re:I wish I could point and call them irresponsibl (Score:5, Interesting)

      by beheaderaswp ( 549877 ) * on Friday May 26, 2017 @03:44PM (#54493447)

      I would mod you up for being reasonable and intelligent...

      Though I disagree a little bit. There are places you can hide and stay stable for long periods of time. Try doing IT for a stable manufacturer. They are out there. That's what I did.

      After spending time in the "big league IT world" in, or associated,with silicon valley, I decided my last job before retirement would be at a successful commodity manufacturer. It worked. There are people here who have worked for 40 years in this company.

      Though I did a lot of research of the local companies before trying for a position. And when I got the position it was as a tech rather than my usual executive/IT Director type gig. It's a big pay cut. I have good benefits. And drive 12 minutes to work with no traffic in a small town setting.

      Successful manufacturers are hurting for IT people.. especially outside of major cities. They regularly promote from within, pay a lot less, and exist in rural or semi-rural areas.

      Seems to me my lifestyle is about the same as it was in San Jose or Cupertino. A movie, popcorn, and a drink is less than $10.00 at the first run theater.

      But the fun part? If you've held some decent positions and come out to the country with a fat resume.... suddenly you are a very big fish in a small pond. It's nice. And if you are struggling in a major metro area.... the undiscovered hinterland is bleeding for talent.

      Keep an open mind... It's out there...

      • I would like to go to a more rural place. Even with a pay cut I could do better than if I continued to live in a metropolis. I seriously considered some "stationed" out of the country rotate in and out work, but with a toddler I can't, and with a child from a previous marriage I'm pretty much held hostage in the city I'm in. I've given some serious thought to finding a place in flyover country, some old has-been town that happens to be on some fiber backbone and setting up my own data centric business wh

    • Employment is rarely stable, even in past generations.
      But you're making another mistake - without the government doing anything, most larger companies are paying the health care costs anyway. If you're trying to be competitive when hiring employees, the very first perk you're going to have to show is a medical plan. Without the plan the only employees you're going to get are those who couldn't get a job elsewhere.

  • First Time Buyers (Score:3)

    by WrongMonkey ( 1027334 ) on Friday May 26, 2017 @03:29PM (#54493315)
    The article talks about a 20% down payment. But I don't know any first time home buyers who actually pay that much. FHA loans require 3% for a down payment. Many cities, counties and states have additional programs that will provide additional assistance. Washington state has a down payment assistance program that will give you a second mortgage loan up to 4.00% of the total loan amount with 0% interest and payments deferred for 30 years.

    • My wife & I used the USDA loan program a couple years ago, and bought our first place with 3% down & the seller paying closing costs.

      Would we have liked to have 20%? Do we understand why that would be better financially than what we did?

      Yes on both counts. But, to us the trade-off was worth escaping the hideously high DC metro area living costs...and things worked out to where the mortgage is literally the same as the rent payment we had paid for 4 years after moving here - and thanks to the low dow

    • The problem is that in many places the interest you will pay on a mortgage for the cheapest available home with only 3% down is higher than the cheapest available rental alternative. You can't buy small enough homes. People are living out of bedrooms in other people's houses and struggling to make rent even there. You can't buy one of those. I'm living in a tiny mobile home that I own outright... on rented land, a tiny parcel of rented land the like of which you can't buy anywhere. The mere interest on a mo

    • I had to have 10% down I think for my condo, and only that low because of a good credit score. Paying less down means you end up paying lots more points which is more expensive in the long run.

  • The Millennials Are Alright (Score:4, Insightful)

    by American AC in Paris ( 230456 ) on Friday May 26, 2017 @03:32PM (#54493335) Homepage
    As A Gen-Xer, I gotta say that the Millenials are doing a helluva lot better job at living than our generation ever did. Lay off 'em.

  • I'm sure this is due to all the avocado toast. (Score:4, Interesting)

    by JoshuaZ ( 1134087 ) on Friday May 26, 2017 @03:35PM (#54493363) Homepage
    Remember, Millennials lack money not due to a lack of jobs https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/ashleystahl/2015/05/11/the-5-4-unemployment-rate-means-nothing-for-millennials [forbes.com] https://generationopportunity.org/press-release/millennial-unemployment-rate-stagnant-at-12-8-percent/ [generation...tunity.org] and not due to a lack of job security or stability http://www.gallup.com/businessjournal/191459/millennials-job-hopping-generation.aspx [gallup.com]. And this isn't at all connected to the fact that most of them entered the workforce during the most serious economic downturn since the Great Depression. No, the problem is that millennials are too busy buying avocado toast http://money.cnn.com/2017/05/15/news/millennials-home-buying-avocado-toast/ [cnn.com]and the like. Never mind that millenials are more frugal than other generational groups http://www.nbcnews.com/business/consumer/famously-frugal-nearly-40-percent-millennials-will-stash-their-tax-n731076 [nbcnews.com] https://www.bloomberg.com/news/articles/2014-04-25/millennials-are-careful-frugal-shoppers-who-buy-for-the-long-term [bloomberg.com]. No the real problem must be some sort of failing on their part. Like how some of them bring parents to interviews or some other failing, http://www.huffingtonpost.com/2013/09/11/parent-job-interview_n_3907447.html [huffingtonpost.com]. Let's ignore that that the claims that a whole 8% were doing so would include things like a parent literally just driving the poor millennial to the interview. It really must be their fault.

    Disclaimer: I'm one of these terrible, no-good, lazy, overspending millennials. I have actually a pretty good job situation, but that doesn't mean I'm going to lie to myself that somehow I've done better because I'm somehow a better person. I've been very lucky, and a lot of millennials are being screwed over through no fault of their own at all.

    • I also think we need to stop using millenial (Score:4, Insightful)

      by Sycraft-fu ( 314770 ) on Friday May 26, 2017 @04:37PM (#54493981)

      Or at least get a concrete definition, because it seems to just mean "those damn kids" at this point. The year range is extremely hazy, and ever expanding from what I've seen. Originally what I saw was people born from 1982-1995, 82 because that's the first year that would be the graduating class of 2000 and hence the name. However as of late I've seen it defined as broadly as 1980 up until now.

      Ok well first off it seems rather silly to include almost a 40 year period as a "generation" since there would be many children literally in the same "generation" as their parents which makes no sense (a family generation is offspring). Makes the term pretty meaningless.

      That aside if you are going to define it so broadly, then you can't make any generalizations about said group since they are very different people and faced very different problems. I'd be a "millennial" by that definition, but I'm 37. I've been working professionally for over 15 years, when I got in to the workforce, the big depression hadn't happened, when I went to university costs hadn't gone nuts, I've owned a home for a decade, etc.

      So the experiences I've had have little in common with our students who are 18-22 and will be entering the workforce soon. They get called "millennials" too which would maybe be accurate for the tail end of the initial definition. What they are going to deal with going in to the workforce is very different then what I had to, and their school has been WAY more expensive because the state has been cutting tax money to public schools for over a decade.

      So I think the media bitching about millennials needs to stop at the very least until they can work out a concrete definition of a "millennial". Stop acting like everyone under 40 is some kind of homogeneous group, it is absurd on the face of it.

  • How much are they making? (Score:2)

    by Anonymous Coward

    I'm 33, and just bought my first house a couple months ago. I had $140k saved up for the down payment/closing costs. I saved that money while having a salary that slowly grew over 11 years from $48k to $75k. If you live frugally and make half-decent money, it's easy to save. Some people need a crash course on budgeting and self-control.

  • Most politicans say they want affordable housing (Score:5, Insightful)

    by istartedi ( 132515 ) on Friday May 26, 2017 @03:46PM (#54493465) Journal

    Most politicians say they want affordable housing, but when we started to get it during the so-called "crisis" of 2008, all everybody did was bitch.

    The housing collapse was the very definition of housing becoming affordable--prices dropped dramatically.

    The cognitive dissonance on this issue never ceases to amaze me. You can blame the banks, and they bear some of the blame but not all of it. You can blame the NIMBY phenomenon, but that's not the whole picture either. IMHO, the core of the issue is that housing is a leveraged "investment", and that creates structural issues that encourage it to be expensive.

    If a significant percentage of your net worth is in your house, you are strongly incentivized to do everything you can to make housing expensive in your area.

    The banks are encouraged to make housing expensive, because cash purchases are for the wealthy only, and the rest of us pay interest.

    Local governments are incentivized to make housing expensive because property taxes are based on assessed value.

    There is, IMHO, no *technical* barrier to supplying a house for less than $100k almost everywhere in the USA. In a few special places you can argue that flooding the market with a supply of cheap housing is not possible due to resource constraints; but that's not true in most parts of the USA.

    Every once in a while, somebody does actually supply cheap housing. It's like an elm sprout in the forest. As soon as it springs up, the structural fungus of our NIMBY, Leverage, debt-financed, assessed value taxed housing system attacks it and it dies.

    • Re: (Score:3, Insightful)

      by Major Blud ( 789630 )

      This. Whatever happened to buying a home and then living in it until you die? I understand that you may have to relocate to find work, but that's different than just buying a house that you're treating as a financial instrument instead of a place to sleep.

    • Houses ARE cheap to build and ARE cheap.

      What is so expensive is THE LAND. Especially in metro areas in any of the big cities.

      I live downtown SF. A million dollars only gets you a tiny studio here, because the demand to live here is so incredibly high and land is limited.

    • I wish I could upmod you but I've already posted upthread. This is the most insightful post in this thread.

  • Gen-X Homeowner here... Ownership is Overrated (Score:5, Insightful)

    by slacktide ( 796664 ) on Friday May 26, 2017 @03:51PM (#54493515)
    I've owned my house for about 15 years now, bought it when I was 26. Home ownership has a lot of disadvantages that I didn't consider when buying.

    The amount of maintenance, both scheduled and unscheduled, that a home requires has proven to be a lot more than I expected or budgeted for. I'm a pretty handy DIYer, and even at that I get overwhelmed sometimes with deferred tasks. It eats your time if you DIY, or your money if you hire it out. I'm quite certain that I am not financially ahead, compared to if I had been renting, and I'd certainly have a LOT more free time.

    You loose a lot of flexibility by owning a home. The transactional costs of buying and selling mean that it is difficult to justify moving to a new job in a different area, or even to relocate to a more convenient location in the same metro area, unless you know for sure it will be at least a 5 year gig. I have turned down interesting job opportunities for this reason. At the time I bought my home, I was a 10 minute bike ride from work. Then my division of the company "temporarily" relocated (We were told 2 years, then 3, which turned into 5) my department to the other side of our metro area (25 miles), and I had a 1 - 1.5 hour car commute. If I were a renter, it would have made sense to lease in the "temporary" location for a while.

    Finally, as a homeowner you are more exposed to swings of the market. I got lucky when the bubble popped, as I had bought in a good bit before it, and had no need to sell at the low point.... but I had friends who lost their jobs, and had to relocate across the country, and HAD to sell when the market was depressed. Some lost over a hundred thou on that deal.
  • Graduate from college, and rather than buy that $6 latte every day, put it away in a DJIA index fund. When you retire at 65, you'll have over $1 million. Then you can retire wherever you like...

    • Re: (Score:2)

      by AVryhof ( 142320 )

      I have a nasty feeling that by the time I retire, with inflation, $1 million won't buy quite as much as $1 million will buy today.

    • Re: (Score:2)

      by fermion ( 181285 )
      This is a well refuted urban myth.

      I do get the point. People waste money. But really they don't. For instance my cell phone bill isn't much more than a land line cost me 30 years ago. In 1970 I can see people paying a buck for a cup of coffee, which is what is costs now inflation adjusted at Starbucks.

      On the other hand, people regularly bought houses for $25,000 in 1970. Today such a house should cost no more than 150,000. For such a house you need to scrounge up $10,000 and maybe $700 a month. B

  • Oh, sure, blame millennials (Score:3, Insightful)

    by Kierthos ( 225954 ) on Friday May 26, 2017 @03:54PM (#54493545) Homepage

    Part of the problem is that the housing market is out of whack.

    Using data for 1972, when you compare median household income and median house price, the house price is ~325% of the income.

    Using data for 2015, when you compare median household income and median house price, the house price is ~525% of the income.

    Just a bit of difference there. Now, part of that is different (more exacting) house construction standards, increased costs of construction materials, and so on, but that much of a difference?

    Yes, some millennials have poor spending habits and poor savings habits. But the increased cost of houses also plays a part. Not to mention student debt. (And DeVos seems to give not a single fuck about that.)

  • at $5 a day it'll only take 20 years to save up the $40k downpayment for a typical 3 bed/2bath house (good thing housing prices aren't going up faster than inflation so that $40k won't be the equivalent of $20k in 20 years...). Or if you're Australian skip the Avo-Toast.

    Oh, and in case anyone is wondering the reason home prices are sky rocketing is cuts in government infrastructure spending. The government was putting up the money to do the expensive stuff to get the land ready for home building so that

    • $125/mo starbucks (~$5/day)
      $50/month cable (or hulu+netflix+etc)
      $15/month MMO (or $45 if you are an addict and paying for 3 MMO accounts)
      $220/month car insurance (full coverage for a 20 year old is about $2600/year)
      $400/month car payments (because you wanted a brand new car and got screwed on the interest rate for the loan)
      $200/month on take-out (a big underestimate, at one time I was spending $700/mo on eating out and take-out for 2 people)

      That's $1010/month that can probably be reduced or eliminated, that

  • And they still have options, too .... (Score:3)

    by King_TJ ( 85913 ) on Friday May 26, 2017 @03:58PM (#54493593) Journal

    With no money down, it's still possible to get a USDA loan for a home. The "catch" is, you're going to have to select a home that's in one of the designated "rural" parts of America (as well as meeting some other criteria like having a reasonable debt to income ratio).

    But USDA loans aren't just for buying farm-houses .... You might be surprised how many places qualify for one. You just have to consider a home that's outside a major city to have a shot at it.

    You can't really avoid "closing costs" because the parties doing all the paperwork and making the sale happen want their cut. But this is negotiable too. Many times, a motivated seller of a pre-owned house will agree to pay all closing costs as part of the deal.

  • Welp (Score:3)

    by OrangeTide ( 124937 ) on Friday May 26, 2017 @04:17PM (#54493777) Homepage Journal

    I guess you're renting.

    FHA loan will let you do a 3.5% down payment if you have decent credit. Still, 3.5% on a $300K house is over $10K. It will take a couple years of steady job and scrimping and saving, but it's a feasible goal for many people. Things get more complicated if you absolutely must have a house in an expensive location, getting mortgages for $700K+ homes with very little down is unlikely unless you have a huge income. (dual income would help, I guess find a spouse that makes as much or more than you)

    I didn't really have any money saved up when I was in my 20's either, but I have a house now (in Silicon Valley). I got into a groove in my late-20's/early-30's and was able to keep credit cards under control, paid off the car and kept it for several years (no car payments), car insurance got a lot cheaper, job paid more with more experience under my belt, and lots of other factors contributed.

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