IDAHO, USA — Owning a house has long been part of the 'American Dream,' however, owning a home is not as straightforward as it used to be. In the U.S. empty-nest baby boomers own 28% of the nation's largest homes and millennials with kids only own 14%, that is twice as many according to Redfin. The cost of living coupled with the cost of a first-time home has risen and that is forcing many younger generations to save money by living with their parents and even getting their parents to co-sign.
Zack and Emily Kessinger have wanted a home of their own for a long time but like many other Idahoans their age, i.e. millennials, they realized they would not be able to buy a house unless they made drastic changes.
"I definitely feel like there's also a little bit of frustration, like you look at our generation and the challenges we have going to the into the housing market is so different than like our parents generations," Emily said. "I don't have any friends that own a home, or is in the position to own a home. We currently live with my parents in Boise."
The couple only planned on living with Emily's parents for one year to save enough money to buy a house. Then the market took a turn and one year turned into three.
"I think as an adult, you don't necessarily have the idea of living with parental figures at this age or for this long," Zack said.
This trend of trying to save by moving in with parents is happening to millenials across the country. Nick Smith, the owner of JPAR-Live Local a real estate brokerage, said that a lot of younger people are willing to move back in with their parents to save money and own a home.
"Americans still really, really value, the idea of owning a home. And they understand that it's a sound investment, and they're willing to make some big sacrifices to make that happen. And I also think that we see on the other side, too, as a parent, the parents are willing to say, hey, this is how I can help out my kids," Smith said.
Census statistics from 2000 to 2002 found 15% of millennials aged 26 to 41 are living back at home with their parents as they grapple with housing costs. The millennial generation is described as being born between 1981 and 1996, baby boomers are born between 1946 and 1964, Gen X is born between 1965 and 1980 and the Gen Z's are born sometime in the mid 1990s to the mid 2010s.
In Idaho, realtors like Mike T. Williams and Justin Murillo at Amherst Madison are noticing a difference in how the generations are navigating the housing market. Williams said the baby boomers have a stronghold on the market.
"They essentially have more options. I mean, yeah, if you have a ton of equity in your property, you can maybe get a HELOC or you know, do a loan to get some of it to actually go buy an investment property. Or you can take all that equity and just roll it into a smaller house." Williams said. "They essentially have more options. I mean, yeah, if you have a ton of equity in your property, you can maybe get a HELOC or you know, do a loan to get some of it to actually go buy an investment property. Or you can take all that equity and just roll it into a smaller house."
Murillo added the time most boomers were buying their first house the average salary or household income was enough to purchase a home.
The median price for a home in Idaho is $470,000, a price tag not everyone can afford. Further, in the state the median income for a single person is $28,757, per household is $58,915.
Smith from JPAR agrees. He said the boomers are less affected by the interest rate and that affects millennials trying to enter the market.
"They're putting a large sum of money down and it's affecting their payment less," Smith said. "One of the things that's really interesting right now for all buyers in the market is because interest rates were so low for so long, we've locked people into homes. What we're seeing is people aren't willing to change their 2.75 interest rate for an interest rate at 6.5 and $100,000 extra in payment. And so what they're doing is they're not moving. By not moving, they're freezing the inventory. So there's not homes for people to purchase."
For those younger people that do find a property, many are having to also find a co-signer.
"I bought my house about a year and a half ago, and I had my mom cosign on that property, and I have a lot of friends and people around my age 26 to 33, that still definitely bring in their parents to cosign on a property because the mortgages are more expensive than they used to be. You have higher prices in the valley, and you have higher interest rates than we've seen in a long time. I would definitely say if the option is there, and your parents are willing to do that for your friend, why not?"
Murillo said people are finding they have to be opportunistic when buying. Further that a lot of younger generations are first-time buyers with limited income compared to boomers who may already own their house outright, giving them more opportunities to invest.
"Predicting the market is very difficult to do. And the overall arching housing market has a lot of variables that can change and just one of those variables changing can create a little pocket that was better than the last to get into a property. That being said, you might have to be creative, and get a cosigner or try and get someone to help you or buy it with a friend," Murillo said.
When Smith began selling real estate 20 years ago there was a big difference in the market.
"I was a student at Boise State when I started working in real estate. And I was selling homes to other students," Smith said. "I built a whole real estate career selling people houses that I had classes with and so it's just transformed over the years as far as accessibility for younger people to get into a home."
Smith said the blessing in disguise is that prices are stable.
"We're not seeing prices go up and down," Smith said. "They're just kind of riding at a level."
For Zack and Emily, their sacrifice is finally paying off after three years. They are building a new home and will move into it at the end of May.
"It may seem like it's out of reach. But it's definitely it's there. If you just look for the resources, they're out there," Emily said. "You definitely have to make sacrifices like no newly married couple wants to live with their parents. And it's something that you have to make the sacrifice to be able to move towards what you want."
By scrimping, saving and living with their parents for three years... They can afford the 'American Dream.'
"It makes it all that much sweeter and feels like you earned it even more a little bit,' Zack said.
The couple said they were embarrassed at first to tell people about their living situation but they said most people praised them on saving and being smart with their money. Now, Emily said she tells people freely because it has been such a blessing for them.
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