Home Ownership & Millennials
Owning a home has been one of the most significant goals for families since the beginning of time. Accelerated after WWII, with home kits from Sears to mass produce homes with minor differences - side by side made the concepts of homeownership more affordable. So much has changed over the last 70 years, but home ownership is still one of the great achievements to accomplish in life. But, Millennials as a whole, seem to embrace “today only” with little regard for 20, 30, or 40 years down the road. Living for the moment has become their anthem - more so than any generation before them!
Today, homeownership costs are much higher than ever before; $12,000 - $15,000 has to be added during construction as “impact fees” by nearly all counties and cities. Newer building codes have added considerable costs as well. And of course, the cost of materials and labor continues to rise due to inflation. Forty years ago, we built a good number of 1200-1800 square foot homes, on generous size lots. They were well-built and the cost averaged $32 per square foot. Today’s cost to build is 5 times that - or more! Mant times there are additional costs of Home Owner Association dues, higher tax rates, and the inflated costs of utilities and maintenance expenses. Yes, it truly has become much more expensive and harder for the first-time buyer trying to achive the dream of owning a home.
As an older person who builds homes for a living, it saddens me to see so many young people, in long-term rental situations. Apartment construction is leading the nation in the number of units being built. I do understand, and empathize with the difficulty of living life and saving for down payments, closing costs and all the expenses of obtaining a home. I am sure that I am just old and out of touch with the times. I see so many "Millennials" driving luxurious, new cars; using the latest technology in phones and computers; and generally enjoying life to the fullest. Many, it seems, lack for nothing and save little to nothing in the process. They accept paying rents of well over $1,000 month, and most are approaching or surpassing $2,000. They have little to no appreciation for the value of an investment, no hope of living life mortgage-free someday, and are unaware of the importance of retirement, let alone leaving an estate to their children.
My generation worked hard, did without, to get into a home and then pay it off. Millions of people have enjoyed the 'good ole mortgage burning party' when families paid the last payment on their home and got that paid off mortgage paper. Seldom would we borrow on equity, or take out a line of credit against our mot valuable asset. Our goal and commitment was always to pay off our homes.
I would like to encourage everyone to consider taking the steps - and yes, sometimes making the sacrifices - necessary become a homeowner. Maybe this analysis will put it into perspective: if you start renting at age 25 and live to age 75 and pay an average rent of $1,750 a month, you will have paid, $1,050,000 to your landlords over the course of your life. At then end of that time you will own nothing and will leave nothing to your children. Yes, that is over a million dollars, with absolutely nothing to show for it.
Also, consider the fact that mortgage payments are often less than the cost of renting for the same house. So, consider buckling down, making the sacrifics, doing without some small "wants" to save up and step into home ownership. This old man can guarantee the you 30 years from now, you will be really glad you did!