Monday, August 17, 2015

First time home buyers

I heard on the news today that the median age for a first time home buyer is 33. I was 22 when we bought our first home (a duplex in Champaign-Urbana so the renters could pay the mortgage for us). I think I know the problem. Today young people sell their lives to various tech companies for their phones, cable,Netflix , Facebook and Instagram and they drive nice cars. Fifty years ago we didn’t have any of that. TV, no cost but the set; phone, no cost but rent from the phone company and monthly charge; movies were something you went to in a theater, not that came to us; an automobile--we didn’t have one in 1962, but had a bike. Today’s young families spend so much on their tech contracts they can’t afford a mortgage. Oh, and at 22 we had no college loans to pay back. No one did. We bought an older home in a racially mixed neighborhood with mixed zoning. Today people would rather rent for 10 years with amenities, then start big.

The typical first-timer now rents for six years before buying a home, up from 2.6 years in the early 1970s, according to a new analysis by the real estate data firm Zillow. The median first-time buyer is age 33 — in the upper range of the millennial generation, which roughly spans ages 18 to 34. A generation ago, the median first-timer was about three years younger.

The delay reflects a trend that cuts to the heart of the financial challenges facing millennials: Renters are struggling to save for down payments. Increasingly, too, they're facing delays in some key landmarks of adulthood, from marriage and children to a stable career, according to industry and government reports.

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