Did you know that millennials are the largest living generation? According to a recent census, they now outnumber baby boomers by almost 5 million people. This is because many millennials are delaying major life events like marriage, home ownership, and parenthood. But why? Well, because not all of them can afford it. The cost of living continues to rise as wages stagnate, which forces young adults to delay these milestones. To make matters worse, rent prices continue to climb nationwide. In fact, the national average monthly rent for a one-bedroom apartment was $1,123 in 2018 – an increase of 3% from the previous year. While this statistic doesn’t paint a rosy picture for anyone looking to rent or buy their own place soon, it doesn’t mean there aren’t any affordable options out there.
Create a home of your own
First and foremost, if you’re able and willing to purchase a home, go for it! This will help you avoid paying higher rental rates and provide more stability for your life in general. If you’re not sure where to start, you can visit your local real estate agent to explore your options. Real estate websites are great resources as well since they often include the average rental rate and sale price of a given neighborhood. If you find a place you like, you can also talk to your agent about how much you can expect to pay in monthly mortgage payments. For reference, the average home price in the U.S. was $341,000 as of September 2018.
Utilize tools to find the best place for you
If you decide to rent, you’ll want to make sure that you find a place that suits your needs. Luckily, there are a few different tools that can help you find the perfect place. One that we particularly like is Zumper’s Instant Rent or Buy tool. It allows you to search for available rental properties, see photos, and read reviews from current tenants. You can also filter your search by rent price, neighborhood, number of bedrooms, and other important factors. Another great place to start your search is ApartmentList.com. This website lets you search for affordable rentals in your area. It also has a handy ‘rent calculator’ feature that shows you how much you can expect to pay each month based on your income.
Rent before you buy
If you’re having a hard time saving up for a down payment, consider renting before you buy. This way, you’ll have more time to save up for a down payment and avoid paying higher rental rates in the meantime. Another benefit of renting before you buy is that you’ll be able to see how the rental market in your area works. You can also find out how much you can expect to pay per month for a rental property of your choice. This will make it easier for you to plan for the future since you’ll have a better idea of the amount of money you’ll be spending each month. You can even use an app like my property to keep track of your monthly expenses.
Apply for a loan early and often
If you’re planning to buy a house, apply for a loan as early as possible. This will give you more time to save up for a down payment and avoid paying higher rental rates. Many lenders may also offer you more favorable interest rates if you apply early. You can also ask your real estate agent or lender about programs that let you defer your down payment. This can make it easier to save up for a down payment since you’ll be able to make smaller monthly payments until the time comes to pay it in full.
Get help from family and friends
Another great way to save money on a down payment is by getting help from your family and friends. You can avoid paying higher rental rates until you’re able to save up for a down payment by having a loved one co-sign your loan. This can lower your interest rate and make it easier to qualify for a loan. You can also consider taking out a personal loan from a financial institution. This can allow you to pay off your loan faster, which will allow you to save up for a down payment faster.
As you can see, there are a number of things you can do to prepare for homeownership. Whether you’re creating a budget or utilizing tools to find the best place for you, there are plenty of ways to make homeownership a reality for you. If you’re single, consider renting before you buy a place or get help from family and friends to make homeownership a reality. If you’re in a couple, you can also create a budget to help keep expenses low. No matter who you are or where you’re at financially, there are lots of ways to create a home of your own.