Millennials Don't Have Enough Down Payment Money For House Purchase

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WhatInThe

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A lot of millennials don't have the down payment money to buy a house which either delays a house purchase or puts them into more debt with less money down.

http://bigstory.ap.org/article/c431...g-ingredient-millennials-down-payment-savings

The savings rate and financial literacy has been declining for decades at this point. Now they are simply much more noticable statistics. I see similar trend in car leasing and sales now as well. If people are buy or leasing a car with little or no money down their monthly payment diminishes future savings potential.
 

I think we can do well with a lot less than we think we can. I have downsized in the past several years and offed most of my personal possessions. After all it all only stuff. Yes, we need a place to live, but we don't need near what we are being led to believe.......and then we spend our life working our butts off for some ungrateful arse just to make the payments. I hope that the upcoming generations go for simplicity and love instead of bigger and better.
 
I observe many of these Millennials spending too much money on vehicles, eating out, entertainment etc. Money for the down payment of a home can be saved if it becomes a priority over self indulgence. Now doesn't that just sound like something a Old Fart would say?
 

Lon said:
I observe many of these Millennials spending too much money on vehicles, eating out, entertainment etc. Money for the down payment of a home can be saved if it becomes a priority over self indulgence. Now doesn't that just sound like something a Old Fart would say?
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A smart and realistic old fart at that. The people I know with money troubles seem to find money every two years or so for the latest i phone, dine out with regularity, buy season & concert tickets, expensive clothes and get all the bells and whistles when they buy or lease a car like they are essential basics.

Yes the west is materialistic but a lot of that material is represents a lot of sweat and hardwork along with sentimental dreams & desires(why else save those dolls and baseball cards).

See if people prioritize they can't have or do it all in an era instant gratification and convenience.
 
I think I read an article last week that discusses the subtle changes going on at the consumer level, that we are not shopping like we used to. Good news for our credit cards and bank accounts if true, but think it through and consider that this wouldn't be such good news for the providers of those gadgets and goodies and they are the ones who employ the erstwhile consumers! Sort of damned if you do and potentially damned if you don't, it seems to me.
 
Lon, I couldn't have said it any better than that.

I worked hard for what I have now and now have all the money I need/want with no worries about
money. I even pay cash for anything I buy except for big items....like appliances etc. and that goes
on my Master card and paid off each month.

I always pay cash for my cars; I hate monthly payments. I want that pink slip right NOW!

Remember what I said at the top; "I worked HARD for what I have now."
 
Lon said:
I observe many of these Millennials spending too much money on vehicles, eating out, entertainment etc. Money for the down payment of a home can be saved if it becomes a priority over self indulgence. Now doesn't that just sound like something a Old Fart would say?
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I completely agree!! They want to have the very best of everything & aren't willing to live modestly and save money. Totally agree!
 
Falcon said:
Lon, I couldn't have said it any better than that.

I worked hard for what I have now and now have all the money I need/want with no worries about
money. I even pay cash for anything I buy except for big items....like appliances etc. and that goes
on my Master card and paid off each month.

I always pay cash for my cars; I hate monthly payments. I want that pink slip right NOW!

Remember what I said at the top; "I worked HARD for what I have now."
Click to expand...

Well see if a person buys a car outright they become the owner and get all the responsibility that comes along with owning a car. Leasing or buying it on time is basically borrowing the bank's car. And oh my. If they buy a car outright they might be tempted to keep it more than three years and will have to worry about repairs & cost themselves-uh oh. This is a generation that can't even change a flat tire on their own and has become addicted & made lazy by things like warranty provided roadside assistance. And last but not least they will become uncool driving around in a car more than three years old-there goes the neighborhood.
 
Well, when people are willing to pay $500-plus for a cell phone (making payments on it the way people make payments on a car), and cell phone providers post the prices of their phones as $?? per month instead of a flat price, e.g., $29.99, that is not exactly conducive to thinking of putting any money away in savings. A person buys a $500 phone, pays for it on a credit card, pays something on that credit card bill every month ... I think young adults these days have no concept of having to save for anything, the way a lot of us had to save even for a bicycle, a pair of skates, a parent's birthday present ...

The idea of saving for anything at all is just a foreign concept to people who have grown up living on credit and never having to have the actual full amount of cash in hand to buy anything.
 
Guitarist said:
Well, when people are willing to pay $500-plus for a cell phone (making payments on it the way people make payments on a car), and cell phone providers post the prices of their phones as $?? per month instead of a flat price, e.g., $29.99, that is not exactly conducive to thinking of putting any money away in savings. A person buys a $500 phone, pays for it on a credit card, pays something on that credit card bill every month ... I think young adults these days have no concept of having to save for anything, the way a lot of us had to save even for a bicycle, a pair of skates, a parent's birthday present ...

The idea of saving for anything at all is just a foreign concept to people who have grown up living on credit and never having to have the actual full amount of cash in hand to buy anything.
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Credit equals instant gratification more detrimental than illegal drugs because credit is legal, not always practical or justified but 'legal'. If people don't have to wait for anything then they have no incentive to think ahead although they always seem to know about those new iphones months in advance. Then the same young people parrot the virtues of things like the cashless society as if it's the best thing since sliced bread, no wallet to carry or keep track off(that's a real downer).
 
My 24 year old middle daughter is VERY frugal..VERY. She and her husband bought their own home last year. Why could she and her friends at work not?...Because she saves and saves and wears cheap clothes. She and her husband did it all on their own. It can be done it just isn't easy to do if you're busy showing off with fancy clothes, cars, furniture, etc.
 
I've heard that there is a turning trend to the building of smaller houses. This is the only way the future generations are going to be able to afford a home. Our parents did it, we did it .. lived in smaller spaces. My two sisters and I shared a bedroom, and when the eldest left, two of us shared a room until the second eldest left home. We managed to get along without a lot of privacy. In many homes, there is a wealth of unnecessary wasted space. A huge backyard is not always a necessity either.
 
BW, it also depends on where you live. Here, in my town, an old fixer upper goes for $275.OOO. In Vancouver, most expensive homes in Canada, $1,OOO,OOO for an average home. Victoria, less than an hour south of where I live, hello $575.OOO. Way too steep for most millenials.
 
Shalimar said:
BW, it also depends on where you live. Here, in my town, an old fixer upper goes for $275.OOO. In Vancouver, most expensive homes in Canada, $1,OOO,OOO for an average home. Victoria, less than an hour south of where I live, hello $575.OOO. Way too steep for most millenials.
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This is just an honest question, not an opinion concealed in a question --

I wonder if not having enough money to put a down payment on a house is really a big deal if the millennial generation is not as much into marriage (or long-term marriage) as previous generations were? I do know that sometimes unmarried couples go in together to buy houses.

I also know that young people nowadays are paying HUGE amounts of money (or getting their parents to) on weddings when they do get married. Blows my mind to read about these events.

Do parents in real life nowadays make a gift of a house (or down payment) as a wedding gift? I'm thinking of My Big Fat Greek Wedding.

I'm just thinking in print right now. I have no millennials in my family (really have no family to speak of at all).
 
Guitarist, my son and DIL have been together since she was eighteen, he twenty-one. They met at university. Lived together for four years before marrying eight years ago. Currently, they are in Winnipeg, where she just finished her final year of law.

They paid for their own wedding. I contributed ten grand to their living expenses the first year they spent in cold Winterpeg, until he got established in a new job. They chose to postpone having kids until their careers were settled. Certainly they would like to buy a new home. Expectation is, kids in three years, pay off rest of student debts, save for down payment on a house.

Most of the millenials I know follow a similar pattern, although I know some who eschew marriage. Some parents do pay for elaborate weddings or give down payments as gifts for their children. The housing market here is expensive, certainly above my pay grade to help my kids out in that fashion. Suitable house for a family, not run down, $350,OOO.
 
Shalimar, your son and DIL are doing things the right way. You must be very proud of them.

Downtown Toronto, and the suburb we're in, even townhouses are priced at a million. An hour or more outside the city, $700,00 is about the norm. That's about what our two bedroom condo is worth. My daughter and SIL were looking outside the city, but didn't want us having to travel an hour each way on the highway to visit them. They are mindful we are 'seniors', albeit younger seniors .. but seniors, nevertheless. They are in a condo across from the Distillery, with a great view of the CN tower. In the end, they decided to renovate and redecorate rather than buy a house out of town. If a baby should come along, they'll probably start looking at houses again. SIL is in the banking industry, and they're responsible with finances.
 
Shalimar said:
BW, it also depends on where you live. Here, in my town, an old fixer upper goes for $275.OOO. In Vancouver, most expensive homes in Canada, $1,OOO,OOO for an average home. Victoria, less than an hour south of where I live, hello $575.OOO. Way too steep for most millenials.
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Wow unreal. My question is this.. ( not trying to be rude I'm really not)..why don't the young move to a cheaper area then? It's why I moved to Texas when I was 18. Most of my relatives live in a beautiful picturesque city in the mountains in Colorado. I was in love with the scenery, but high cost of rent & no jobs there. I cleaned motel rooms with a girl that had 6 years of college & did not want to move because she loved to cross country ski more than anything in the world. Me..I moved to Texas where rent was cheaper & jobs more plentiful. Yes I live in a flat flat place & no beautiful clear river...no lovely mountains. I traded down in scenery to be able to make it. Does Canada have any cheaper places the young can move to?
 
Pinky said:
I've heard that there is a turning trend to the building of smaller houses. This is the only way the future generations are going to be able to afford a home. Our parents did it, we did it .. lived in smaller spaces. My two sisters and I shared a bedroom, and when the eldest left, two of us shared a room until the second eldest left home. We managed to get along without a lot of privacy. In many homes, there is a wealth of unnecessary wasted space. A huge backyard is not always a necessity either.
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I love those tiny houses. I wanted one..but this one i live in was already paid for so I moved here.
 
Yes BW, there are cheaper places to move too. But we have a population one tenth of America. Basically, you go where the jobs are, usually the cities, if one is ambitious. Not cheap to live in a major city.
 
Guitarist said:
This is just an honest question, not an opinion concealed in a question --

I also know that young people nowadays are paying HUGE amounts of money (or getting their parents to) on weddings when they do get married. Blows my mind to read about these events.
Click to expand...

I know!! It freaks me out the amount of money some are spending on weddings. Just blows my mind. I would have much rather spend that amount of money towards a house & just think it's insanity if you aren't wealthy to blow it all on a wedding. I had cake & punch in the park and I was just fine with that. We paid for cake & punch LOL.
 
Shalimar said:
Yes BW, there are cheaper places to move too. But we have a population one tenth of America. Basically, you go where the jobs are, usually the cities, if one is ambitious. Not cheap to live in a major city.
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Oh that's awful then . Very difficult .
 
BlunderWoman said:
Wow unreal. My question is this.. ( not trying to be rude I'm really not)..why don't the young move to a cheaper area then? It's why I moved to Texas when I was 18. Most of my relatives live in a beautiful picturesque city in the mountains in Colorado. I was in love with the scenery, but high cost of rent & no jobs there. I cleaned motel rooms with a girl that had 6 years of college & did not want to move because she loved to cross country ski more than anything in the world. Me..I moved to Texas where rent was cheaper & jobs more plentiful. Yes I live in a flat flat place & no beautiful clear river...no lovely mountains. I traded down in scenery to be able to make it. Does Canada have any cheaper places the young can move to?
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In Canada, the Maritime provinces are the cheapest. For example, our house just sold for $320,000 for a 4 year old, 1600 square foot house with attached garage and a 800 square foot 4 year old barn on 12 picturesque acres. Or you can buy a little 1600 square foot house, 60 years old on a town lot for around $130,000. I'm not sure what a condo would cost though. Also right now, Calgary prices are dropping because of all the out of work oil workers although I haven't looked into those prices actually (that's my husbands job). The problem is that in the Maritime provinces where the prices are lower, there is a shortage of good paying jobs so it's not just a case of moving to where housing costs less, there's also the employment factor.
 
On tiny houses. For some they are fine but others they would not be a good mix.

Larger homes weren't built just to be large but served a purpose. Decades ago there was more emphasis on self sufficiency so a house might have included space for a workshop/bench, tools including garden, carpentry and/or mechanical, ladders, supplies, a guest room, office etc. They did have function and not just a place to store outdated video games. And with the explosion or use of off site storage ie storage units(a rip off for many) one must wonder are houses really too big, not talking mcmansions either.

I don't want to stray too much but things like 'open concept' I think it is basically like living in an efficiency. A separate kitchen serves a purpose including keeping food and odors in one room. The whole house shouldn't smell like dinner. Again for some this is fine but I think many are buying or choosing for style including builders who sell for more money.

I love how different parts of the country describe block housing(houses built side by side sharing walls in between), some call them town homes, condos, row houses but they are nothing but multi floor apartments. They are a home though, a place people can buy, own and call their own.

Kudos though to the young ones that realize the value and practicality of buying 'a' home. They will be the ones hosting cook outs, dinners, parties etc. They will be the ones parking close to or in sight of their doors. They will have a place to store their stuff instead of renting a unit.

I will say the current generation has to deal with a housing market where a house is treated like a commodity or gamblers bet driving prices upward in many markets. But it is also a market where one gets a much quicker return on their money in the right market. In many older neighborhoods a house aged liked whine sometimes taking decades to be 'profitable'.

There are several reasons for the lack of younger home buyers but it still comes down to priorities and discipline in many cases. Do they want a home, investment or a life style?
 
Debby said:
In Canada, the Maritime provinces are the cheapest. For example, our house just sold for $320,000 for a 4 year old, 1600 square foot house with attached garage and a 800 square foot 4 year old barn on 12 picturesque acres. Or you can buy a little 1600 square foot house, 60 years old on a town lot for around $130,000. I'm not sure what a condo would cost though. Also right now, Calgary prices are dropping because of all the out of work oil workers although I haven't looked into those prices actually (that's my husbands job). The problem is that in the Maritime provinces where the prices are lower, there is a shortage of good paying jobs so it's not just a case of moving to where housing costs less, there's also the employment factor.
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That's also true IME. A friend who visited me last fall (I live in a large city) said he would never want to live in a city with so much traffic and he could not understand why anyone would want to. I said, well, for one thing, jobs. He didn't seem to get that. He has always lived in very small towns/rural areas and worked, but never at jobs that paid very well. He's been happy, and now he's semi-retired and lives out in the country, but I was surprised that he just didn't get that cities are where most of the jobs are.

I also think some people like the idea of the anonymity a city gives you. It's a contrast to the insularity of the stereotypical small town.
 
I wasn't very smart with money when I was younger. I didn't really even think about the future and owning anything like a home. I almost bought a condo in my 30's and bailed on it in escrow out of fear thinking it wasn't going to work out for me. Now of coarse I wish I had purchased a condo. A lot of young people just don't think of these things.
 

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