Many millennials saved a partial down payment and could visualize being a homeowner until rising rents and surging home prices kicked the ball farther away.
MIAMI – The dreams of thousands of millennials are slipping away in the scorching housing market of South Florida.
Buying a home has been a challenge for everyone, but millennials are at the age when they were supposed to start setting their life’s course: a home, children, security. Instead, rising rents are cutting into money they could have put toward saving for a home if they could even find one. Many millennials – roughly ages 25 to 40 – are increasingly frustrated.
“It seems impossible,” said 40-year-old Nikki Nors, who lives in Davie. Her search for her first home hasn’t gone well. Most homes have been out of her budget, or they’re too small for her and her family.
The statistics for millennial homeownership are discouraging: 18% of millennials said they planned in 2020 to rent forever, up from 12% the previous year, according to data from Apartment List, an online marketplace.
For those who still plan to get a home, about 63% said they do not have enough money for a down payment.
Despite homeownership rising among millennials as they age, their rates still lag previous generations by almost 8%, according to Jung Choi, senior research associate with the Housing Finance Policy Center at the Urban Institute.
“It’s becoming a trend. We do see that millennials, early on, significantly have lower homeownership than in previous generations,” Choi said.
Audrey Torrence straddles the Gen Z and millennial generations at age 25. “I’m doing everything I am supposed to do in my life,” she said – except owning a home. Her plan is to buy a home by the time she is about 28, but the possibility of a staggering rental increases at her apartment complex in Davie have her concerned whether she’ll ever have the money for a down payment.
“Right now, I had a whole plan in action to save up and have that down payment for a house in three years, but if the rent price goes up, it won’t be feasible,” she said.
Roxanna Martinez, 32, wants to buy a townhome. Meanwhile, she’s renting in Miramar.
“The goal was to do it this year, but I’m pushing for next year,” she said. “It’s a little unreachable, but it is the goal.” She’s looking for a second source of income to be able to afford a home. “It’s hard. I feel like we don’t make enough to live on our own,” she said.
Owning a home is seen as one of the biggest indicators of “economic mobility,” or improving one’s economic well-being. But after the Great Recession and the COVID-19 pandemic, it’s a dream that is increasingly out of reach, experts say. Of millennials who have saved money for a house, 8% have saved $5,000 to $10,000, according to Apartment List – hardly enough in a market like South Florida where the typical home costs a half-million dollars.
Fourteen percent of millennials have saved less than $5,000.
For those who may have money saved, they are finding that the home they envisioned is out of reach, forcing them to compromise on even being able to get a house. Competing with older, wealthier buyers for a limited number of homes seems insurmountable.
“Breaking into the housing market for millennials is torture,” said Florida International University sociology professor Matthew Marr. “There is a cascading effect as older folks are also breaking into the market who have been able to accumulate savings and that is who millennials are competing with.”
Nors, the Davie renter, was looking to purchase her first home before the pandemic hit, but she found her dream delayed due to a limited budget. Many homes within her budget were either too small, in an unsafe area or didn’t have the amount of space she needs for her family.
“I started getting really discouraged,” she said. She’s been forced to delay getting a home and continue to rent in Davie.
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