Are you a Millennial? Gen X, Y, or Z? Remember 2008? Probably not. You know, that little RE crash where the average American home dropped 20% from its peak? I suspect we're looking at another bubble that's about to burst.
That will happen when the loans inevitably begin to mature on the 20% of US homes owned by investors and they're forced to sell (cause they can't afford to rent given interest rates have practically tripled).
So the smart thing to do is have your parents mess up their retirement, give you a bunch of money, and then have your new home drop in value so you're financially pancaked. Besides, they were dumb enough to pay for your degree in European History, they'll probably do this.
Suckers!
1 big thing: It takes a village
Axios New
For some millennials in Chicago, the only way to buy a house is to get help from family.
Why it matters: While the city's relative housing affordability attracts young people, saving for a down payment can be even more challenging when spending 30% of your income on rent is "the new normal."
What's happening: A Redfin report on "nepo-homebuyers" found 38% of recent buyers under age 30 nationwide received family money in order to afford their down payment.
What they're saying: Casey Moore, 35, and his wife started shopping for homes in Chicago this year after inheriting enough money for a down payment. High mortgage rates and H.O.A. fees swayed them to keep renting anyway.
"I do understand the process of gaining equity and having something that, in theory, will retain its value, but the trade-off is just too high," Moore tells Axios.
The big picture: Among U.S. millennials who don't own a home, 44% say income is the top barrier to buying, according to a Bankrate study. And 43% say they can't afford the down payment and closing costs.
Zoom in: An inheritance, a gift in lieu of financing a wedding or another form of generational wealth funded nearly all of the down payments in Chicago homeowner Sarah Magnuson's social circle.
There's "no mystery about the immense privilege and dumb luck that afforded us these homes," says Magnuson, who tells Axios about 20% of her millennial friends are homeowners.
For their wedding, Chicago renter Alexis Smoot and her partner are asking people to gift money toward a house.
Reality check: You don't need to put 20% down. The typical down payment in the Chicago metro area was 10% in April, per Redfin.
Yes, but: Waiting to buy isn't a bad thing. Taking time to save, invest, build your credit and advance in your career can meaningfully grow your bank account, says Bankrate chief financial analyst Greg McBride.
And save beyond the initial down payment to weather unexpected additional expenses — the top reason millennial homeowners have buyers' remorse, per Bankrate.
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