Millennial Money: You nixed your homebuying plan. What now?
Elevated home prices, rising interest rates and steep competition are interrupting millennials’ plans to get that quintessential piece of the American dream — their first home, or an upgrade from a small starter home
Millennials are in peak nesting mode. We want the outdoor space many apartments lack, or the room to grow that a starter house doesn’t offer. There’s just a not-so-small problem.
(Gestures broadly at everything.)
The median existing home sales price of U.S. homes was $389,500 in August, according to the National Association of Realtors. That’s a 7.7% increase from August 2021. The average interest rate for 30-year fixed-rate mortgages topped 6% as of Sept. 15 this year, according to Freddie Mac. Compare that with an average rate of 2.86% just one year prior — that’s a 110% increase.
It can be hard to compete when an open house feels like a cage match. It’s enough to make anyone retreat to a rental for a while. “We’re seeing that those who were thinking of buying a home just aren’t interested anymore,” says Natalie Slagle, a certified financial planner and founding partner of Rochester, Minnesota-based Fyooz Financial Planning. “People aren’t as willing to make big financial moves when it feels like there’s uncertainty.”
