When Stacy and Jeff Deakyne bought their first home, it was a seamless process that didn’t require any money down due to VA benefits.
The couple, now in their 50s, see that their homebuying journey is different for their two children, who live at home and they work and go to school to get advanced degrees. New challenges await their children, like student loan debt and rocky job markets have made things difficult for many young people who want to buy their first home.
While the Deakyne’s children see living at home as a sacrifice, their parents look at it as a way for them to get ahead: they figure if their children can stay home and pay off student loans and save for homes, it will be one less thing to worry about.
According to a recent Apartment List survey, 37 percent of Millennial renters have no savings to put toward the down payment for a new home, but 80 percent plan on buying a home in the future.
A couple of decades ago, first-time homebuyers could’ve looked to parents for relief, but in today’s economic climate, many parents and grandparents aren’t financially confident or stable enough to help. Millennials have had to get creative and self-sufficient in order to get into their first homes. Here are some creative ways Millennials have funded a down payment for their first home:
For Gene Caballero of Nashville, Tn., a hobby of collecting change at a young age came to be one of the smartest financial decisions he ever made.
“My down payment for my house was accumulated from spare change — $4,567.58 worth of change to be exact,” Caballero recalls.
He started collecting large tubs of change when he was 15 and cashed in when he was 26, stating he never imagined it to be that amount.
Some Millennials who have been strategic and have saved for a down payment are also having a tough time purchasing homes because of rising home costs. According to the data from Apartment List, Millennial renters have saved an average of $5,830 – just one-fifth of the savings required for a 20 percent down payment on a $175,000 starter home.
Ian Wright, founder of international moving search company MoverDB.com who lives in London, says trying to save up for a down payment was nearly impossible for him until luck came in the form of stock options from his employer.
“I started working at a startup shortly after I moved to London and one year, instead of giving us a raise, our boss gave us stock options,” says Wright. “I wasn’t happy about this at the time because the salary was already low, but after a few years they told us we can cash in our stocks and suddenly I had more than enough money to buy a place.”
It took him seven months to find the perfect home, but he says he knows he got lucky and is grateful for his employer.
Salman Mian, who just closed on his first home in Minneapolis, wishes there was some assistance for people like him and his friends; young people who are college-educated with decent jobs and who work hard.
“We’ve been dealt a bad hand and could use a little breathing room. I feel like everyone else is getting help and were being left out,” he says.
If you are coming up short on a down payment for your first home, it’s also important to consider down payment assistance programs and to remember that 10 percent is not required to purchase a home. However, it’s important to find the right program for you and to consider all costs associated with buying a home.
Yasin Mohamud is a freelance journalist who has contributed articles on a variety of topics to many publications, including Eater.