For years, millennials have lagged behind older generations when it comes to homeownership, but we are making some progress. As of a 2022 study, 51.5% of millennials — that is, ages 27 to 42 — owned their homes, marking the first time homeowners outnumbered renters in our generation.
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He's a Realtor in Orlando whom you might recognize from his time on "Days of Our Lives," and he's gone viral on TikTok for breaking down the financial hurdles facing millennials in a way that even the most stubborn boomer uncle can understand.
In a video that's been viewed 4.4 million times, Freddie (@fmsmith319) responds to a commenter who wrote, "I can't get a mortgage. But my rent is 3k." Freddie replies, "Any time a millennial is trying to explain this to a boomer, they use the same example. They go, 'Well, my interest rates were 15%, you have 6½, you're so lucky.' Well, let's look at it this way."
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"If you bought a house for $80,000 back in the '80s, a 20% down payment would be $16,000, and the average person was making around $30,000* back then. So your down payment was just half your yearly salary. And then the loan you would have on it would be about $60,000. So in order to pay off the $60,000, if you really wanted to, it's just two years of your salary, and you could have your house paid off."
"Well, let's fast-forward to 2023, and I live in Orlando, so I'll use this as an example. A $400,000 house with 20% down would cost $80,000 just as the down payment. The average person makes $50,000*, so it's almost twice their yearly salary just for the down payment. Then they've got a $320,000 loan left that they have to look at. That's nearly seven times their salary to pay off the loan regardless."
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*The median salary in 2022 was $56,420.
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