It’s taking millennials much longer to buy their first home.
In 2021, the U.S. average age to buy a first home was 33. But according to the National Association of Realtors, that number has jumped to 36 and could soon climb higher.
This is just another painful reminder that high housing costs and mortgage rates are pushing homeownership out of reach for you. Still, rather than play the victim card, you can fastrack your homeownership dreams by trading assets that yield bigger returns.
See one that helped me pay cash for my first home.
Unlike Baby Boomers — who’ve accumulated enough wealth over the decades to buy their dream retirement homes with relative ease — Millennials (born between 1980 and 2000) have been hit with one recession after another since entering the workforce.
From the dot-com bubble burst in 2000 to the Great Recession of 2008 and, most recently, the COVID-19 pandemic. With three significant downturns in their rearview mirror, millennials now face a challenging housing market where fewer homes are available, asking prices are expensive, and interest rates have skyrocketed past 7.1%.
According to the National Association of Realtors, the national median home price hit $402,600 in July, up from $359,000 at the start of 2023. Also, the typical mortgage on a single-family home is now $2,051 — compared with $1,837 a year ago.
To worsen matters…
Mortgage rates have increased for the sixth consecutive week, with the average interest rate for 30-year fixed-rate mortgages reaching 7.70%. This is the highest rate since November 2000, up from 6.94% during the same week in the previous year. The latest spike in mortgage rates is partly driven by a stronger-than-expected retail sales report, which has impacted home affordability and further slowed the housing market.
Another statistic: The Wells Fargo Housing Market Index dropped 4 points to 40 in October, marking the third consecutive monthly decline in builder confidence.
Why is this number important?
Because any reading below 50 suggests reduced affordability for young homebuyers.
And for confirmation, homebuilders report lower buyer traffic levels, particularly among younger buyers who are being priced out of the market due to higher interest rates.
To attract more buyers, builders are using more incentives and buying down mortgage interest rates. More than 32% of builders have cut home prices. Increasing housing production is also a potential solution to this crisis. However, the Federal Reserve’s monetary policy uncertainty could remain a big nightmare for potential homebuyers.
As I hinted earlier, we can’t deny the numbers. Fewer homes are available; for some, buying their first home will take much longer. However, that doesn’t mean you must sit back and watch your homeownership dreams evaporate like a puff of smoke.
I approach life much like Dave Ramsey does. If you can’t pay cash, you can’t afford it.
And do you know how I’m able to pay cash?
By trading one “unloved asset” three to five times weekly…
Even better, there’s never been a better time to start investing in this asset.
See what it is and how it could pay for your first home over the next 12 months.