By KIM BOJORQUEZ, The Salt Lake Tribune
SALT LAKE CITY (AP) – One night, Joey Howell and his three-year-old roommate were drinking beer and hanging out when their conversation turned to real estate. Two of their friends had recently teamed up to buy their first home together.
“I think it inspired us because we were like, ‘Oh, hey, that sounds like a great idea,'” said Howell, 32.
After years of renting, Howell said he was tired of not raising equity and not being able to work on home improvement projects with his roommate.
That conversation came true in 2015 when the two co-purchased a 3-bedroom, 2-bathroom single-family home near Liberty Park for around $ 250,000. They agreed to share the cost of the house in the middle.
As young adults face rising housing costs coupled with stagnant wages and high student debt, millennials – the cohort born between 1981 and 1996 – are co-buying a property with their friends to make the dream of becoming a reality. owner, reports the Salt Lake Tribune.
Millennial Homeownership Trends
Between 2014-2021, real estate data obtained by the Wall Street Journal shows that the number of co-buyers with different last names climbed 771%.
It’s a trend that signals the lack of affordable housing options, according to Dejan Eskic, senior researcher at the Kem C. Gardner Policy Institute at the University of Utah.
âHome ownership continues to be out of reach for more and more people because prices are accelerating so quickly,â Eskic said.
Just under 40% of people under 35 owned a home in 2020, according to the US Census Bureau. This compares to about 80% of people over 65 who were homeowners. In Utah last year, about 42% of home loan applicants were under 34, according to Eskic.
In previous generations, it was common for people to get help from their parents to pay a down payment on a house. However, millennials are the first generation likely to have lower net wealth than their parents, Eskic added.
The wealth of the middle class is often stored in home equity, he said.
âIf you’re a tenant, your equity is less than $ 10,000, so that has huge implications,â he said. âMillennials are falling behind. “
After living in the house for years, Howell, and what he jokingly calls his âPlatonic House Partner,â decided last year that it was time to sell. They sold the house for almost double its purchase price in the early days of the pandemic. Months later, Howell bought another 3-bedroom single-family home in the same neighborhood. This time all alone.
Howell said he wouldn’t have been able to pay the down payment on his new $ 460,000 single-family home in Salt Lake City without the gains he made from selling the first property with a friend.
âI couldn’t afford this house,â Howell said. “The decision to do this with my roommate was like one of the best decisions I’ve ever made.”
Eric Stonehill, 33, the mutual friend who inspired Howell to invest 50/50 in his first home, recently sold the single-family bungalow he bought with his roommate after accepting a job offer in Denver.
Stonehill, who works as a chemical engineer, however, has some regrets for selling the house during the COVID-19 crisis. After selling the house in April for almost triple the amount he and his roommate originally bought it for, Stonehill now feels out of the housing market. Seeking to return to Salt Lake City, he plans to buy a duplex with a friend.
âI’m in the exact same place where I was (seven) years ago in terms of where I can enter the market,â he said. âMost of this is due to the pandemic and the lack of inventory. “
Howell and Stonehill agree that it’s essential to move in with someone you trust and have a solid exit plan before sharing a home with a friend.
âIt’s a good investment,â said Eskic. “You’re not just losing money on rent, you’re actually building something.”
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