Student loans, COVID, house prices: Why millennials delay buying homes

Long Island millennials are struggling to buy their first homes at the age their parents and grandparents were already settled into their first or second ones.

Faced with high prices and demand, low inventory, COVID-19 pandemic setbacks and student debt, some millennials — those born between 1981 and 1996 — say they have few options.

“The opportunities our parents or grandparents had, buying homes for $75,000 — now with houses going for $700,000, that opportunity does not exist in present-day Long Island,” said real estate agent and Long Island native Yvette Hallman, 30, whose own house hunt has taken her as far as Poughkeepsie and Albany.

According to recent data from the National Association of Realtors (NAR), the typical age of a first-time homebuyer in the United States is 36, as of last year — an all-time high throughout the time NAR started conducting the survey in 1981.

This increase is notable when looking at the history of the report. According to the NAR’s 2022 Profile of Home Buyers and Sellers, the median age of first-time homebuyers was 29 in 1981, then 32 in 1993. From 1995 to 2018, it lingered around the 30 to 32 range.

With patience and advocates in their corner, some young Long Islanders have been successful in becoming first-time homebuyers. Others have resorted to continuing to rent, settling for starter homes or leaving Long Island altogether. 

What millennial homebuyers want vs. what they can afford

The opportunities our parents or grandparents had, buying homes for $75,000 — now with houses going for $700,000, that opportunity does not exist in present-day Long Island.

Yvette Hallman, 30, real estate agent

Millennial real estate agent Kevin Iglesias grew up in Nassau County. The Signature Premier Properties broker (with his office based in Miller Place) has helped clients in his age group look into communities like Lake Grove, Selden and Port Jefferson Station.

But sometimes their expectations cannot be met within their price range.

“I get a lot of people that come to me and want the whole nine yards,” he said. Four bedrooms, two bathrooms, an in-ground pool and a two-car garage are some of the most frequent desires he finds in his millennial clients.

“I see a lot of millennials settling for starter homes until that forever home comes to fruition,” said Iglesias, 33.

I see a lot of millennials settling for starter homes until that forever home comes to fruition.

Kevin Iglesias, 33, real estate agent

Shaughnessy Dusling of EXP Realty, based in Hauppauge, works with first-time homebuyers in Suffolk County every day, and they are mostly millennials. Those clients, in her experience, have also become “a little more willing to settle,” she said. 

“Because they understand the longer they wait, the less affordable homeownership is,” said Dusling, 37.

Dusling said that after finding a home, many of her millennial clients experience a rude awakening near the end of the purchasing process.

“They’re surprised by the closing costs being so much money,” she said. “A lot of people work really hard to save their down payment, and are thrown through a loop when they realize closing costs are a lot higher than they anticipated.”

For example, a $500,000 house with a typical 5% downpayment would be $25,000, but closing costs can be an additional $20,000 to $25,000 depending on property taxes and loan terms, she said.

In January 2020, Dusling purchased her own 2,200-square-foot home in Stony Brook for $635,000. It contains four bedrooms and two bathrooms. She said the pandemic that followed shifted the mindsets of many millennials on Long Island: After being in lockdown, this age group is finding the value of privacy within their living space, and they want their own outdoor area, too. 

COVID really disrupted everyone, obviously. A lot of people lost their jobs, and a lot of people had to use their savings, so that kind of pushed families’ plans back.

Shaughnessy Dusling, 37, real estate agent

“They’re just enjoying the lifestyle that Long Island provides to them,” she said.

At the same time, the pandemic altered millennials’ paths toward homeownership, which could be one reason the typical age of a…