First-time Nashville homebuyers struggle with affordability
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Nashville millennials are making big budget changes, like ditching a car, to save for a down payment.
Why it matters: Nearly three-quarters of aspiring homebuyers say affordability is the No. 1 obstacle to owning a house, per a Bankrate study.
Zoom in: David Greaves, an engineer and local artist, and his partner bought their McFerrin Park home three years ago. Greaves gave up his car and lived in a rental with five roommates prior to buying.
- Choosing to bike instead of drive saved him hundreds of dollars per month, Greaves says.
- Budget-conscious decisions allowed him and his partner to buy a home in their preferred area, he says.
The big picture: Among millennials who don't already own a home, 44% say income is the biggest barrier to buying, per data Bankrate shared with Axios. And 43% say they can't afford the downpayment and closing costs.
What's happening: A Redfin report on "nepo-homebuyers" found 38% of recent buyers under age 30 received family money in order to afford their down payment.
The intrigue: Millennial mortgage applications were down nearly 5% in Nashville for the first half of 2023, compared to the same time last year, according to figures LendingTree shared with Axios.
Yes, but: Waiting to buy isn't a bad thing.
Be smart: "You can build wealth just fine by renting," says Bankrate Chief Financial Analyst Greg McBride.
- Taking time to save, invest, build your credit and advance in your career can meaningfully improve your financial picture, he says.
- Homeownership "sucks the cash right out of you," at least at first, McBride says. You need to save beyond the initial down payment to weather unexpected additional expenses — the No. 1 reason millennial homeowners have buyers' remorse.
Go deeper: Extreme weather could raise insurance rates nationwide, hiking the cost of homeownership even higher.