It’s no secret that rent on Long Island has gotten a bit out of hand high rent prices are seemingly leaving millennials with 2 options; either continue living with their parents or move off the Island.
Today’s younger adults are having a hard time justifying the cost of renting while also trying to deal with student loan debt and saturated job markets. It certainly doesn’t help that Long Island’s housing market is in a constant state of low supply and high demand, allowing the price of rent to soar.
But what many millennials don’t realize is that there is actually a third option: purchasing a home, and it’s likely more obtainable than they think!
Driving Millennials Away
Watching the younger crowd leave Long Island isn’t anything new. Census data shows that between 1990 and 2016, the number of adults ages 25-34 living on Long Island dropped from a high of 430,400 to 327,350. The small portion of millennials who do remain on the Island tend to hold off on getting married and having kids due to lack of funds to support a family.
This forces many younger Long Islanders to live with their families instead.
Almost half of all Nassau county millennials are living with their parents compared to the rest of the United States where roughly one fifth of millennials are living with their parents.
Incentives to Stay on the Island
Some town officials have shown concern over the loss of millennials throughout the years. County Comptroller Jack Schnirman considers it a challenge to Long Island’s economic well-being. Schnirman feels that losing too many young people could cause the tax base to drop.
The key to making sure millennials remain on Long Island is to give them what they need, and that’s affordable housing near public transit.
City planners have noticed millennials having a strong desire to be near a downtown area with a strong nightlife, or have access to public transportation (such as the Long Island Rail Road) that can easily bring them to such an area.
This is known as “transit-oriented development” and local planning companies, such as Vision Long Island, have already begun taking action, establishing projects that have already created roughly 13,000 housing properties with another 10,000 in development. However, these units are still on the expensive side, with some one-bedroom apartments going for over $3,000.
The high rent is still keeping millennials away. Right now, baby boomers and Generation Xers make up two-thirds of these new downtown apartments with millennials making up the remaining third.
But towns are doing their best to attract more younger folks.
The town of Westbury is looking to build about 1,000 apartments near the LIRR station provided a large portion of them will be set aside for millennials, veterans, and seniors.
As the price of rent continues to rise, “micro-apartments” are now being considered, featuring Murphy beds and other folding tables and shelves.
Misconceptions About Buying a Home
It’s common for millennials to feel that buying a home is well out of their reach, but that’s not always the case. There are many programs designed for low-income and first-time home buyers to help bring home ownership to fruition.
And it’s not like millennials don’t want to purchase a home. A 2014 study by Fannie Mae concluded that the majority of young adults would prefer to own a home rather than rent, as owning a home allows for more creative control, privacy, and security. Building equity is also seen as a major benefit of home ownership.
But millennials seem to have a false sense of what it takes to qualify for a mortgage.
For example, young adults frequently cite having a low credit score as a main reason for not pursuing homeownership. There are programs such as USDA loans that don’t have a credit score minimum, though most lenders prefer a credit score of about 640.
Needing to have a 20% down payment is another common myth among would-be home buyers. In fact, more than 60% of first-time home buyers make a low down payment. Although putting down 20% is preferred by many lenders, it isn’t always required. Programs such as FHA loans allow up to 96.5% financing, allowing you to purchase a house without putting down a significant amount of money upfront.
Home Buying Resources
Lack of home buying knowledge seems to be the biggest factor affecting millennials on Long Island. The Federal Housing Administration will work with buyers who have a less than ideal income or credit history.
Mortgage calculators are great way to help determine if you’ll be able to afford monthly mortgage payments.
In short, millennials are facing a lot of adversity such as student debt and stagnant job markets, but housing does not have to be on that list. A quick consultation with a real estate or mortgage professional can give you access to information and resources that could help make home ownership a reality for millennials.