Millennials’ Homeownership Dreams Can Come True

For many millennials, the dream of homeownership feels far away, if not impossible. Salaries that haven’t grown with the cost of living, new mortgage rules, volatile housing markets, and a plethora of other reasons have made buying a home more difficult than it’s ever been for young people.

A survey by Apartment List of 24,000 American renters found that 80% of millennial renters want to become homeowners, but 72% are held back by affordability. Some 44% don’t have savings to put toward a down payment.

Many who find themselves in that position are trying to reach their homeownership goals with second and even third jobs in order to save extra money. Some are moving to smaller towns where housing is cheaper, while others are living with Mom and Dad in order to save on rent. But Fundrise, a Washington, D.C.-based start-up, has another, more creative solution.

Fundrise is a real estate crowdfunding start-up that sells shares in “eFunds” that build and/or remodel urban housing. An investor can be part of an eFund for $1,000, and the target audience is millennials.

Notes a recent Forbes article on the project: “(T)he goal is for a subset of the fund investors to become owners of the very places their money is helping build. Fundrise calls these ‘homebuyer investors’ or HBIs.”

So if a millennial could invest in a property today, he or she could be taking advantage of gains toward what might eventually become his or her home.

As well, says Forbes writer Samantha Sharf: “Fundrise’s effort is unique in tackling the dearth of affordable supply, which many economist [sic] agree is the biggest issue in the housing market today.”

The Fundrise project launched this past summer, so it’s too early to assess its success in encouraging new supply or in attracting millennials.
But this initiative may soon become one of many – millennials deserve their shot at homeownership too.

Green Renos Are Increasing by Leaps and Bounds

Not all home renovations are made in order to improve a home’s aesthetics or comfort. A June 2017 article in Real Estate Magazine took a look at a growing trend – additions and improvements for the purpose of improving a home’s efficiency and environmental friendliness – and its value.

Michael Garrity, CEO of finance company Financeit, told REM that in the past four years his company has seen a 200 per cent increase in the number of loans intended for “green” usage; and from 2013 to 2016, the company’s financing for residential solar projects alone increased by 232 per cent.

One homeowners’ survey conducted by the Canadian Home Builders’ Association (CHBA) indicated that energy efficiency was the third most desired factor in a new home purchase, behind cost and location. The reason: a desire on the part of homeowners to reduce utility costs.

As well, the past 30 years have brought continuous improvement in energy-saving technology, including heating and cooling and solar energy advances. Homes now use about half as much energy as they did in the 1980s, another CHBA survey found.

So what does this mean for homeowners and buyers? While upfront costs may be steep, they’re worth it. (Garrity suggests new state-of-the-art windows may cost between $5,000 and $15,000 while solar panel installation may be as high as $25,000, depending on the size of the project.)

Homeowners will benefit from reduced energy costs while they live in the home and see its value increased when they go to sell, because, increasingly, home buyers are willing to pay the price.