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, young Long Islanders have been successful in becoming first-time homebuyers. Some have settled for starter homes over dream homes, but others have resorted to continuing to rent or are considering 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 first-time buyer is higher than ever, Dusling said.

"People have pursued higher education, and it's taken this long to get to the point where they had their student loans paid off, so they could afford and qualify to get a mortgage," she said. "And 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."

Iglesias bought his home, located on the north shore of Suffolk County, in 2019. "It was a different market when I bought it," he said. "I was able to negotiate off the purchase price instead of negotiating up."

But because of setbacks millennials face today, Iglesias sees why attaining homeownership may take longer than before.

"I can understand why people are waiting now," he said. "Saving up more money, living in an apartment or with family. They're trying to make the right financial decision."

Cost of living, student loans make it harder to set down roots on Long Island

If the opportunity presents itself to move out of New York, I probably would.

Tneisha Greene, 29, of West Babylon

As an entrepreneur, Tneisha Greene feels tied to Long Island — even as the cost of living tries to push her away.

She's been running her business, Miss Empanada, for 10 years, and had it officially incorporated in 2020. Greene, 29, offers catering services for events and shipped frozen menu selections throughout New York State during the pandemic.

Her family inspired her to turn her passion into a business.

"I grew up in a cooking household," said Greene, who was raised in Central Islip. "My dad actually was a cook years ago, in a restaurant. So I used to just watch my parents and I always loved their creativity in the kitchen."

After moving out when she was 18, Greene lived in rentals across Long Island: Hauppauge, Massapequa, Copiague and now, West Babylon. She moved into her latest apartment at the end of the summer. Her priorities while apartment-hunting: Safety, diversity and price point.

After living on her own for a decade, Greene changed her plans this time.

"I decided to go with a roommate after I tried to do it on my own," she said. "I was already in the moving process and I wouldn't have been able to do this by myself. I needed someone else to split the cost to live comfortably."

Greene was tempted to leave New York, and spoke with her family about it. She believes the only options for renters on Long Island are to "get a roommate, get married or leave."

"I don't know where I would purchase a home at this present moment," she said. "My life is here; I kind of have to build my future here, and that's the part that makes it frustrating. But you never know what the future may hold. If the opportunity presents itself to move out of New York, I probably would." 

But in the meantime, Greene's business is reaching new heights on Long Island: She will be moving into her first brick-and-mortar location in West Babylon in October. 

She also hopes to someday use her business to address an important issue.

"One of the main reasons I've wanted a food truck is to be a primary source for feeding the homeless here on Long Island," she said.

The debt is really something that keeps coming up to the point where one client partnered with her mom to buy a property.

Yvette Hallman, 30, real estate agent

Hallman, a real estate agent with Pagano Properties in Jericho, usually works with clients older than her, in the 33 to 35 age bracket. When it comes to first-time homebuyers, she's found a common struggle among her millennial clients: student loans.

"The debt is really something that keeps coming up to the point where one client partnered with her mom to buy a property," she said. "She said with her student loans, she wouldn't qualify by herself."

Hallman, who rents a house in Queens, advises her clients to consider buying property with someone else while house-hunting.

"Don't think you have to do it alone," she said. "If you have a friend, sister, brother, people you can trust, you can be like, 'Hey, let's partner up and do this.' Together, you're stronger."

Her other main advice to millennials is to expand horizons while searching. "I'm not even looking in Long Island myself," she said. "So the advice I'm giving, is the advice I'm taking."

How to land your first home

Not all realtors listen. They can kind of parent you too much, if they're much older than you.

Katie Lamothe, 33

Katie Lamothe, 33, and her husband, Justin, 38, became homeowners in Smithtown this September. The couple plans to live with Katie's parents for six months during a renovation on their new house. They looked for homes throughout northern Suffolk County, with a focus on Smithtown, Setauket and Stony Brook.

"It's a full renovation," said Lamothe. "We have to redo all the bathrooms, kitchen, insulation, roofing. And every house we looked at, unless you have a million dollars, they're pretty much all fixer-uppers."

But Lamothe, who owns Desen Interiors, based in Plainview, is looking forward to the transformation. "Anything can be beautiful. I'm a sucker for an old home with good bones, and the ability to make it your own."

The Lamothes bought the house, which sits on a 0.42-acre lot, for $630,000. The four-bedroom, 2½-bathroom house was built in 1966.

As business owners (Justin runs On Point Powder Coating in Plainview), they had flexibility to view houses quickly when they went on the market, but it still took two years to find the right one. They started working with Dusling after putting offers on 15 other houses, Lamothe said. 

She felt that as a millennial, Dusling better understood their needs.

"Not all realtors listen," Lamothe said. "They can kind of parent you too much, if they're much older than you."

During the closing process, Lamothe learned that the previous owners bought the house in 1967 when they were in their early 20s.

"It was super nice because only one family has ever lived there," she said. "They brought it all full circle because the place was so loved and had so many wonderful memories. For people just starting the journey, hearing that makes you feel good."

What I would say is don't get discouraged. Homeownership is attainable, especially with the right resources.

Jamie Sanchez, 27, director of housing counseling at LIHP

Jamie Sanchez, 27, helps people take steps toward purchasing a home in her role at the Long Island Housing Partnership (LIHP). As director of housing counseling, she offers a first-time homebuyers orientation every month.

Sanchez, who has been with LIHP for four years, said the orientation has been a longtime offering, gaining even more popularity since switching from in-person gatherings to Zoom. Recently, the orientation hosted 78 participants, after initially holding the event in a conference room that had a capacity of 35, she said.

"It's really nice to see that even though times are tough, people are still looking for education on aspects of the home-buying process," said Sanchez, who lives in Brentwood and is currently looking to become a first-time homebuyer, too. "People are just looking to get informed."

The orientation has seen Long Islanders of all ages, from recent college graduates to senior citizens, Sanchez said. The stages of commitment range as well: From people just starting the process, to those ready to commit to a house. Sanchez also offers the orientation in Spanish.

Mostly, Long Islanders attend the orientation looking for general information, grant opportunities and other qualifications they may need to become homebuyers.

"It's definitely a tough market," Sanchez said. "What I would say is don't get discouraged. Homeownership is attainable, especially with the right resources."

Boomers vs. millennials: What's the state of today's real estate market, from Long Island real estate agents of two generations

On his own journey to becoming an agent: "I started as a first-time homebuyer, and I was clueless. I thought I knew what to do and what to expect just from watching HGTV twice. But in the initial process of doing research, I needed to contact a professional, and we got advice which now I give to prospective clients: Every homeowner has an advocate in their corner, and you should have one, too."

On how to be successful: "The factors outside of your control are increased interest rates, increased home prices, decreased inventory and increased buyer competition. So I'm teaching buyers what they can control: The location, the features of the home and the price. As a buyer, you can only control two and the market determines the third, so prioritize which of those are most important to you, and see the direction the market brings you."

On recent trends: "Millennial buyers making determinations for where they live and what they buy are increasingly more determined by their pets. Pets are an extension of their family, so they're making decisions based on serving their family."

On misconceptions: "There's a misconception that millennial buyers want to do everything themselves and just research it, but they want an advocate and resources for information, and someone to point them in right direction and help them through the process."

On trusted resources: "If you're looking for the most accurate information, go to OneKey MLS. That's where listings go first. They also have a downpayment resource icon on every listing, with programs available for that specific property."

On buying then vs. now: "Going back in time, the relationships you had with buyers in consulting them and going from a marketplace with a broad amount of inventory and working your way down, was really helping the buyer filter out and find what their true priority is. That's kind of been accelerated in recent years, because there's less to choose from, forcing them to go broader geographically."

On how house-hunting has evolved: "In the old days, the agent would control setting it up, but now buyers can use their mobile devices on a Friday evening, and want to be able to self serve and make adjustments. There are some buyers who ask us to set it up and that's fine, but they want to be empowered to make modifications to it as time goes on."

On filtering out the noise: "Family members or friends of buyers will try to help them about things they went through during their home-buying experience. But in my opinion, family and friends are sometimes doing a disservice, because times have changed. First-time homebuyers should find an agent, interview them and they'll represent you through the process."

Check out the Long Island Board of Realtors' resources for buyers and sellers here.

By Rachel Weiss

rachel.weiss@newsday.com@RachMWeiss

Rachel Weiss joined Newsday in 2016. As a real estate/living multimedia reporter, Rachel writes feature stories and contributes to and appears in on-camera video packages. She was the lead reporter on Newsday’s LI Acts of Kindness series.