Is it possible to own real estate in your 20s?
My boyfriend Ryan and I have talked about our desire to buy property for as long as I can remember. We just celebrated our 7-year anniversary and I think we’ve talked about homeownership the entire 7 years. As we grow older (and get closer to 30), I can’t help but wonder if it’s even possible to own real estate in your 20s – specifically in desirable places like coastal Southern California.
As of now, I have zero interest in owning anything out of state – dealing with tenants and property management from afar seems daunting and like a pain. But as we all know, prices in our area are soaring and with high interest rates, owning either my primary residence or an investment property doesn’t seem all that beneficial if rents aren’t increasing as quickly as home prices. Why take out a loan that will result in a $5,000+ monthly mortgage payment when our rent is under $3,000?
A sizable down payment is almost a necessity with the current rates. Sure there’s FHA loans, but only putting 3.5% down doesn’t help my situation unless I can afford a large monthly mortgage plus the insurance, property taxes, HOA fees, maintenance, etc. I’d rather wait until I have a larger sum to put down.
So how are people actually buying homes at a young age?
I have a friend who received a grant that gave him $50k towards his down payment, so he ended up buying a fixer and thus had more cash to put towards renovations. The program is no longer accepting applicants, but see here for more info.
In a recent survey, 60% of Gen Z and 57% of millennials who purchased homes said they couldn’t have done it without family support.
As “starter homes” are becoming increasingly expensive, younger buyers are opting for condos or the less desirable areas. The cheapest single family home listed for sale in Carlsbad at the time of this writing is $925,000. If you go out to Escondido, you can get a SFR for less than $600,000!
All in all, it’s still possible to purchase real estate in your 20s; it just requires extra assistance, widening the search, settling for what might not be your “dream home,” and careful planning!
I’m sure we will share if I do buy something before I hit 30 – stay tuned!
Some statistics:
The median age of first-time buyers rose to 38, up from 35 in 2023 and from the late 20s in the 1980s.
The typical first-time buyer has a household income of $97,000, reflecting a $26,000 increase over two years.
In 2024, first-time buyers made up just 24% of all home buyers, the lowest share since tracking began in 1981.
The median down payment for first-time buyers is 9%, the highest since 1997.
Ninety-one percent of first-time buyers financed their home, and 25% used a gift or loan from family or friends to help fund the down payment.
The largest barrier to affordable housing is that first time buyers are now competing with corporate buyers with more resources and experience for the same properties. And if the first time buyer wins? The corporate owner’s existing portfolio is worth all that much more.
Ask mom and dad for the down payment.
You will be impressed to learn that they have already saved enough for a 20% down payment and can qualify for the rest!
I suspect they have already secured “good help.”
Congrats on saving the 20%. Job well done!