MONEY Rentals

Rent Too $@#% High? These 7 Tips Can Get You a Better Deal

Jimmy McMillan, The Rent is Too Damn High guy
There are better ways to lower your rent than running for Governor of New York. David Shankbone

Rents are surging across the nation, but you don't need to join the "Rent is Too Damn High" party to get a discount.

Renters who aren’t leasing space under a rock have probably noticed prices are kind of insane lately. Since last year, rents are up everywhere (in some cities, over 10%), and an average 2-bedroom in a major city could cost as much as $3,550 a month.

Short of running for political office, how can you cut your rent bill from impossible to merely outrageous? We’ve got a couple of tips.

1. Have low realistic expectations

The economy is getting better, more people are going back to work, and most of them are renting. That means there’s a huge clamor for condos, especially in major metropolitan areas, and landlords can set their prices accordingly. Gary Malin, president of the New York City brokerage firm Citi Habitats, warns waiting for an out-of-this-world deal in a hot area is a sure way to end up with no place to live.

Instead of looking for a huge bargain, he suggests, try to negotiate somewhere between $25-100 off your monthly rent. (Talk in dollars, not percentages, so your landlord doesn’t have to break out a calculator.) In San Francisco, 50 bucks off might just be a 1% discount on a typical two-bedroom’s monthly bill, but over a year it works out to $600 in savings. That’s not nothing.

2. Show the landlord how awesome you are

How awesome you are as a tenant, that is. Someone with solid financials who will sign quickly can land a discount even in tight markets, Malin says.

Build a strong application by including all the necessary paperwork and emphasizing your strengths (current employment and great credit can go a long way). Complimenting the apartment doesn’t hurt. Include references from previous landlords: Niccole Schreck of Rent.com says letters from past property owners attesting to your amazingness can win your new lessor’s confidence—and maybe a bargain as well.

Try this: owners of smaller complexes have the most to lose if tenants don’t pay up. If you can show you’re a prize, you might nab a better deal in buildings with fewer units.

3. Go by the numbers

When asking for a discount, approach the landlord “intellectually, not emotionally,” Malin says. Translation: no sob stories. Instead, do your research and show the property manager why you should get a better rate. Schreck advises renters to look up the prices of other units in the neighborhood (use Rent.com and similar sites) and make notes of the amenities other buildings offer, like gyms or laundry rooms. If surrounding real estate rents for less or offers more perks, use that to your advantage.

4. Be flexible about location, location, location

Jason Kaczmarczyk, partner at the Boston-based Encore Realty, says he saves clients thousands by steering them from the sought-after Brookline neighborhood to the more affordable Cleveland Circle. The kicker? Cleveland Circle is just feet from the Brookline town limits—and it has free parking.

To find a cheaper area, use your commute time to create a list of all the neighborhoods where you could feasibly live. At Trulia.com, enter where you work and generate a map of your city, color-coded by shortest travel time. From there, look for lower-priced parts of town.

5. Wait for winter

The summer months are the No. 1 season for new leases, meaning huge competition and high rates. Once temperatures drop, so do prices, as landlords get antsy. Consider subletting for the summer and starting your search in October or November. Malin says landlords who don’t rent a unit by Thanksgiving might cut rent by up to 10% to avoid the risk it will sit empty until January.

Off-season renters are also twice as likely to find “move-in incentives” such as paying brokerage fees, a free month’s rent, or complimentary gym membership. Some landlords prefer these over discounts, and Schreck says they’re typically easier to negotiate.

Keep in mind though: it’s no fun to move in the snow.

6. Read the lease agreement

We know you’re excited, but rushing through your lease can cost you bigtime. As MONEY’s Amanda Gengler writes, a recent Rent.com survey found that 26% of renters lost their entire security deposit. She recommends checking the fine print—painting your apartment or putting holes in the walls might be off limits—and making sure anything the landlord tells you in person (“of COURSE you can have a cat!”) is in writing, attached to the lease if necessary. Check that the utility bills included in your rent match the landlord’s promises.

7. Offer to sign a longer lease

The one thing landlords hate most is vacancies, and signing for longer means your property owner won’t have to worry about filling your apartment for an additional year. This may not work in hot spots like New York City, as landlords prefer to reassess market conditions at the end of every year and decide whether (read: how much) to raise rent.

But in slower markets with more vacancies, a longer lease can earn you some concessions. Rent.com has a list of the 10 fastest growing cities (ie. places people actually want to live) with above average vacancy rates to help you decide if you should use this tactic.

More: Rents Just Won’t Stop Going Up

MONEY Housing Market

The Future’s Most Walkable Cities: Prepare to Be Surprised

061417_REA_boston
Urbanization of next-door neighbor Cambridge is one of the chief reasons Boston's walkability is on the rise. Boston Harbor Association—Boston Harbor Association

Walkable urban places are the cities of the future, a new study says. And where will those be? New York, Boston? Try Miami and Phoenix. No, we're not kidding.

If you live in Washington D.C., New York City or Boston and your legs are your main mode of transport, this won’t be news to you: These three cities rank among the country’s most walkable large cities, and they are destined to remain so.

After those top three, watch out: Cities known more for suburban sprawl and traffic jams have new development planned that will shoot them up into the top scores as “walkable urban place,” or, WalkUPs, as researchers at George Washington University and advocacy group Smart Growth America call them.

Miami, Detroit, Denver, and Tampa will vault into the new Top 10 large WalkUPs, according to a new study released today. Atlanta, Los Angeles and Phoenix will also take a big leap forward. Future rankings are based on things like planned investment in public transportation and commercial clusters.

jefferson memorial
D.C. ranks No. 1. Its suburbs are as walkable as the central city. Destination DC—Destination DC

“The WalkUPs are witnessing the end of sprawl,” said Christopher Leinberger, a professor of urban real estate at George Washington University School of Business. “This is a change in how we built the country in the 20th century.” Suburban sprawl, he argues, has constrained the country’s economic growth.

Walkable urban places, sometimes referred to as urban burbs, have high concentrations of college-educated adults and demonstrate a strong correlation between urban development, education and economic growth. Office rents in urbanized areas, for example, command a 74% premium over suburban. (Researchers focused on the 30 largest metropolitan areas because they comprise 46% of the U.S. population and 58% of the country’s GDP.)

And homeowners, take note: Walkability and proximity to shopping, restaurants and work are becoming increasingly important to buyers, especially young buyers. Research has shown that increases in measures of walkability such as WalkScore translate into increased property values.

Today’s Top 15 Walkable Cities

1. Washington, D.C.
2. New York City
3. Boston
4. San Francisco
5. Chicago
6. Seattle
7. Portland, Ore.
8. Atlanta
9. Pittsburgh
10. Cleveland
11. Baltimore
12. Miami
13. Philadelphia
14. Denver
15. Houston
Least Walkable: Tampa, Phoenix, Orlando

The Future’s Most Walkable Cities

1. Boston
2. Washington, D.C.
3. New York City
4. Miami
5. Atlanta
6. Seattle
7. San Francisco
8. Detroit
9. Denver
10. Tampa
11. Los Angeles
12. Phoenix
13. Houston
14. Portland
15. Chicago
Least Walkable: San Diego, Kansas City, San Antonio

MONEY buying a home

Top Reasons Millennials Shouldn’t Buy a Home — Yet

couple standing by outline of house
Martin Barraud—Getty Images/OJO Images

Many millennials want to buy a home. But maybe they shouldn't just yet, says Trulia's consumer expert.

There are many reasons to buy your first home, including dozens of financial benefits and lifestyle benefits. And right now, it’s a buyer’s market; interest rates are still low, hitting 4.34% for a 30 year fixed loan this month. According to the latest Trulia survey, 68% of Millennials are in the market for a home priced at $200,000 or lower. However, home buying is not for everyone. For all the positive aspects to home ownership, there are some very compelling reasons not to buy a home right now. So, if you’re ready to jump headfirst into the ‘American Dream,’ read this first.

More: Why This Millennial Will Send My Son To College Before He Buys a Home

Losing Flexibility

Home ownership provides stability, but that may not always be a good thing when you are in your career-building years. If you are looking for a promotion, an advance, or job change, you may have to relocate to get to that next level. You need to have the ability to move on short notice, maybe even as fast as 30 to 60 days. Having to sell your home quickly could force you to offer it up at a bargain price to snag a buyer, in addition to incurring thousands of dollars of closing costs.

No Room For Baby

Millennials are in the prime years for starting families. You may not have one now, but chances are you may in the near future. So, buying that cozy home or condo perfect for the two of you may not be such a great idea when baby makes three. Afterall, having a baby is stressful enough. Having to sell your house to buy a larger one with a due date looming can be unbearably stressful, costly, and may even put you in the red.

Five Years In

If for any reason you think you may not be able to stay in your home for five to seven years, you should not buy. It will be cheaper to rent. The rule of thumb used to be seven years, but now that the housing market is stabilizing, that timeline has shifted slightly. With only moderate market appreciation, it will generally take five years for you to recoup the costs of buying, selling, and carrying costs. Unfortunately, in the first years of your mortgage, you won’t be building up too much equity. Banks charge a hefty portion of your interest upfront, with very little going to your principal in the first few years.

No Money Down, No House

If you don’t have enough money saved for a down payment, don’t buy a house right now. I am a big proponent of 20% down. That is not always feasible for most Millennials starting out, and it is lot of money to have saved up. But, unfortunately, it is the safest, most conservative approach to home ownership. If you can’t bank on Mom and Dad for a leg up on the down payment, then you need to keep saving.

Too Much Debt

Student loans, car loans, and any other debt you have accumulated are all reasons not to buy a house just yet. You will need to pay down your debt first. Not only will a home purchase put a dent in you debt reduction plan, banks will not be willing to approve you for a loan with a high debt-to-income ratio.

Shaky Job Security

First, purchasing a home with today’s new qualified loan standards requires some consistent job history. When you’re in the early stages of your career, there may be jumps and gaps in your history, so getting the loan is going to be a challenge. Once you own a home, be aware that job situations can change overnight. Losing a job, periods of unemployment, and changes in income are not as easily weathered when you own a home. Your income may change, but your housing costs will remain the same. You won’t be able to quickly downsize, leaving you to sell your home out of financial desperation.

Cash Poor

Home buying often leaves buyers cash poor. After you dip into your savings to come up with the down payment, the closing costs, and any renovation that you need to make prior to moving in could leave your bank account in the double digits. That is not the way you want to start living the ‘American Dream.’ Make sure you will have enough cash leftover to weather a job loss, an unexpected emergency, or even a health issue that could impact your earning power. Bottom line: Don’t end up house rich, cash poor and emergency fundless.

More from Trulia:
9 Things to Look For When Touring An Open House
The Pros and Cons of Buying a Newly Built Home
The 10 Most Costly Home Selling Mistakes – & How To Avoid Them

Michael Corbett is Trulia‘s real estate and lifestyle expert. He hosts NBC’s EXTRA’s Mansions and Millionaires and has authored three books on real estate, including Before You Buy!

MONEY selling a home

Selling An Upscale Home? You’re in Luck. Sales Remain Strong.

Sales of higher-priced homes continue to outpace the lower tier, according to April figures. Check out our tips for buyers, sellers and owners.

If you’re trying to sell a home priced above $500,000, you’re in luck. Demand for those upscale homes keeps humming along, at least for now, according to National Association of Realtor figures for April.

Sales in the lowest price tier fell by 12% while sales in higher-priced categories were up by 0 to 5% from a year ago, wrote Danielle Hale, NAR’s director of housing statistics, on the association’s economists blog. The share of home sales above $500,000 or more rose from 10.8% to 11.6%.

Here is how sales changed year-over-year in April by price tier:

Price %Change
<$100,000 -12%
$100k-$250k -5.1%
$250k-$500k 0.2%
$500-$750k 0.3%
$750k-$1M 2.4%
>$1M 5.2%

 

Part of the reason for the disparity is that there are fewer lower-priced homes on the market. Investors and first-time buyers already have snapped up most of those properties; price gains have pushed homes into upper tiers as well.

Hale noted that the trend is slowing. In April of last year, for example, sales then of homes in the $500,000-$750,000 tier were up 33.6% from April 2012. This year, the gain was just 0.3%.

For now, generally the higher-priced homes within a town are selling better. How you’ll know if your home is in the top tier: Check Zillow’s Local Info page for your town. There you’ll find the median home values for the low, middle, and top price tiers in your market. Then, gauge the strength of your specific tier by asking your agent for the inventory and days-on-market stats for homes in your range.

Trying to sell an upscale home? Or buy one? Check out these tips:

BUYERS

Time it right. Want a more expensive home? Buy now before prices climb. However, if you live in a pricey house but are looking to downsize to something less expensive, it may be worth waiting for your current home to appreciate.

Look at jumbos. Will you need a large mortgage (typically more than $417,000)? The premium over what you’d pay for a smaller loan, which grew as wide as two full percentage points during the bust, has shrunk to next to nothing. Big banks often offer the best rates and options on these types of loans, says Keith Gumbinger of mortgage publisher HSH.com.

Don’t dismiss ARMs. While rising rates are a very real risk, ARMs at least deserve a look if you’re taking a big loan, says Gumbinger.

Buy for the future. Nearly 25% of owners regret the size of the home they picked, according to a Trulia study. With prices expected to climb, high-end homes are likely to be more affordable than they will be in the future, so think about how much space you’ll need in the coming years and buy appropriately.

Don’t go it alone. A recent study found that buyers of homes priced at more than $300,000 are more likely to try to negotiate the deal themselves than buyers of more moderately priced properties, says co-author Bennie Waller, professor of finance and real estate at Longwood University. It doesn’t end well: The DIYers end up paying an average of 9% more than those who use their own agent.

SELLERS

Price carefully. With sales of higher-end properties picking up, homes are increasingly “stigmatized if they stay on the market too long,” says Judson Henderson, a broker in Princeton, N.J.

Overprice, and your place could be the one with the black mark. If you’re unsure, pay the $500 or so for an appraisal. Also, if your home is older than 20 years, get an inspection to make sure your structure is sound, and your HVAC, plumbing, and electrical systems function smoothly. Fix whatever’s on the fritz. “You don’t want people feeling like the house is a project,” says Henderson.

Make your listing tech-friendly. Most shoppers, and particularly those in the market for upscale houses, will be looking at your home on phones and tablets, says Amy Bohutinsky, chief marketing officer at Zillow. Photos on these gadgets need a higher resolution than what’s required by a desktop. Check your listing on a mobile device to make sure it looks great. Some buyers may look at photos of your home on Google, so you should do the same (type your address into the map search, then click on the Street View tab). If the photo is outdated or taken in winter, note that in your listing.

Highlight the right features. According to a study by the National Association of Home Builders, buyers who expect to pay at least $500,000 today put warming drawers, wine fridges, and outdoor kitchens high on their wish lists. If your home has these or other unique selling points, mention them in your listing.

OWNERS

Renovate sooner, not later. Don’t let dated features drag down the value of your home. Owners thinking about remodeling have good reason to act now. Quality contractors, already busier than they have been in recent years, are likely to get even tougher to snag. Then there’s the issue of rising rates, which would push up the cost of new home-equity loans and most lines of credit.

MONEY Rentals

The Top 10 Cities for Singles Who Rent

If you're single and looking for a place to live, here are the 10 best cities for those ready to mingle.

Thinking of moving to a new city? Lots of lists will help you find places with the lowest (or most outrageous) housing prices and highest incomes, but for young people looking to meet someone, there are more things to consider than pure affordability.

Rent.com partnered with Onboard Informatics to rank cities based on factors like quality of nightlife, restaurants, lifestyle (what percentage of residents do things like attend concerts and cultural events), and, primarily, the percentage of single adults.

Here’s what they found.

Methodology: All indexes were ranked on a scale of 1-1000. This list is based on cities with more than 50,000 rental dwellings, a high concentration of single adults and an overall population greater than 100,000. More details here.

  • San Francisco, CA

    It may be expensive, but the City by the Bay is safe, ranks high on lifestyle, and the average income is off the charts. Best of all? 39% of town is single.

    The Good

    Single Adults: 39%

    Non-Family Households: 58%

    Average Household Income: $104,540

    Safety Index: 822

    Lifestyle Index: 736

    The Bad

    Median Rental Rate (1BR): $2,920

    Nightlife Options Index: 374

    Restaurant Option Index: 236

     

     

     

  • Manhattan, NY

    When it comes to nightlife, lifestyle, and great food, nobody tops the Big Apple. Like SF, cost is a (huge) factor, but if you can afford it, there’s nowhere better.

    The Good

    Single Adults: 38%

    Non-Family Households: 60%

    Average Household Income: $125,205

    Safety Index: 896

    Lifestyle Index: 781

    Nightlife Options Index: 1000

    Restaurant Option Index: 1000

    Frequent Coffee Shop Goers Index: 1000

    The Bad

    Median Rental Rate (1BR): $3,800

     

     

  • Washington, D.C.

    It’s a company town, but that town is very single and very safe. Average salaries are also high, but there isn’t much nightlife or fine dining to spend that disposable income on.

    The Good

    Single Adults: 38%

    Non-Family Households: 58%

    Average Household Income: $93,637

    Safety Index: 776

    Lifestyle Index: 652

    The Bad

    Median Rental Rate (1BR): $2,300

    Nightlife Options Index: 173

    Restaurant Option Index: 228

     

     

     

  • Boston, MA

    The Hub’s restaurant and nightlife options don’t exactly compare to New York, but it’s a safe, fun city where one-third of the adult population is single.

    The Good

    Single Adults: 33%

    Non-Family Households: 55%

    Average Household Income: $76,661

    Safety Index: 719

    Lifestyle Index: 671

    The Bad

    Median Rental Rate (1BR): $3,150

    Nightlife Options Index: 192

    Restaurant Option Index: 224

     

     

  • Seattle, WA

    The second West Coast city on the list boasts lots of restaurant goers, good cultural events, and rentals in the neighborhood of affordable—at least for a big city.

    The Good

    Single Adults: 30%

    Non-Family Households: 57%

    Average Household Income: $88,211

    Lifestyle Index: 732

    Frequent Restaurant Goers Index: 616

    The Bad

    Median Rental Rate (1BR): $1,584

    Nightlife Options Index: 302

    Restaurant Option Index: 199

  • Philadelphia, PA

    Philly can’t stand up to higher-ranked towns in most categories, but the rent isn’t too bad, more than a fourth of the population is single, and the nightlife is better than all but a few cities on this list.

    The Good

    Single Adults: 26%

    Median Rental Rate (1BR): $1,295

    Safety Index: 686

    Nightlife Options Index: 502

    The Bad

    Restaurant Option Index: 340

    Frequent Restaurant Goers Index: 439

  • Minneapolis, MN

    The most notable of the Twin Cities has lots of singles and lots of rental housing. Nothing too special as we approach the back of the list, but Minneapolis stands her ground in most categories.

    The Good

    Single Adults: 25%

    Non-Family Households: 57%

    Median Rental Rate (1BR): $1,395

    Lifestyle Index: 643

    Frequent Restaurant Goers Index: 555

    The Bad

    Nightlife Options Index: 149

    Restaurant Option Index: 108

     

     

  • Portland, OR

    Portlandia‘s home is safe, fun, and great for people who like to eat out. The rent is also relatively low compared to other listed cities.

    The Good

    Single Adults: 24%

    Median Rental Rate (1BR): $1,335

    Safety Index: 632

    Lifestyle Index: 668

    Frequent Restaurant Goers Index: 585

    The Bad

    Nightlife Options Index: 383

    Restaurant Option Index: 168

  • Jersey City, NJ

    Jersey is safe and good for restaurants and culture, but the price of rent might make you think twice.

    The Good

    Single Adults: 23%

    Average Household Income: $77,804

    Safety Index: 766

    Lifestyle Index: 623

    Restaurant Option Index: 512

    The Bad

    Median Rental Rate (1BR): $2,480

    Nightlife Options Index: 421

  • Chicago, IL

    Chi-Town has the cheapest median rent on the list, with high nightlife and lifestyle ratings to boot. It’s also safer (on the whole) than you probably think.

    The Good

    Single Adults: 23%

    Median Rental Rate (1BR): $1,150

    Safety Index: 665

    Lifestyle Index: 604

    Nightlife Options Index: 869

    Restaurant Option Index: 507

    The Bad

    Frequent Restaurant Goers Index: 475

MONEY home improvement

How to Set a Landscaping Budget—and Stick to It

The right landscaping adds value to your property, so before you undertake a landscaping redo, understand your needs and make a proper budget.

Designing a landscape that suits your home, as well as your budget, is an important part of home ownership. It’s important to ensure you have the type of yard that fits your current needs, as well as establishing critical curb appeal for future sale. Regardless of the size of your property, beautiful landscaping adds value to your property. Before undertaking a landscaping renovation or upgrade, spend some time assessing your wants and needs and understanding the cost drivers for a project of this size.

Landscaping budget basics

A budget is an itemized description of anticipated expenses for your landscaping project. Your budget should be realistic, organized, detailed and easily to track. Establishing a budget helps you determine what is required to complete the landscaping project and should include how much each item should cost.

Effective budgeting is more than just planning. A responsible homeowner will monitor the budget closely and be conscious of the investment, regardless of who is actually performing the work. Build in some flexibility wherever possible to ensure your project can handle the unexpected. Depending on the size of the lot and the complexity of the landscaping project, a landscaping budget spreadsheet need not be lengthy, but it should be detailed enough to be reasonably accurate.

How to start your landscaping budget

Planning your landscape can be an enjoyable part of the pre-planning phase. Bringing these visions to reality starts with research to find the actual costs of what you want included based on the size of your property. Start with a general list of what projects you’d like to complete such as:

  • irrigation installation
  • lawn servicing
  • tree removal or limb pruning
  • general maintenance
  • new plants and shrubbery
  • excavation
  • water features
  • new dirt or mulch
  • hardscaping projects like patios, pathways, rockery or arbors
  • organic garden set-up
  • edible plants
  • fences or retaining walls
  • address drainage issues
  • flower bed preparation and planting
  • exterior lighting
  • outdoor entertainment features like firepit, built-in seating, or outdoor kitchens

In addition to specific actions, make a priority list of which areas of the property you’d like to focus on. Depending upon your land, you may want to improve the entire front, back and side yards or you may just want to focus on one area outside. Breaking up the landscaping renovation into different stages is an especially good idea if you have a limited budget or a large amount of land.

Keeping your landscape project on budget

Once you’ve put together your initial list of needs, make a note of who will be doing the work. If you plan on doing most of the work yourself, be realistic about your time and skills. If you have time to shop around and work on the weekends, your budget can be spread out over a longer period of time. You can also save money by waiting for sales or purchasing items in the off season.

If you plan on hiring a professional to do most or part of the work, have a clear idea of what you need them to do. Your pre-planning meetings should be detailed and thorough and allow time for any drawings to be made. Your professional will advise you to how long this project will take to complete and provide you with a quote or bid for the project. Once you’ve signed off on the bid, and signed a contract for the work, the project can begin.

Regardless of who is performing the work, keep track of expenses. For you DIY landscaping, this could mean keeping a simple spreadsheet of costs or tool rentals. For your professional, your quote should detail all expenses and fees. If any changes are made during the course of the project, a change work order form should be completed and signed by both parties. This ensures a paper trail is in place tracking all changes and costs. Check in regularly with your landscaper to ensure that the project is going according to plan and ask to be alerted to any potential changes in the budget. Be aware of professionals who may also charge for their consultation time. They should alert you if any of your phone calls or consulting appointments are costing you money.

Other cost drivers for landscaping projects

Depending upon the scope of your project, you may need to obtain a permit. Some fence designs, retaining walls or excavation, for example, may require a permit. It is the responsibility of the homeowner to ensure that the proper paperwork is filed and you can check with your local department of development and planning to see if your particular project requires a permit. Or check with your professional, who can obtain the permit on your behalf.

Delays in materials or shipping can increase your costs. If you budget is flexible you may be able to afford overnight shipping or change your material selection. Seasonal changes may also affect your budget, especially if you are trying to hire a professional during their busiest time of year.

More from Porch:
Keeping Your Workshop Remodel on Schedule
The Golden Triangle: Designing an Efficient Kitchen
How to Keep Pest Control Costs Under Control

Anne Reagan is the editor-in-chief of home improvement website Porch.com.

MONEY First-Time Dad

Why I’ll Send My Infant Son to College Before I Buy a House

061416_FF_Luke_1
Luke Tepper Taylor Tepper

With housing so expensive, I figure my young family will be renting for foreseeable future. The latest on being a new dad, a Millennial, and (pretty) broke.

Mrs. Tepper and I are 28 years old, and our son is four months. Over the past year, Luke has acquired an $800 stroller, a $250 crib, and a $50 humidifier. (Before you make fun, understand that he constantly bore a stuffy morning nose, and what kind of monster wouldn’t spend a measly $50 to help his only son sleep soundly?!)

We’ve begun funding Luke’s New York 529 college savings account in order to spot his entire higher education bill (provided he goes to a state school), and we, of course, will pay his medical expenses for the next 26 years.

But there is one thing that we will not buy him—a house. In all likelihood (which means unless we win the lottery, or someone gives us a hundred thousand dollars), we will put our son through college before we buy our family a home.

Which, when you think about it, is strange. Last year we earned almost $110,000 and that will (hopefully) increase rapidly as we enter our career primes. We hardly travel (much to our chagrin) and have a reasonable $300 monthly car payment. Mrs. Tepper really only shops for (baby) clothes on sale, online, or both, and my main indulgence is a bimonthly $45 bottle of Templeton rye whiskey.

Why then will we be renters, at least until we’re in our fifties?

Reason #1: It’s (Really) Hard to Save

We live in a two-bedroom apartment in Brooklyn with cheap wood cabinets and a kind of white plaster countertop that stains as easily as a peach bruises. In the afternoon it often takes five minutes for the water to go from warm to hot. We don’t have a washing machine—neither does our building, which was built during the Hoover administration—and I do our dishes by hand because we don’t have a dishwasher.

Next year our rent will be $2,020 (and that doesn’t include gas, electricity, cable, Internet, or whiskey).

Eventually we’ll decamp for the ‘burbs for the sake of space and sanity, but with that move comes higher mass transit costs (an $1,800 yearly increase) and more house to heat and furnish and maintain.

The Dave Ramsey in me says I should find more ways to cut spending: no more occasional brunches or flights to Florida. (Luke can meet his grandparents on Skype!) But those hypothetical savings are peanuts in the grand scheme of things, and the me that wants to stay married shuts Dave Ramsey up.

Read: Half of Millennials Will Ask Mom and Dad to Help Them Buy a Home

Reason #2: Student Loans

In order to gain our cushy, 50-hour-a-week jobs, both Mrs. Tepper and I attended (public) graduate school. That came on top of studying at New York University for four years and (seemingly) $550,000,000.

So we have loans. Lots of them. (I alone owe almost $60,000.) Obviously we are not the only ones tied up in the web of student loan bills. People like me now owe almost $1.1 trillion, according to the Federal Reserve Bank of New York, or about twice as much as in 2008, when my wife and I graduated college.

I’m now paying $350 a month—and that’s mostly interest.

Reason #3: Houses Are Expensive

In New York City, the median home price is $369,000, and that comes with a median down payment of $74,000, per a recent Redfin report. In Nassau County, which is out on Long Island, you need to put $88,000 down.

Needless to say, we don’t have that kind of money, nor will we anytime soon.

And that–expensive rent, student loans, and homes—doesn’t even take into account the $1,500 a month gorilla in the room (child care) or, you know, Christmas presents.

Look, there are worse things than not buying a house (like not having a job or being a Dallas Cowboys fan.) We have a happy, healthy family, with sunny days ahead, and maybe we’ll find a way to save a buck or two over the years.

But not that long ago, it took only one middle class job in the family to afford a home. Now, according to the Redfin report and my life, two doesn’t cut it. When the prospect of owning the roof over your family’s head is so far gone, is it really that crazy to buy a $50 humidifier for your son?

MORE: Why Does My One Baby Need Two of Everything?

MORE: How Can Child Care Cost as Much as Rent?

 

MONEY home improvement

This 1920s Home Was a Mess Before These Guys Got Hold of It

This Queen Anne home in Baltimore had a lot going for it: Proximity to universities, shopping and job hubs. Historic details. But it was, well, a hot mess. Here’s how this $110,900 renovation transformed the three-story home into a showplace. Story and photos from home improvement website Porch.com.

MONEY

Are Baby Boomers Downsizing Into Condos? Not So Fast.

Baby Boomers talk about downsizing but apparently don't do it. Trulia's economist says the long-term trend among older households shows downsizing getting rarer and happening later in life.

Throughout the recession and recovery, Millennials have hogged the attention: they suffered a particularly bad recession, which delayed their launch into the housing market, slowed overall household formation, and lowered first-time homeownership. But they’re hardly the only demographic that matters for housing. Baby Boomers will help determine the demand for different types of housing and the supply of homes for sale when – and if – they downsize.

This morning, Fannie Mae released a note on boomer downsizing, showing that the share of baby boomers in single-family detached homes has been roughly stable from 2006-2012 (rising slightly on a per-capita basis and falling slightly in the most recent years on a per-household basis). The big question is what happens longer term: are we about to hit a wave of baby boomers selling their single-family homes and moving into apartments and condos? It’s unlikely, for two reasons: baby boomers are still years away from the age of downsizing, and the long-term trend shows that older households today are less likely to downsize than older adults in the past.

Let’s start by looking at the age when older households move from single-family homes to multi-unit buildings. Based on the 2013 Current Population Survey’s Annual Social and Economic Supplement (CPS ASEC) – the most recent detailed demographic data available – baby boomers (born between 1946 and 1964, which means 50-68 years old in 2014) are less likely than almost any other age group to live in multi-unit buildings as opposed to single-family homes. The only age group less likely to live in multi-unit buildings is 70-74 year-olds, which is the age group that baby boomers will start to enter in the coming years.

In later years, the share of households in multi-unit buildings rises, but by less than you might guess. Just 25% of households headed by 80-84 year-olds live in multi-unit buildings – which is a lower share than 40-44 year-olds. Even among households headed by adults aged 85 and older, only one-third live in multi-unit buildings – and that’s only counting those who head their own household are not living with adult children or in institutions.

Therefore, as today’s baby boomers age, they’ll grow into age groups first with a lower likelihood of living in multi-unit buildings (70-74 year-olds). Multi-unit living starts rising slightly at age 75-79, and rises more notably only when heads of household reach their 80s.

But will baby boomers, who are in their 50s and 60s today, look like today’s 60- and 70-somethings ten years from now – or will they make different housing decision as they age? One clue is to look at the longer-term trend in multi-unit living among older age groups using CPS ASEC data back to 1979 (no data are available for 1988). The share of households headed by 50-69 year-olds – roughly the age of baby boomers today – living in multi-unit buildings rose to 21.3% in 2012 and 21.6% in 2013, after holding steady in the 19-21% range for decades. Therefore, baby boomers today are a bit more likely than their parents to live in multi-unit buildings instead of single-family homes. It’s too soon to tell whether that increase is a temporary effect of the recession or the beginning of a longer-term trend.

The clearer long-term trend, though, is the decline in multi-unit living at the ages that baby boomers are approaching. The share of age-70-plus households living in multi-unit buildings has been dropping for decades, from over 30% in 1980 to under 25% in recent years. That means that even if the recent uptick in multi-unit living among 50-69 year-olds persists, baby boomers are entering an age group that is less likely to live in multi-unit buildings than their own parents did two or three decades earlier. While the cyclical effect of the recession might hasten downsizing for some boomers, the long-term secular trend means boomers are reaching older adulthood in an era when downsizing is less common and comes later in life than it used to.

Note: the CPS ASEC data were downloaded from IPUMS, which requests to be cited as: Miriam King, Steven Ruggles, J. Trent Alexander, Sarah Flood, Katie Genadek, Matthew B. Schroeder, Brandon Trampe, and Rebecca Vick.Integrated Public Use Microdata Series, Current Population Survey: Version 3.0. [Machine-readable database]. Minneapolis: University of Minnesota, 2010.

See the complete article with charts on Trulia.

Jed Kolko is the chief economist of Trulia.

Your browser, Internet Explorer 8 or below, is out of date. It has known security flaws and may not display all features of this and other websites.

Learn how to update your browser