Millennial housing struggles – it ain’t all avocado toast

Millennial housing struggles – it ain’t all avocado toast

It ain’t all avocado toast folks.  At least that’s what I hear from millennials now and then.

Avocado Toast

(notes:  Depending upon your source, demographers and researches typically define millennials as those born between the early 1980s, as the early birth years, and the mid-1990s to early-2000s as the ending birth years. Millennials are sometimes referred to as “echo boomers” due to major surges in birth rates experienced during this window.)

Millennials have argued they have it FAR worse than their parents…debt is normal; student loans are astronomical, housing is largely unaffordable – this list goes on.

Boomers have fought back – there has certainly been a fair share of millennial bashing in recent years.

First person housing struggles

In the My Own Advisor inbox this spring, I received a few emails asking for help, guidance and general perspectives on how, when, and where to invest.  I also received a few emails on housing and what to do – rent or buy.

Instead of providing my own take, I thought I would share one back-and-forth email discussion I had with a millennial recently – a fan of this site.  I mean, who better to share what millennial’s think about on housing than a millennial.  Here is his Tyler’s take and experiences.

Tyler, can you tell me a bit about yourself, for readers, so they have some context?

Sure Mark.  I’m 27, living in my hometown, a small town about 90 minutes southwest of Toronto. I took kinesiology in university, but I’m now managing a rural grain elevator (if you’re looking to bore readers I can write more about my job)!

Long story short, after I got my kinesiology degree from Laurier, I largely ignored it and got into the fertilizer game, where I had worked during the summers. The money is okay and for the most part I like the work – which is why I do it.

Interesting, so you’re not working in the field you chose.  Do you feel that investment (university) was a poor decision?  Thoughts? 

University was incredible.  I think most people who went would tell you from an experience point of view alone it was worth it. You do a lot of growing up – you have to work up the ambition to go to class and study, you have to prioritize your days, you have to run a rudimentary budget (even if it’s all fueled by student loan debt).

Besides the experience, I do think university was worth it even if I’m not using my education for my career.

In retrospect, university taught me to think. Now, many young adults don’t heed the lessons, but it was in university that I really learned statistics, to seek out sources, to think critically, how to prioritize information, etc. While I do not need to know the insertion of tibialis anterior (the muscle on your shin, I still remember a few things!) to serve farmers at my day job, every day I use the thinking skills I learned.

My advice to students is just to apply thought to your plans after high school. I went to university because I had good grades in high school and I thought that’s what the students with good grades are supposed to do. I went to Laurier because my uncle did and I chose kinesiology because I liked working out.

Everything worked out okay in the end, but if someone had told me to sit down and imagine my ideal life in 20 years, I probably wouldn’t have made the same decisions.

Let’s talk about housing.  Almost every 20- or even 30-something I read about or hear about wants to own a home.  Why?  Where do you think this comes from even if it’s not the right financial decision?

Well, I can speak for myself.  A few years ago, I was renting and had no plans or desire to own a house.

Housing was too expensive.

Fast forward a couple of years, things change.

Most people I interact with, including online, are in the cities (mostly Toronto).  Housing prices are crazy there. I don’t blame my fellow millennials for feeling disheartened by real estate.

I mean, the cities are where most people want to be, and for good reason. That’s where the jobs are, that’s where the things to do are, and urbanization is a trend that is not going away.

My housing story has two parts.

Part 1:

I was living and working in a very expensive housing market, even closer to Toronto, and I had no choice but to rent.  I started out in a 1-bedroom basement apartment until the landlord upstairs sold the house for what he said was “an offer he couldn’t refuse”.  After that I moved into a 3-bedroom newly built townhouse, I immediately rented out the other two bedrooms to help pay the rent. (I could’ve afforded the place on my own, but I wouldn’t have been saving any money – I would have been very house poor…)

Renting out the bedrooms was annoying (not great tenants and none stayed long) but it was the only way I could achieve some savings.

Part 2:

The plant I was managing close to Toronto closed, but I was able to find work near home because nobody wants to live out in the boonies, let alone work in a grain elevator.  I fully intended to rent here too, so I signed a lease on a place a month or two after moving back. Places here are pretty expensive considering there’s nothing to do in the town – we don’t have a Walmart, movie theatre, there’s one tiny gym, etc. – so I didn’t expect buying a house would make sense for me.

But…it’s not what you know but who you know, and someone I knew lived in a condo building where one of the owners in the building died. They smoked inside, and never updated the place (it was a bit of a dump…) but because of my connection I was able to meet directly with the executor of the estate and he accepted my offer. “Nice” I thought since renovated units in this building sell for $210,000 – $250,000; whereas I paid $183,000.

My conservative estimates suggest I’m going to do maybe $20,000 of renovations and end up with a place worth $220,000. If a deal like this wasn’t available, I’d still be renting, for sure. Right now, the condo is set to close very soon (mid-April). I honestly didn’t think I’d ever be a homeowner given the prices I saw, but I got extremely lucky. I’m of the opinion that most people do not make their housing decisions considering all the numbers, which is fair since it is an emotional/sentimental decision. But by the numbers, a lot of the time renting would be better but people don’t want to consider that…

Mark – Why?

They fear not having control of the place, like my experience with the landlord selling the house I was renting in, and almost every piece of advice we (millennials) get says renting is inferior and all you’re doing is paying someone else’s mortgage.

If I had a dollar for every time I heard that I would probably own several houses…

Every day the news tells us housing prices are going up, every day someone older than you says you should buy a house, every successful person you know seems to own a big house, your parents likely own their house; and examples of people who succeeded while renting are tough to see (unless you look deeper). When that’s all you see, why even consider renting?

But not only that, nobody teaches you the math/variables to make a rent vs. a buy decision so even if you want to be objective you don’t have the knowledge to do so.

Finally, based on your experiences, what should millennials consider before they make the leap into “home moanership”? 

For one, find a good rent vs. buy calculator – I know you have some here Mark, on your Helpful Sites page, so that’s great.

Think long and hard about whether you want to be in that area long term, whether you’ll like the responsibilities of owning a home.

Really try and tune out what people are telling you.  Do your own homework and think critically.  It’s your life and money.

In general, I think more financial sacrifice is needed from everyone (almost).  If 10+% of your paycheque isn’t being set aside for whatever your goal might be – a house, retirement, FIRE, etc. – you need to take a hard look your spending or income.

This might mean living with roommates longer than you’d like (as I did); or living at home longer (as many are doing), or eating out less, or not buying a car, or getting into board games instead of nights out at the bar.  A few sacrifices can go a long way.


Our reader Tyler seems to have his act together.  Based on other things he told me in various emails, he is also a passionate, maturing investor who lives frugally to help meet his savings goals (and housing obligations).  He told me he is “very frugal…currently driving a $600 car” which he plans to drive for years to come.

When it comes to other 20-somethings, I wonder if most are willing to make similar financial sacrifices or lifestyle changes to make home ownership a reality.  Or, based on housing affordability for 20- and 30-somethings should they even bother?  Why do so many young adults feel renting is throwing money away?

There are cases to be made to ditch home ownership and become a millionaire instead.

What’s your take on millennials and housing – and their quest for home ownership?  A learned desire from Boomer parents?

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

29 Responses to "Millennial housing struggles – it ain’t all avocado toast"

  1. Thank you Christina for the kind words.

    That’s an interesting read. It supports my theory that there would have been all the same coverage, and perhaps more so, of Gen Xers struggling if we had all this social media in the 80’s.

  2. Nice story Mark and Tyler. I really like reading these stories where young people have learned, figured priorities out well, made some sacrifices and good choices and created opportunities for themselves. Great to see.

    I’m not a person who buys into the generalizations and criticisms of people because they were born in a certain period. I’ve seen examples of good, bad, wise, not wise etc. and everything in between no matter what age people are.

    Tyler, you’ve done very well and are sage well beyond your years. What you’ve done for shelter and with investing is a fine example for others. Looks like you’ve got a great attitude and bright future. G/L

  3. Nice timing on this article for me (my family).
    I have three millenial “kids”. We always thought of them as the baby-boom echo, as this age group was called, I think the peak births were in 1991.
    The two oldest are doing PhDs, but my youngest now graduated has been looking for an apartment or suite to rent. Prices are very high here and pretty lousy quality. I think: why pay to live in someone else’s basement when you can live at home??? (just kidding, sorta)
    So if she bought a 2 bedroom condo in the lowest priced part of town, in the lowest priced buildings (ie older) the costs would be the same as renting and would be likely better quality after a bit of sprucing up. I think that is a better option, although the wild card is if she stays in this city. Leaving for grad school or other opportunities makes the decision more difficult, however if you can rent a place out and cover your costs it is not so bad.
    Difficult decision.

    1. Driven “kids” re: PhDs.

      Real estate is tough for kids these days but it wasn’t easy for me 20-some years ago in Toronto either. I had 3 roommates for a few years because I couldn’t afford to live anywhere else. I actually had a sunroom of sorts for a bedroom. Consider that when the cold Toronto winter came – barely any insulation!!

      The reality was though, looking back, I learned so much about saving, investing and ensuring that was not my lifestyle for the rest of my life. I’m not sure some millennials are willing to make such sacrifices. I could be wrong of course.

      Thanks for sharing.

      1. Hi Mark,
        “Driven” would never be an adjective used to describe my boys, lol. However, my oldest displayed an acute love of learning things from a very early age. He was never so happy as when he was reading, watching and learning, and retained every fact. I remember carrying him in my arms into Ottawa airport at the age of 19 months and he got so excited when he saw the Air Canada sign, because he recognized the letter A.
        A mom just wants her kids to be happy, not in jail and with a roof over their heads.

        1. LOL … no doubt: “A mom just wants her kids to be happy, not in jail and with a roof over their heads.” I’m sure my mom would say the same thing!

    2. It’s a tough situation Barbara. If your daughter is looking for places in the area but is up in the air about buying/renting and the numbers aren’t obvious either way, she probably would be best to stay at home. When I moved back to my hometown, I was lucky to live at home for a couple months (I had to move in a hurry for the job), but I expected to be renting for a while and signed a lease on a place I wasn’t excited about. That would have been fine, but it was the same day I signed the lease that I found out about the condo. If I had been willing to slow down a bit, I could have saved myself 4 months of rent. But I was in too big of a hurry to get out of my parents, and it cost me.

      As for the buy/rent decision, I can’t offer any better advice than what you spelled out here. If she can buy a place that needs a bit of work and sprucing up, and it will go up in value (focus on return on investment with the sprucing up!) because of it, she probably is best off buying.

      The caveat though is she should really think about whether she wants to stay local long term. If there’s a chance she is going to move in 2-3 years, staying at home for a bit before finding a deal on a rental could be best. Transaction costs are so much of the buying and selling price, you have to stay in a place for a while before they’ve amortized enough to make sense. And renting out the condo if she were to move might not be such a great idea. Wouldn’t she likely be wanting to use that equity to buy wherever she moved to? Plus the cap rates on most condo rentals are pretty low right now. I know I have considered whether I would sell or rent out my condo should I ever move, and I can’t get the numbers to work to make it a good investment property. The numbers usually suggest I’d be better to sell it and invest the proceeds in stocks.

      It all depends on the numbers though, so I guess just make sure you’re running the numbers with your eyes open so you’re making the decision with all of the info you need.

      1. Thank you Tyler, for your thoughtful comments.
        I agree that it is better for my daughter financially to stay at home. Her boyfriend is over a lot and I like him and treat him like a son and he likes my cooking! Now that her brothers are not here, she has the choice of either of their two rooms,with an exclusive bathroom, and uses her old bedroom as a dressing and storage room. It is much nicer than any basement suite, which makes up a large part of rentals here.
        But I realize that young people want to get out on their own. She recently had a birthday and said that she didn’t feel like an adult because she was stilll living at home. Although that seems to be the dominant Canadian view, I disagree with it, and it isn’t the norm in so many other cultures. I visit Mexico a lot and love the close knit family structure they have there.
        I owned a rental condo townhouse (strata in BC) here for 11 years, selling it in September 2017. I was happy to be rid of it! Mostly good tenants, but 10- 20 percent bad ones and you can be turned off forever. Fortunately after waiting 1 year and having 2 government hearings, I received the money the last tenants owed me. Those were the stereotypical millenials (who felt entitled to not pay their rent!), but I have never come across any others like that. So yeah, renting out your place can be fraught with headaches. And for the first time in a while I don’t have to do the rental income and expenses on my taxes.

        1. The “not feeling like an adult” is something I’ve experienced even in just the couple of months total I’ve lived at home since graduating university, and I know the feeling is common among my peers.

          There are so many experiences you miss out on living at home – forget about the dating one that is common because you’re okay with it – when you are living on your own (or with roommates) you have to do everything because YOU want to, which is different from living at home. You have to mow the lawn so you don’t look like a slob, you have to maintain your garden, you have to keep a clean house, you have to pay your rent by the 1st, you have to fold your laundry, you have to keep your fridge and cupboards stocked, you have to make sure you have toilet paper, you have to make sure you have a toilet scrubber, etc.

          If you’re at home, you do all of those things, but it’s because either mom and dad told you to or because they expect you to, and that’s a completely different dynamic. There is so much value in living on your own, just to prove you can. It’s up to her (with your input of course) whether those experiential positives outweigh the financial negatives.

  4. I actually think someone who rented and invested rather then saving to own would have done quite well in the current bull market. Just a comment that some problems aren’t unique to millenials. As a gen xer i made crap and had a roommate for 5 years after graduation from university. Thats the reality of being single, unfortunately. This story shows that millenials can thrive in the current environment if they are savvy.

    1. Hey Christina, couldn’t agree more. I’m very well off for my age group, and it’s on account of four things:

      1) I worked hard every summer since I was 15 and saved the vast majority of that money. It allowed me to graduate mostly debt free from university.
      2) I found a good paying job after school. It took going into a different field and moving somewhere I wouldn’t have otherwise considered, but I know this was a combination of luck and my decisions.
      3) Once I found that job, I rented a basement apartment I could easily afford, and after that I lived with roommates to make my housing pretty cheap.
      4) I was investing in stocks all the while I was renting and got a bit lucky by actually borrowing to invest for the past 6 or 7 years.

      It’s the second two you mentioned, and they were the biggest contributors. Many people will tell you “oh houses have been going up 8% a year, you have to get in now” without acknowledging what the stock market has been doing. To be fair the average person doesn’t know what stocks have returned. Probably 60+% of my net worth is due to stock gains/dividends, if I had instead chose to save up for a house after graduating, I’d be half as wealthy. At this point I could never save another penny and my current savings would compound to a very comfortable retirement, and is the direct result of foregoing the purchase of a house until I could afford it easily, and finding something in my price range.

      You’re exactly right that this isn’t a problem exclusive to millenials. I think it may be exacerbated a bit now (due to house prices rising faster than wages for a while now), but I attribute the big focus on millenial struggles to the proliferation of “news”. Whether it is tv, youtube, social media, newspapers, buzzfeed, etc, there is so much airtime that needs to be filled with news/content, finding stories of young people struggling to buy houses is low hanging fruit. If all that had been around in the 80’s, we’d have the history to see young people have always had to make decisions like you and I did. As it is, that is just in memories so it’s not broadcast everyday.

  5. It was a very hard decision for us when our old house was not big enough for the big family any more. We seriously considered renting but eventually decided to buy and luckily for us, we can afford it. It’s really a life style decision, as we want stability with young kids. We want the kids to be able to call a house their home.

    However, I would like to add some observation to the decision of buy vs rent: while renting might look a better financial decision short term wise, long term it might be different, depending on where the real estate market is going. Nobody expected the house price will continue to be up to its current insane level. Of course, nobody can predict future. To be prudent, although I choose to buy, I will ensure that I will not be house rich cash poor. I will buy only this much housing that I can afford.

    If one knows that he will live in the same area for a very long term, I think it’s safer to buy something. You have more certainty with your cost on housing than when you are renting. Nowadays so many renters could not afford to rent a similar place once they lost their original rental. Sometimes this is the reason why a senior is forced to take some job again in retirement years.

    1. I think it really depends on one’s goals/objectives. It sounds like you’ve made a great case for a larger home, and wanted it. That was a choice. Same with me, moving back to the city. It was also a choice.

      My wife and I could have been semi-retired as of a couple of years ago, if:
      1) we wanted to rent and not own
      2) we cut our spending
      3) we didn’t travel as much (i.e., to Barbados this winter).

      Again, all about choices. This is why personal finance and investing is always far more behaviour than math.

      I don’t think many folks (that don’t read blogs, PF articles, other) really understand that.


      1. When we first came to Canada, we lived in basement suite for quite a few years. I think the question is really not buy or rent, or how much to buy. The question is really how much one can afford on housing, or anything else. As long as one lives within means, save and invest, like Tyler does, I think it would turn out OK.

        Also as immigrates, we were really just like nomads who are chasing grass and water. Tyler did the similar thing, went to where he can have good jobs.

  6. Thanks Tawcan. The biggest lesson I’d want to tell millenials (a word I’ve never used so much until this conversation with Mark) is think through your decisions and do what makes sense for you. Maybe renting works out better, or maybe owning would be cheaper, or maybe some of the benefits of home ownership (renovate the way you like, paint your walls, you like DIY, etc) truly are valuable to you. As long as you are making your housing decisions for the right reasons and not just because everyone told you renting was throwing money out the window.

  7. Tyler seems to have things in order. I definitely see the appeal with owning a house but we millennials aren’t afraid of going with the unconventional approach. In the end, it comes down to going down a path that you’re comfortable with and makes sense with your finances.

  8. One thing I do know is that there is no way I’d want to be a Millennial or younger with all they are facing in the future. Sadly, it takes a bit of stress off knowing that I will not live long enough to see the looming disaster(s) come to fruition. Wealth can’t fix everything.

    1. The looming disasters, especially on the environment, could be catastrophic I suspect Lloyd. Hard to predict the future of course but at the same time things don’t look rosy for the next couple of generations.

  9. Taken straight from your Weekend Reading links: “Those born in the 1960s have an 11% shortfall while the 1970s group is 18% behind where they “should” be. But by far the group that is furthest behind is those born in the 1980s. Millennials are 34% below their predicted wealth levels based on the experience of earlier generations at the same age.” (Ben Carlson).

    The Boomers were the last generation to actually accrue wealth and be statistically ‘on target’. We’ve all suffered symptoms of their weird sways in psychology and ideology over the decades and will continue to do so until they no longer have majority control. Home ownership enjoying positive praise whilst renting enduring a negative stigma is one of the bigger ones they’ve dreamed up…with all the repercussions we see today. Glad some people are breaking free.

    1. I think it’s great to see some millennials shuck home ownership. It’s not everything and everything and to be honest, the more they ignore that “dream” the better off financially they will probably be.

      Ben Carlson is one smart dude. Really enjoy his site.

  10. Great article. Shelter is a necessity. Owning a home is only one avenue to securing shelter. There are other avenues. Purchasing a home is more a lifestyle than an investment decision and should be made with prudence, as this young person did.

    1. Agreed Herman, and thanks. In all my talking with peers, I have never heard one of them consider rent as “”paying for having a roof over their head”. They consider it paying someone else’s mortgage, and just some tax they have to pay until they can pay their own mortgage (as if it’s some great honour). I know there are prudent millenials out there, but they are few and far between. Which to be fair, I’ve never heard many people from prior generations think of renting objectively.

      I’m “lucky” in that I’ve always been pretty rational/pragmatic about finances. My default is to not buy something and the utility of the thing has to sway me otherwise. It was the same with this condo. My gut instinct was to not spend almost $200,000 on a condo in a small town. It was only after considering resale values, replacement costs, my rent expenses, commute times, etc, that I could get comfortable making the decision.


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