Millions of America’s young people are really struggling financially. Around 30 percent are living with their parents, and many others are coping with stagnant wages, underemployment, and sky-high rent.

And then there are those who are doing just great—owning a house, buying a car, and consistently putting money away for retirement.

These, however, are not your run-of-the-mill Millennials. Nope. These Millennials have something very special: rich parents.

These Millennials have help paying their tuition, meaning they graduate in much better financial shape than their peers who have to self-finance college through a mix of jobs, scholarships, and loans. And then, for the very luckiest, they’ll also get some help with a down payment, making homeownership possible, while it remains mostly unattainable for the vast majority of young adults.

To start with, most of those who continue their education after high school have families that are able to help financially. A recent report from the real-estate research company Zillow looked at Federal Reserve Board data on young adults aged 23-34 and found that of the 46 percent of Millennials who pursued post-secondary education (that’s everything from associates degrees to doctorates), about 61 percent received some financial help with their educational expenses from their parents.

And yet, even with this help, the average student at a four-year college graduates with about $26,000 in student-loan debt. Millennials who are lucky enough to have some, or all, of a college tuition’s burden reduced by their parents have a leg up on peers who are saddled with student debt, and they’ll be able to more quickly move out on their own, and maybe even buy their own house.

And that matters a lot in the long run: While many remain skeptical about the real-estate market, homeownership is still the primary way that Americans build wealth. But first-time buyers—a group generally made up of younger adults—have been scarce since the recession. And research indicates it’s not because many of them want to remain renters, but because they just simply can’t save up enough for a down payment, especially not the down payments needed in the expensive urban markets where so many Millennials prefer to live. According to Svenja Gudell, the senior director of economic research at Zillow, “There’s a ton of people out there who want to buy. In our most recent survey in the beginning of the year, we had 5.3 million renters interested in buying over the next year.”

But, because of their student-debt loads, they cannot. “When it comes to taking out a mortgage, they aren’t able to carry that mortgage payment because they have very chunky payments to make to the lenders of their student loans. So that’s certainly holding Millennials back along the way,” Gudell says.

A recent study by the real-estate company Trulia laid it out this way: Imagine an individual who earns $50,000 and is shopping for a $200,000 home (the median U.S. income and house price). This person would like to put 20 percent down. If he or she follows the popular financial advice to save 10 percent of his or her annual pay, it’ll take him or her about eight years to have that down payment ready to go. If that same person has $26,000, of student debt, which means monthly payments of $280 based on a 10-year repayment plan, it’ll take this person closer to nine years.

But even these numbers are optimistic, with many Millennials owing monthly payments much more than $280 per month, and making much less than $50,000 a year. And in many markets, good luck finding a $200,000 house. In some of the priciest areas, such as San Francisco, it would take those with a college degree and student loans nearly 30 years to save up enough for a 20 percent down payment. For those without the wage boost that a degree brings, it probably won’t be possible at all.

According to Zillow, 43 percent of Millennials who got help from their parents in paying for school were also able to become homeowners. According to Census data the homeownership rate for all young adults was about 36 percent in 2014.

Then there is the group that the Zillow study dubs “double lucky.” These are the select few whose families had enough money to not only help them with college, but to then also assist them with a down payment on a home. This group accounts for more than half of the Millennial homeowners in the Zillow’s data, though they account for only 3 percent of the total Millennial population. Only about 9 percent of Millennials whose parents were able to contribute to their post-high school education were also able to help them purchase a home—and the group that had such significant help is an incredibly low percentage of the total Millennial population.

The study calls this a “funnel of privilege”: Young adults with rich parents soon become rich themselves.

“Haves are turning their riches or their wealth into bigger wealth because they are investing in the housing market by simply living in a house,” says Gudell. This advantage is one that these Millennials will carry forward as they earn more than their degree-less peers, and save more than those who were forced to throw away tens of thousands of dollars on rent due to their inability to buy. In the future, they’ll have wealth to pass down to their own kids, continuing the cycle.

by Mark Mueller

Take that, Jersey-bashers!

Often ridiculed on the national stage as a place teeming with toxic waste, political corruption and gauche reality TV stars, New Jersey has landed at the top in a recent ranking of the best states to raise a family.

Niche, a Pittsburgh-based company that mines and analyzes all manner of government data to produce “best of” lists, found the Garden State had just the right alchemy of factors to push it to number one.

The report card included “A” ratings on education, typically one of New Jersey’s strongest draws, and on access to libraries. Three more categories — crime and safety, access to daycare and community involvement and investment — received “A-” scores.

In the company’s weighting, safe communities and good schools accounted for 40 percent of the overall score. Daycare and access to grocery stores were worth 5 percent each.

The state fared poorly on housing, a category that incorporates home values, property taxes, housing costs, and the age of new home buyers. Niche rated New Jersey a “C” on that front. But because it accounted for just 10 percent of the overall score, housing was not enough to dislodge the state from the top spot.

Cost of living, typically one of the biggest complaints about New Jersey, was not considered in the ratings.

The Northeast in general made a strong showing in the assessment, with Connecticut ranking fifth, Massachusetts sixth, New Hampshire 10th, Vermont 12th, New York 16th, Pennsylvania 19th and Maine 20th.

Virginia, which scored poorly only on access to grocery stores, finished just below New Jersey, followed by Minnesota and Utah.

Hawaii — land of luaus and white sandy beaches — was not considered because of insufficient data, Niche reported.

The worst state to raise a family?

Louisiana, according to the company, which gave the Pelican State grades of “D+” for crime and safety, “C” for education and “C-” for community involvement and investment.

New Mexico, Tennessee, Mississippi and Nevada rounded out the bottom five.


How Millennials Living With Parents Are Affecting the Housing Market – Yahoo Homes

It’s getting better for millennials financially, but the housing market is getting impatient.

A Ned Davis Research report from a few months back indicated that joblessness, stagnant income and student loan debt had not only set millennials back, but kept enough of them away from buying homes to account for 3 million homes’ worth of property demand. That’s 1 million more homes than the 2 million existing homes, or 4.6-month supply, that the National Association of Realtors says are in the national inventory.

According to the Census Bureau, 30.3% of millennials ages 18 to 34 still live at home with their parents. That’s more than 22 million out of 76 million millennials, including nearly 12 million between the ages of 25 and 34. Eric Mintz, portfolio co-manager at Eagle Asset Management, notes that millennials living at home are a huge headwind for the overall economy.

“The marriage rate has been down, but it has a lot to do with the financial well-being of the millennial generation,” he says. “But it does appear to be on the mend and, as we work our way through the recovery, household formation should start to climb higher.”

Millennials have a whole lot of other obstacles to clear before reaching that point, however. The effective unemployment rate for millennials, including those who’ve dropped out of the workforce, was 13.9% in March. Even those who are employed are having a hard time saving. They’re coming out of college with average student loan debt of more than $33,000 apiece, with more graduates having $40,000 or more in student loan debt than at any other time in U.S. history.

They’d like to own homes — and 43.4% of college-educated millennials do want to, according to the Lending Tree — but 67.4% say they need a higher salary, 28.7% want to pay off student loans first and 25.7% say homeownership would be a possibility after they spent time and money on other things, such as traveling, investing and philanthropic missions. Besides, 44.8% have less than $5,000 in savings.

“As the economy is rebounding, this market segment is still feeling longer-term effects of the recession,” says LendingTree founder and CEO Doug Lebda. “Underemployment and low salaries combined with high student debt and uncertainty about the future are a reality that is affecting the housing market. The demand is there, but until this age group sees higher salaries, lower debt levels and feelings of settlement, millennial participation in the housing market will be slow.”

Meanwhile, millennials’ parents have been their most trusted financial advisors and biggest supporters. According to a survey by the Principal, millennials’ parents still chip in for their cellphone bills (12%), car insurance (8%), health insurance (7%) and rent (7%). Their investment is starting to pay off.

Joe O’Boyle, a financial advisor and retirement coach with Voya Financial Advisors in Beverly Hills, Calif., notes that millennials living at home aren’t always doing so because they’re jobless. In many cases, it’s the most fiscally responsible way they can pay down debt — if their parents go along with it. O’Boyle shared the story of a financially savvy millennial client who is a doctor in Los Angeles and made the conscious decision to live at home with her parents after finishing medical school.

“She used the estimated $4,000 a month that would have been going towards rent and utilities and the cost of living on her own towards paying down her student loans, building up her emergency reserves and savings towards a wedding fund,” he says. “She has a great relationship with her parents, and lived at home for two years — $96,000 in savings — to put herself in a better financial position to start a life with her soon-to-be husband.”

One of O’Boyle’s other clients, a sales director with a six-figure salary, opted to live at home to pay off student loan and credit card debt and build a $36,000 travel fund to give himself $3,000 a month for a year abroad.

“He said he had no concerns about finding a job upon his return,” O’Boyle says. “He would live with his parents for a few months when he returned from his trip. This way he could find a new job and build up his savings so he could live comfortably on his own. He said, ‘The time for this adventure is now,’ and he made it happen.”

Overall, millennials have seen their fortunes improve during the economic recovery. According to the Principal, 32% of employed millennials have more job security than a year ago and just 4% have less job security. Another 30% of millennials say their savings are in better shape now than a year ago, while just 15% are less comfortable. Finally, 33% of millennials report their overall financial situation is better than 12 months ago compared with 16% who say it has deteriorated.

Eventually, even among millennials who live with their parents, that typically means a step into the housing market. O’Boyle notes that many millennials with good jobs who can afford to live on their own make the choice, with their parents, to live at home so they can save money toward buying their first home. In the costly Los Angeles housing market, one of his millennial client who is an attorney with student loans or credit card debt decided to live at home so she could save toward the down payment on a home. She lived at home for three years after she finished law school and saved up more than $200,000 to make a 20% down payment on a home in a nice neighborhood near her office.

“She said that there were some small sacrifices to her social life that came with living with her folks, but that it allowed her to buy her first home and it was definitely worth it,” O’Boyle says. “The trade-off for many millennials living at home is giving up some of their independence today for greater financial freedom tomorrow.”

  • Here’s the deal: says median home prices are up to $225,000, with the hottest markets right now in Dallas/Fort Worth, Texas; Santa Rosa and Vallejo-Fairfield, Calif.; and Denver. One measure of a hot market

    “Sellers in the hotter markets are seeing listings move between 29 and 49 days more quickly than in the rest of the country, and at an accelerating pace from just last month — an average of five days faster,” says Jonathan Smoke, chief economist at “These markets are especially attractive to buyers … listings are viewed two to three times more often than the national average.”

    If you’re looking to jump into the market, be prepared, and don’t focus on cutting the perfect deal as much as on a realistic deal that gets you a home you love.

    “Buying at a lower price might be the wrong thought process in this market,” says Edward Kaminsky, president of Kaminsky Real Estate Group in Manhattan Beach, Calif. “Information moves so rapidly through Internet sites that the chances of getting a bargain have long gone away. The bigger concern is where will prices be and where will interest rates be in six months, one year or two years.”

    Kaminsky offers a blueprint for buyers before they start looking for a new house:

    • Know your budget.

    • Shop within your budget.

    • Adjust your expectations if the market has passed you.

    • Make educated offers, and find out as much as you can before writing the offer. See if there are offers on the home you want, and if they are over the asking price.

    • Consider increasing your down payment to get your loan.

    Another big part of the preparation process is getting pre-approved, says Casey Fleming, a mortgage advisor at San Jose, Calif.-based C2 Financial and author of the blog “To get the best deal in a competitive market, make sure you get pre-approved,” he says.

    But what many real estate agents won’t say is that your pre-approval must be credible, Fleming says. “Buyers should remember the highest bid is not necessarily the best bid,” he says. “The bid most likely to close is the best bid. If the mortgage advisor is experienced and knowledgeable, and works for a lender that is credible, the buyer has a good chance of having their offer accepted even if the offer is lower than others.”

    One good reason to buy now, even if prices are up and the inventory situation is sketchy, is that interest rates remain reasonable (at 3.79% for a 30-year fixed mortgage loan, according to “Buyers should be taking advantage of the low rates and locking in a fixed low rate for 30 years,” says Craig McCullough, a Washington, D.C., realtor. “Even if prices were going to stay the same, rates are predicted to increase over the next year or so.”

    “Half a point of interest in not an unlikely rise, and depending on sales price, it can mean several hundreds of dollars a month to a buyer,” he adds. “Add in the likely rise in sales prices, and tardy buyers could face a double-whammy on both sales price and interest rate.”

Address Listing Price Sold Price Days
Bernards Twp. 61  Baldwin Ct $164,277 $164,277 14
344  Potomac Dr $199,800 $193,500 40
120  Countryside Dr $203,000 $203,000 62
121  Smithfield Ct $219,000 $204,000 105
411  Penns Way $223,000 $205,000 65
34  Alexandria Way $239,900 $235,000 31
235  English Pl $243,000 $243,000 1
147  Woodward Ln $259,000 $259,000 30
230  English Pl $268,000 $268,000 27
150  Alexandria Way $294,900 $287,000 29
45  Smithfield Ct $298,000 $288,000 184
14  Woodward Ln $327,900 $316,000 134
149  Village Dr $369,900 $365,000 11
23  Cannon Ct $400,000 $408,000 6
71  Woodstone Rd $499,000 $495,000 16
30  Fairbanks Ln $514,900 $514,900 49
70  Lurline Dr $600,000 $595,000 14
38  Oak Ridge Rd $629,000 $630,000 32
41  Lake Rd $779,000 $745,000 213
19  Darren Dr $799,000 $865,000 23
10  Honeyman Rd $811,000 $836,000 76
40  Canter Dr $825,000 $826,000 7
Address Listing Price Sold Price Days
Bedminster Twp. 14  Ray Ct $259,000 $252,500 189
36  Fieldstone Rd $279,000 $279,000 15
63  Wescott Rd $289,999 $280,000 163
69  Academy Ct $305,000 $297,500 27
31  Pheasant Brook Ct $325,000 $315,000 38
49  Four Oaks Rd $425,000 $420,000 14
29  Stone Run Rd $447,000 $437,000 37
118  Westview Ln $499,999 $490,000 135
Address Listing Price Sold Price Days
Bernardsville Boro 1  South St $279,000 $240,000 86
12  SUNNYBROOK RD $389,000 $401,000 8
37  Old Fort Rd $615,000 $595,000 17
90  Roundtop Rd $879,000 $866,000 44
331  Claremont Rd $1,095,000 $899,175 118
151  Peachcroft Dr $1,195,000 $1,065,000 133
46  Mendham Rd $1,249,000 $1,265,000 173
116-1  DRYDEN RD $1,495,000 $1,350,000 36
Address Listing Price Sold Price Days
Bridgewater Twp. 622  Stratford Pl $75,000 $75,000 287
3  Columbia Dr Unit 4A $135,000 $125,000 41
466  Union Ave $152,900 $152,900 8
47  Morgan Ln, 1B $157,000 $151,000 351
316  Stratford Pl $195,316 $194,000 53
3007  Vroom Dr $215,000 $225,000 18
309  Strull Ct $225,000 $220,000 275
723  Kline Pl $239,900 $240,000 190
3105  Vroom Dr $249,900 $232,000 7
115  Chelsea Way $259,000 $245,000 21
716  Kline Pl $259,999 $257,000 201
128  Oak St $264,900 $245,000 119
546  N Bridge St $274,546 $265,000 87
3708  Vroom Dr $289,000 $277,500 20
1049  Hoffman Rd $295,000 $260,000 179
194  Crestview Rd $299,500 $295,000 123
461  Victoria Dr $309,900 $304,000 13
62  Stryker Ct $337,500 $325,000 8
4804  Patterson St $375,000 $365,000 41
207  Riverview Rd $379,000 $380,000 175
671  Foothill Rd $379,000 $400,000 6
317  Adamsville Rd $435,000 $424,500 49
1303  Pinhorn Dr $439,900 $429,500 15
810  Garfield Ave $449,000 $441,000 55
8  Glen Rd $449,900 $412,000 5
3001  Johnson Cir $459,000 $450,000 14
243  Dutch Farm Rd $469,000 $449,500 81
32  Stella Drive $479,900 $475,000 29
16  Northern Dr $489,000 $440,000 3
795  Star View Way $489,750 $492,500 30
695  Talamini Rd $499,000 $490,000 153
22  Stapleton Ct $535,900 $533,000 11
3  Wimple Way $589,000 $590,000 9
818  Dow Rd $599,000 $525,000 78
114  Oak St $599,900 $582,500 171
5  Fairway Ct $649,900 $610,000 143
820  Partridge Dr $650,000 $580,000 145
29  Kiser Ln $695,000 $683,500 83
3  Harrison Court $788,800 $748,000 92
4  Drysdale Ln $789,000 $780,000 314
679  Thompson Ave $800,000 $575,000 85
54  Stone Gate $915,000 $850,000 204
Address Listing Price Sold Price Days
Far Hills Boro 71  Peapack Rd $399,900 $385,000 114
Address Listing Price Sold Price Days
Peapack Gladstone 4  Brook Hollow Rd $634,900 $605,000 165
7  ORATAM DR $899,900 $860,000 156
Address Listing Price Sold Price Days
Warren Twp. 6  Saddlemount Ave $259,000 $243,000 197
41  Roseland Ave $349,000 $337,500 54
40  Gates Ave $450,000 $438,000 99
5  Upper Warren Way $589,000 $600,000 17
106  King George Rd $699,900 $675,000 91
74  Dock Watch Hollow Rd $1,099,000 $998,000 67
33  QUAIL RUN $1,199,000 $1,126,000 106
9  Quail Run $1,275,000 $1,225,000 48