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Homeownership has always been out of the question for me.
Shotgun row houses in my former home of Washington, D.C., start at around a half-million. Maybe if I had a cushy ad agency job or a partner to help with the costs, affording such a home wouldn’t be as much of a stretch.
But as a single-income freelancer, it was a “nope, never” situation.
Fast-forward to life in Florida, where I find myself cruising the real estate listings on a near-daily basis.
“Houses are so cheap here,” I fake whisper to friends over happy hour. “I could buy one tomorrow!”
But could I really? Until today, I couldn’t put my finger on why homeownership still seemed so far away.
Enter Zillow’s new real estate listing site for millennials.
Zillow’s new site, RealEstate.com, doesn’t look like a site designed for younger buyers. It’s a pretty typical setup, big on the photos and low on superfluous text.
But while other real estate sites, including Zillow, couch estimates for taxes and homeowners association fees deep within listings, RealEstate.com puts them out front.
Users can search homes by listing price or monthly home budget.
“The idea is to let users make an easy comparison between the cost of owning and renting a home,” Bloomberg’s Patrick Clark noted in a quick overview.
Take, for example, a condo building I’ve been eyeing since I moved to Florida.
The listing price for a three-bed, two-bath condo close to downtown St. Petersburg? $285,000.
It feels like a steal at first glance. But with a paltry 3.5% down payment on that price – about $10,000 — it quickly becomes evident on RealEstate.com that I can’t afford this thing. Not even close.
The site also reveals estimated closing costs of just over $7,000. (Admit it, no length of HGTV marathon has actually clued you in on how high closing costs can actually get.)
Based on that $10,000 down payment and a 30-year mortgage at 3.79%, my estimated monthly principal and interest payment would be just under $1,300.
It doesn’t feel like that much more than I’m paying for rent.
But then RealEstate.com estimates my property taxes ($380 per month), homeowners insurance, ($170 per month), mortgage insurance ($230 per month), homeowners association fee ($325 per month) and utilities ($150 per month).
Suddenly my “all-in monthly price” is more than $2,500 — more than double my all-in total to rent my apartment.
RealEstate.com explains it uses local averages for the most common costs of homeownership to come up with its calculations. So the numbers I nearly burst into tears over are not hard and fast, but they’re still a good estimate of what I’ll face if I ever sneak into my dream building.
#ForeverRenter isn’t just a sarcastic hashtag I use whenever a homeowner friend complains about yet another home repair.
Renters outnumber homeowners in more than half of America’s 100 most-populated cities.
Clark notes that the median age of first-time homebuyers is 33. That, along with the millennial focus on experiences over things and location-independent work, all seem to argue against homebuying.
So for now? I’m enjoying my rental, knowing that any time in the next six to 12 months, I could pick up and go somewhere else without much of a struggle. The closest thing I’m going to get to buying a home is criticizing people on “House Hunters” (loudly, over my bowl of popcorn) for their unrealistic expectations.
I’ll still routinely click on home listings, but this reality check on the actual numbers will remind me to keep dreaming (and saving).
Your Turn: Did you have any idea what closings costs can amount to before you read this post? Me neither!
Lisa Rowan is a writer and producer at Codetic. She still can’t get over housing prices in Florida.