Young people hoping to become homeowners soon should “stop buying Starbucks coffee,” according to Pamela Liebman, president and CEO of international luxury real estate company The Corcoran Group.
The 63-year-old, who joined Corcoran as an agent when she was 23, offered her advice to millennials and Generation Zers in a recent interview with Fortune.
"Stop spending money on things you don't need. It's amazing how quickly that little nest egg can add up," she said, according to the Telegraph.
Her comments tap into the same clichés that have been used to mock millennials over the past decade, as the generation has struggled to reach key life milestones amid a series of financial recessions in their formative years.
Generation Zers, who began reaching homebuying age in the midst of the COVID-19 pandemic, are now facing the same treatment.
"If you look at people who take Uber instead of the subway, they buy coffee, they buy breakfast out, they spend money on things that are not necessary, they go out with their friends three nights a week, they spend money on alcohol and food," Liebman said.
"These things definitely start to add up. The subway is definitely cheaper than an Uber," she added.
Compared to previous generations at the same age, millennials and Generation Z have had difficulty purchasing homes due to ongoing affordability challenges, which largely stem from very high prices to high borrowing costs.
Fewer Americans under the age of 35 own a home today than baby boomers at the same age.
Additionally, the average age of first-time buyers, at 38, is older than it has been since at least the 1980s, according to the National Association of Realtors (NAR).
The typical age of the buyer in the US is also at a record high, reaching 61 this year - up from 58 in 2024.
And overall, fewer Americans are getting on the real estate ladder. By 2024, according to the NAR, there will be just over 1.1 million first-time homebuyers in the country.
Younger generations grew up in difficult times. The subprime mortgage crisis and the Great Recession that followed hit millennials in their formative years; many Generation Zers entered the workforce at the height of the pandemic.
In addition to these challenges, homebuying has become increasingly unaffordable for Americans of all ages. Home prices rose sharply during the pandemic when historically low mortgage rates sparked a homebuying frenzy that clashed with a chronic shortage of inventory across the country.
Despite a recent surge in inventory, home prices across much of the country remain well above their pre-pandemic levels. Even in some areas of the Sunshine Belt, which have seen a sharper correction in recent years, prices are nearly double what they were in 2019.
Borrowing costs are now more than twice as high as pre-pandemic lows, despite recent improvements in affordability.
Mortgage rates rose sharply in 2022 after the Federal Reserve's aggressive rate-hiking campaign to combat rising inflation, and for the past three years they have remained between 6 and 7 percent.
What's more, other housing costs have risen massively in the past five years: Property tax bills, which are tied to home values, rose in nearly every major U.S. metropolitan area since 2019, according to a 2024 Redfin report.
Homeowners' insurance premiums, driven by climate change and higher home values, have increased by 70 percent since 2021, according to a recent study by data analytics company J.D. Power.
Millennials and Gen Zers are often blamed for their financial shortcomings, with particular scrutiny of leisure spending that often includes avocado toast, pumpkin spice lattes, Labubus, Jellycats and whatever else the latest TikTok craze compels users to buy. /Telegraph/
