My Experience of being a Gen Z Homeowner

Hey everyone, there’s not been much progress on my projects lately, but that’s for good reason. I’m actually a homeowner now!

It’s the American Dream that everyone says you can’t attain anymore, owning a house. How on earth did I afford to buy a house as a member of Gen Z? I won’t mince words, the simple answer is that I am very lucky to have supportive parents that allowed me to live with them until I turned 23, which allowed me to save up enough money. That, and also living in Arkansas, where property usually averages below 200k. I ended up paying a bit over 150k, with a down payment of a little over 8k. For those living in other parts of the country, you’ll be shocked to hear that my monthly mortgage payment is only 900 dollars! That being said, with insurance, utilities, and other expenses, it comes out to a bit over 1400 dollars a month. All in all, I’m very lucky to be in such a position as young as I am.

My story begins about three years ago. I dropped out of college after some struggles with finances and ended up hopping between jobs, food delivery apps, and even a brief stint where I considered enlisting in the US military. I finally ended up working in a remote position in customer service for a bank. I didn’t particularly enjoy the work, but I was very good at it, and so I quickly got promoted to a position where I was training new employees how to do the job. I was doing quite a significant amount of overtime and ended up netting about 14k in my first 8 months which was spent on paying off my various debts, credit cards, and qol purchases like a new computer. It took about 8 more months before I had 20k in savings, and had gotten another promotion that raised my wages to a 40k per year position. I felt at that point, I was ready to start looking for houses, so I networked with a realtor and mortgage company owner that my mother is friends with.

Once I started looking for a house, I browsed various listings for houses under 150k. Trust me, even in Arkansas, it’s not easy to find anything under 150k that isn’t falling apart, rotting, or next to the motel filled with sex offenders. I visited several with my realtor, and while many of them would have been fine to live in, they all would have needed a lot of work to be comfortable in. I have enough for a mortgage, but I don’t have a ton of loose assets to spend renovating a house that I intend to live in. I finally found a house that was in a good location and looked clean and well maintained on the surface. As you may imagine from someone who operates their own website, works in customer service, and is very “techy”, I’m not particularly knowledgeable at what makes a house good or bad, and was not about to crawl under the house or explore the attic to inspect things myself. Let me tell you, hiring an inspector was the best decision I had made, because I had made a 140k offer on the house, and that house wasn’t worth 95k. The subfloor was completely rotted, the roof was about twelve years old, the sewer line was clay pipes and not steel or PVC, every single plumbing apparatus leaked, and the entire HVAC system was over 30 years old. All in all, there’s over 40k of damages that would need to be repaired, and I wouldn’t be able to live in that house the entire time. I told the owner that he’s out of his mind to list the house for 140k while these glaringly obvious flaws are there, and that was the end of that.

Dejected, I continued to look for new listings, and came across a listing where the owner had reduced the price a significant amount. I went to tour it, and came to find out that the owner’s grandma plays bingo with my grandma. I made sure to bring my dad for the tour, who is a bit more blue collar than I, and we determined the house was in great shape, and the location was a great spot of town near to my parents and grandma. I ended up making an offer for 150k where the seller covers closing costs, which they ended up agreeing to. The next couple weeks were a whirlwind of busyness at work, signing dozens of documents, and dealing with packing my stuff. Finally, closing day came, and I have to go to the title company to get my keys. I finally get to the new house and... there’s no fridge? There was a fridge last time I was here. Turns out refrigerators are something you have to explicitly request in the contract, or else the seller just gets to take it with them. What a bizarre world we live in. Well, my realtor was apologetic and provided a 1300 dollar check for me to purchase a new one, so all’s well that ends well, in that regard.

The next annoyance came when I tried to purchase utilities. I started setting things up about a week and a half before closing, and so I contacted my preferred internet company that my parents use. They stated “There’s an issue with this address. Call us at (xxx)-xxx-xxxx”. Like many of Gen Z, I don’t like making phone calls for something that doesn’t need it, so I used that company’s online chat to see what’s up. Turns out, Internet Company 1 does not service that address. Unfortunate, but what can you do. I then go to set up internet with Internet Company 2, who my grandma uses. I don’t particularly like Internet Company 2, because they are known for throttling their customers and are extremely expensive. Once I closed on the house, I came to find out that there was no coaxial outlet in the entire house, nor was there a coax drop from the power pole. Internet Company 2 told me that this house was Coaxial, so I was a bit confused. I then found a fiber optic PON port from Internet Company 1 in the house. At this point, I checked with Internet Company 1 again, and lo and behold, they DO service this address! I quickly signed up for internet service with them, and began the arduous task of closing my account with Internet Company 2. That call with retention was one of the most excruciating 32 minutes I’ve ever had to deal with in my life, it was like pulling teeth. You’d think the guy would have been shot dead right then and there if he let me close my account, the way he was acting. He kept trying to convince me to keep the account, while simultaneously asking me to pay even more to upgrade to fiber optic with their company. He eventually misspoke, and asked me if I’d consider putting the account on hold instead of closing it. I asked back, “Is there a charge for putting it on hold?” and he stumbles on his words, as he realises that because my account is only 7 days old, I’m not eligible for a hold. He explains this to me, and I burst out laughing. He finally relents and goes to close my account, and follows up with a “by the way, you have a 62 dollar balance on your account.” By this point, I was pretty mad because I never actually got to use any internet, and so I started arguing to try and get him to use some of his one time credits to apply towards my account so I wouldn’t have to pay it. For those unaware, this specific internet company provides retention and sales employees about 300 dollars per day for discounts and credits that they’re allowed to use to deal with unruly customers. I eventually argued him down to only having to pay 30 dollars. I’m still not happy about it, but 30 dollars is not terrible considering they did ship me a router that I had to ship back.

The last thing I want to talk about is my plans with regard to paying off the house early. Common knowledge dictates you should make one or two extra payments per year, but I’m planning on instead putting my money into a payoff fund in a brokerage account that follows the value of the S&P 500. I intend to put 5% of my paycheck into my 401k, 100 dollars a month into my Roth IRA, and 300 dollars a month into this brokerage account. Once the brokerage is at a value that I can pay off the house, I can choose to either continue investing, or pull my money out and pay it off. My line of reasoning is as follows: the S&P 500, on average, outperforms the cost of interest on the mortgage. Additionally, this is liquid funds that I can leverage in an emergency, instead of having to borrow against the equity on my house. This is significant, especially in the case where I could possibly lose my job due to layoffs or medical issues. Having that significant amount of savings allows me to continue making payments so I don’t default on the loan and lose my house, which the same cannot be said for having that equity in the house. One last thing to consider is that I financed with an FHA mortgage, however, for conventional mortgages, you no longer have to pay the costly PMI once you hit 20% equity in the house. For me, this is what makes the most sense as far as putting my money away into savings so I can get out of debt sooner.

It’s been about a week since I moved into my house. I’m still unpacking a lot of my stuff, and I’m still working on getting new furniture and appliances, but it’s starting to really shape up into a lived in space. I’ve had some friends over and it’s starting to feel less weird for me to be there. It’s really starting to feel “mine.” I’m excited to continue to live here for the next decade or so. Anyways, that’s my experience of being a homeowner.