There's a reason most millennials can't afford to buy a house. And it's not avocado toast.

There's no doubt that millennials are one of the most talked about generations.

But millennials are also one of the most misunderstood. They are often mischaracterized as "lazy, entitled, and narcissistic." They are accused of killing a whole ton of industries ranging from diamonds to beer. The list goes on and on.

But one of the most bothersome misconceptions about millennials is about the alleged reasons they can't afford to buy homes.


For instance, on July 26, the "Today Show" featured a study asserting that millennials can't afford to buy homes because they're spending too much on bachelor parties. The study, sponsored by real estate site Zillow, reported that attending "nine destinations bachelorette parties in your life time" could rack up a hefty sum of approximately $13,788.

Photo via iStock.

"In other words, you could spend up to 35% of a down payment on a median-price home (in certain areas of the country) celebrating a friend’s nuptials," reported "Today."

But here's the thing: The study doesn't mention how many millennials are jetting off to destination bachelor parties. Not all millennials are attending or can even afford their friends' destination nuptials or pre-nuptial festivities. In fact, a lot of millennials are choosing to stay unmarried.

"Studies" like this come up with a lot of obscure rationales for why millennials can't afford homes, but they're not painting the full picture.

It's not just bachelor parties getting the blame for millennials' financial woes. Some reports and pundits claim millennials spend too much on avocado toasts and coffee rather than saving up for a down payment for a home.

But there's one thing all these studies seem to leave out: Most millennials can't afford to buy homes because of massive college debt.

In the United States, approximately 45 million people have student loan debt. Americans owe more than $1.2 trillion in student loans with the average debt amount being $30,000. Millennials make up most of these borrowers, with 63% claiming to have more than $10,000 in outstanding college debt.

It's no secret that paying back student loans can take up huge chunk of a person's monthly income. In addition to high interest rates and potentially negative effects on credit scores associated with student loans, millennials are earning less and struggling to find jobs compared with previous generations. It's no surprise that saving for a down payment for a house is nearly impossible for many millennials.

The effects are probably more widespread than people think. According to the National Association of Realtors, 80% of millennials blame student loans for not being able to purchase a house. About 52% of millennials also can't qualify for a mortgage due to their debt-to-income ratio, Marketwatch reported.

But skipping college — and the debt it often comes with — doesn't seem to make purchasing a home any easier. Millennials without college degrees have a harder time finding employment than those who do, which in turn means it'll be more difficult for them to save for a down payment or qualify for a mortgage.

Photo via iStock.

But — not all hope is lost for aspiring millennial homebuyers.

It's not impossible for millennials carrying student loan debt to afford a house. There are some steps that can help:

  • Benefits packages for some employees might include student repayment assistance. Some companies are helping their employees by paying off a certain percentage or sum of their workers' college debt.
  • Public Service Loan Forgiveness, a federal program, sounds just like what it's called: The government will provide student loan forgiveness for direct loans if the borrower takes a career in certain government, public service, or nonprofit organizations, and has made 120 monthly payments.
  • To reduce debt-to-income ratio, look into lowering the monthly payments or refinancing student loans with a private lender. Borrowers who have already graduated and maintain a steady income might qualify to refinance that loan for a lower interest rate.

All generations can agree: The student loan crisis needs to be addressed.

The student debt burden has rapidly grown for years, and with the present system unchanged, there are no signs of that stopping. Making matters worse, the current administration has proposed cuts to programs that would help borrowers suffering from steep college debt. Secretary of Education Betsy DeVos has proposed to cut $13 million from a program that provides loan forgiveness for defrauded students.

The best way to tackle the ever-growing student loan bubble is to address it head on. Stand behind candidates that propose student loan forgiveness, urge local representatives to propose free tuition programs, and call your congressional representatives to come up with legislation to regulate and reign in college debt.

We can no longer afford a generation to be ridden with debt. It's time to take action now.

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Brian Olesen never imagined he would end up homeless.

The former U.S. Air Force medic had led a full and active life, complete with a long career in the medical field, a 20-year marriage, and a love of anything aquatic. But after hip surgery and chronic back pain left him disabled in 2013, he lost his ability to work. Due to changes in eligibility requirements, he couldn't qualify for federal veteran housing programs. His back issues were difficult to prove medically, so he didn't qualify for disability. Though he'd worked his whole life, having no income for five years took its toll. He got evicted from a couple of apartments and found himself living on the streets.

But in 2018, two things completely turned Olesen's life around. He was able to both qualify for disability and to move into an affordable housing community in Miami's Goulds neighborhood called Karis Village.

When people think of affordable housing, they don't usually picture a place like Karis Village. The 88-unit development is brand new, and built with an attention to design that is not always expected for developments that serve as home to people on limited incomes. The apartments have tile floors, marble countertops, and all new appliances and furniture, and the grounds are beautiful and well-kept, with a playground and common areas for residents to gather.

Brian Olesen in his kitchen at Karis VillageCapital One

Karis Village isn't just a housing development; it's a home and a community. Half of the units are set aside for veterans who have experienced homelessness, like Olesen. The other half are largely occupied by single-parent families.

"To me, this building was just a gift," says Olesen. "All of the different parties that got together to put this building together… making half the building available to veterans. We've got no place to go."

Addressing veteran homelessness was one of the goals of Karis Village, which was built through a partnership that included Carrfour Supportive Housing — a mission-driven, not-for-profit affordable housing organization in southern Florida — and Capital One's Community Finance team. More than just an affordable place to live, the community has full-time staff on hand to help coordinate services—from addiction recovery programs to transportation options to job search and placement. Also included are peer counselors who provide emotional and psychological support for residents.

Karis Village, an affordable housing community in Miami, Florida.Capital One

Carrfour President and CEO Stephanie Berman says the core function of the services team on site is to build a supportive community.

"Often when you think of folks leaving homelessness and coming into housing, you think of shelters or some kind of traditional housing," she says. "You don't really think about a community, and that's really what we build and what we operate. What we're really striving to create is community. We find that our families thrive when you create a sense of community."

The intention to create a supportive community at Karis Village was a priority from the get go. Fabian Ramirez, a Capital Officer on Capital One's Community Finance team, says the bank did a listening tour in southern Florida to explore community development and affordable housing options in the area and to hear what was most needed. After deciding to partner with Carrfour, the bank provided not only an $8 million construction loan and a $25 million low income housing tax credit (LIHTC) investment to help build Karis Village, but it also kicked in a $250,000 social purpose grant to help fund the social support services that would be put in place for residents.

"It's not just all about providing the brick and mortar," says Ramirez. "It's about being able to contribute to the sustainability of the development and of the lives of the people who move into the building."


Capital One

Olesen says he and his fellow residents benefit greatly from the network of support services offered in the building. He says a counselor comes to meet with him once a month, sometimes right in his apartment. He also gets help maintaining a connection with the Veteran Affairs office. Other services include social workers and counselors for drug addiction and alcoholism.

Olesen loves being around other veterans, and he says hearing the sound of children playing keeps the community lively. He says anywhere else he could afford to live on disability wouldn't be nearly as nice and would likely involve shared kitchens and bathrooms and neighborhoods you wouldn't want to go out in at night.

If it weren't for Karis Village, Olesen says he doesn't know where he would be today: "I had nowhere to go and this is a safe, beautiful place to spend my retirement."

"I don't think they could have done a much better job of putting this place together and supplying us with what we need," he says. "I have so much appreciation for the ability to have a place to live. And then you add to that that it's beautiful and completely furnished and you didn't need to bring anything—I don't know what more you could ask for."

Karis Village and another development for veterans built the same year enabled the neighborhood of Goulds to meet the requirements set forth by the U.S. Department of Housing and Urban Development to declare an end to veteran homelessness in the area.

Ending veteran homelessness altogether is a complex task, but communities like Karis Village show how it can be done—and done well. When government agencies, non-profit organizations, and corporate funding programs come together to solve big problems, big solutions can be built and maintained.

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