I’m Not an Entitled Millennial Because I Can’t Afford to Buy a House in the City I Live in

I was pretty excited to wake up on Monday morning to see my face on CBC‘s website. A reporter from CBC found my house hunting blog series and asked to interview me for a piece.

I was more than thrilled to do it because I think there should be more stories in the media about millennials like me who are doing everything they can to get a good salary and save up for a down-payment, but still aren’t able to afford to buy in the city of their choice.

I certainly didn’t want to be part of a story that was about becoming house poor in a crazy real estate market, so being featured as a renter forever was just fine by me.

As many of you know if you read any of my house hunting blog posts, my husband and I looked for a place to buy for two months this past winter. We were pre-approved for a mortgage, we found a real estate agent and we were convinced that we’d find something in Toronto within our budget.

Our budget was about $500,000, which is still a pretty crazy number if you ask me. That’s half a million dollars just for a house! And no we weren’t looking for a brand new mega-mansion with granite countertops and a big yard. All we wanted was a bit of land with a two-bedroom bungalow on it. Something that would be a good investment compared to spending money on rent every month.

Alas, we just couldn’t find anything in our budget. And yes we did consider townhouses and condos, but there was just no way I would be willing to pay for a place where a) I don’t actually own the land b) I have to pay $500 – $1000 in monthly maintenance fees, and c) I’m still shelling out $500,000 for a two-bedroom place.

Once my husband and I realized we wouldn’t feel comfortable paying upwards of $600,000 for a house in Toronto, we decided to continue renting and spend more time looking into better ways to invest the cash we did have. It is unfortunate that if we want to continue to live in a major city, we may never own a home.

However, we are fortunate that we can afford to rent in Toronto and not owning a home gives us more flexibility. Without a mortgage and home maintenance costs, we’ve got more money to play around with for travel, which is a big priority in our lives. I’d much rather rent forever and be able to travel, than be stuck owning a home without any money left over to explore this amazing world.

From what I just wrote, do I sound like a entitled millennial? I don’t think so. Unfortunately, a lot of the commenters on the article I was featured in had some very different opinions. I honestly don’t really care what commenters on media sites say because I know (having worked in media myself) that a lot of those people just use the space as a platform to judge others. That being said, I do find it hard to believe that so many people out there read the story and completely missed the point.

The point of the article was to address this very real housing crisis happening in most major Canadian cities. It used to be possible to buy a house in one of those cities, albeit smaller and older than something you would get in the suburbs, without having to spend “67 per cent of household income” to do to so.

It used to be possible to buy a house in the city of your choice, but that’s just not the case anymore. That’s why my husband and I choose to rent instead of putting our life savings towards a house. And keep in mind, we’ve got a combined six-figure salary and were planning on putting at least 20% down on a $500,000 abode.

To me, it’s just not a smart financial decision to buy a house right now, but I also believe that what comes up must come down. Eventually interest rates will rise and many people won’t be able to afford their mortgages anymore. That will most likely force more houses to come onto the market to a smaller buyer pool. Hey, I could be wrong, but it’s happened in the past so why can’t it happen in the future?

Anywho, some of the “solutions” many of these commenters offered were pretty baffling. Some said “Then don’t live in Toronto anymore, move somewhere cheaper.” Sure, that’s a choice I could make. If I just wanted any house and didn’t care where it was, I could absolutely move to another city and buy a house for probably half of what my initial purchasing budget was. But that’s not a choice I want to make.

My husband and I’s jobs are in Toronto. Our friends all live in Toronto. Our lives are in Toronto. We just can’t afford to buy a house in Toronto, so we’re renting instead. And moving to the suburbs isn’t exactly a perfect solution either.

There would be more costs involved with commuting. Right now I only pay $141.50 for a monthly TTC pass, and my husband spends maybe $20 on tokens each month (he bikes to work). My husband does own a car, but he’s taken it off the road to save us more money. If we lived in the suburbs we’d probably need two cars and that would cost us thousands of dollars per year. Money that we’re currently saving and investing.

Another trend amongst the commenters was that I was an entitled millennial who thinks that I have a right to own a house, but in fact owning a home in a big city should be looked at as a privilege. Wow, I’ve never heard that one before. Very creative (*major sarcasm here).

Listen, it may come as a shock, but us millennials are some of the most money conscious and hard working people around. Just look at how many amazing personal finance blogs and podcasts us millennials have started to keep ourselves financially on track or to help us pay down our debt!

I’m not whining about how I can’t have that perfect home shown on HGTV’s House Hunters. I’m sharing my story in the hopes that others will too. Maybe if enough of us share our stories about this insane housing market, we can all make a positive change.

No matter where you live, there should always be an option for affordable housing. If you disagree with that, then you’re an idiot. Right now, the only option that’s affordable for us in Toronto is renting just outside the downtown core. I pay $1300/month in rent with my husband and I’m not complaining one bit.

I love this city, and I’m not going to be forced out of it just because I have dreams of becoming a homeowner one day.

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Showing 34 comments
  • Rob
    Reply

    “being featured as a renter forever”

    No such thing as “forever”, Jess. Your time will come when the timing is right. First we need a nice big economic recession. It’s coming because we are long overdue. Just study financial history. Bust and booms come in cycles – not always predictable as to their timing. Our TO Real Estate bubble, like Vancouver’s, won’t (and can’t) last “forever” and it definitely won’t.

    So rent for now, travel if you so desire, but remember to save a good chunk of change on good safe investments to grow your net worth. It’s the only way.

    Some years back our kids were lucky enough to be able to afford to purchase their houses, one in Mississauga, the other in Burlington. They both work in downtown TO but take the GO train to work. They are close to schools, big box shopping malls, local public transportation, etc where they live. Have you considered looking out that way. It might work out someday when things improve. Hell, you might even find a place with that dishwasher that you’ve been so lusting after! 🙂 Patience, lady, patience.

    • Jessica Moorhouse
      Reply

      I think the only way I’ll ever move back to the suburbs is if me and my husband move back to BC and move back to either Coquitlam or Port Moody. That’s close to where we grew up and our parents both live there, so it would make sense. I don’t think we’ll ever move to a suburb in Ontario because we don’t have any family or friends there, and I’d just rather live in Toronto for however long we live here.

      • Reply

        Even the suburbs of Vancouver can be expensive, think West & North Van. If you moved to Coquitlam or Port Moody, you would definitely need cars, as the skytrain is not there yet, and well, buses can be fairly unpredictable.

        I bought a condo in Surrey, because this is the type of dwelling & where I could afford to buy. Since it is not close to skytrain, my car costs went up. I don’t regret buying though.

  • Casey @Waffling
    Reply

    I actually do own in this city, but just a condo. On one income I could never afford a house. Even in the suburbs it wouldnt be possible. However, I really dont see a solution to the housing issue. There are just too many people in your situation. They would snap up any cheaper homes coming out and continue to drive prices up. Simply put- there are too many people in this city and not enough homes. And more homes probably wont show up because most of the prime real estate has been spoken for.

    And just ignore the commenters on the article. I swear only the most opinionated and assholeish people actually write comments on news sites

    • Jessica Moorhouse
      Reply

      I’m really interested to see what happens in the next 5 to 10 years in real estate, that’s for sure. And ya, I think I stopped reading comments after about number 20. It was just the same stuff over and over. Ugh.

  • Taylor Lee @ Engineer Cents
    Reply

    I’m constantly surprised just how out of tune Canadian city rents are from house values. If you can rent a place for $1300 near downtown, heck yeah, milk that while you can. Home values will inevitably fall once interest rates go up. Though I do feel bad for cities where there’s really not much they can do to keep housing costs low. Construction is slow and expensive and our generation is a lot less willing to commute in from the far-flung suburbs than our predecessors. If you can’t build up and you can’t build out, how does a growing city house its population? And are there no smaller, burgeoning Canadian cities picking up the spillover of millennials priced out of Toronto and Vancouver?

    In any case, I certainly don’t think you sound like an entitled millennial. Reading stories like yours really is important and hopefully will help policymakers rethink the fundamentals on urban housing.

    • Jessica Moorhouse
      Reply

      Here’s hoping some positive change takes effect in the near future! If it’s this difficult for myself and my husband, I honestly do worry about the future of generations to come.

  • Tara
    Reply

    I can’t speak for cities in Canada, but in major US cities like NYC, rents are high and home ownership even higher for these reasons:

    Despite high demand for affordable housing, only luxury condos are built due to major tax breaks (421-a program in NYC: newly-built condos pay significantly reduced property taxes for 21 years!!! if they have “affordable housing” attached) combined with the higher profits for builders on high end vs. lower end condos. With these expensive condos being built, they’re major targets for people from BRIC countries (Brazil, Russia, India, and China) looking for places to hide their money from their home governments (real estate in another country can’t be seized). As a result, average Joe NY’er can’t even dream of buying a place because someone who doesn’t even live there 90% of the time snatched it up for asking or above asking price.

    And as far as renting, there are actually a lot of empty apartments in NYC, but due to US tax law, it’s financially advantageous for mega-landlord corporations to take a tax-loss on the “full value” of the rent on their empty apartments than to rent the empty apartments at a lower, more realistic rent (cuts down overall taxable income).. So by leaving a lot of empty apartments, it forces rents to stay high overall.

    The TL:DR version: in my opinion, sometimes the cards are stacked against you when it comes to the high cost of living in these big-city urban environments and it won’t get any easier (unless the city crashes hard, like when NYC went bankrupt in the 80’s). While I sympathize with having a career in a big city, sometimes it makes more sense to leave and start fresh in a cheaper city. I actually got a raise coupled with a cheaper cost of living when my husband and I moved from NYC to Philly. Since my good friends were leaving NYC too, it seemed the best thing to do for us overall. It sucks starting over but at least now we can buy a house!

    • Jessica Moorhouse
      Reply

      That sounds a lot like the issue going on in Vancouver. There are a ton of empty condos and houses in Vancouver because they are foreign owned but not being rented out.

  • Revanche
    Reply

    We have similar problems here in the Bay Area. The city itself is impossibly expensive if you’re not making high six figures, and you can barely afford to rent without a housemate if you’re “only” making 90-100K. Outside the city is bad, too, in many suburban bits, you can’t get anything for less than 1.5M and that’s for things like an old, not renovated, rundown, 2Bd 2Bath. If you want something decent? 2.9M, probably.

    I waver between being determined to save enough to conquer that obstacle and shaking my head at how outrageous it is and rethinking whether I’d be willing to sink our cash into that if I did save enough for that. Especially since we’re coming due for the next Big One in the next 50 years. In some ways I’m grateful for the common sense checks on buying because we’re in a terrible drought in CA and we’re in prime earthquake country so maybe not buying is for the best.

    It’s so true that most people who comment on regular media are only a level up (if that) from being trolls, it’s only those who bother to seek out your blog to read more that tend to be a bit more thoughtful. :/

    • Jessica Moorhouse
      Reply

      Wow, ya that sounds a lot like Toronto and Vancouver price-wise. Ugh.

  • Potato
    Reply

    I can (and have) gone on and on and on about renting vs buying and the troubles in Toronto, so I know how hard it can be to get through to people and how reactionary the comments can be!

    To just focus on the comments issue, it is a very, very heated topic and it is exceptionally difficult to get people to look at the other side. Especially those who have bought (or who own and choose not to realize the windfall), they have a lot personally invested in the idea that buying is the thing to do — hearing that renting may be better elicits a lot of cognitive dissonance. So they resort to things like being nasty (“Oh you’re just entitled, move down-market until you can fit it in your budget!”) or dismissing the thought without seriously considering the evidence. I still try to change minds, but I don’t let the comments get to me.

    But I mean you had to go through that yourself: when you first announced you were looking to buy in Toronto, several of us told you to be careful or look at renting instead because the market was just ridiculous, but you had to see it for yourself before getting it. You didn’t lash out and call us basement-dwelling loser serfs, but you did have to walk your way over to the idea, it doesn’t hit you with a single article. And I suppose there’s something to say for that — people think you’re being entitled or spoiled when you say that absolute dumps are going for crazy amounts in bidding wars, and they’re all like “oh come on, in my day you had to look at a fixer-upper to help afford a place. You had to repaint and tear up some carpet and patch a few things but it was fine,” and you’re all like “no, I’m not talking about a fixer-upper, I’m talking places that should rightfully be condemmed, that have sagging roofs and mould and infestations and cracked foundations that are still going for crazy multiples in bidding wars.” But the average person can’t seem actually accept these stories as true until they see how crazy it really is.

    Same with rent-vs-buy — sure there are slummy rentals but there are also awesome ones, and they are way cheaper to rent than to buy right now. Even at the high end of the market: up by Sheppard Station there are three 5-bedroom mini-mansions for rent right now. Yes, the rent is high at ~$4500/mo, but the cost to own is even higher, with similar houses in the neighbourhood going for ~$1.6M-2M. If you could make even 2% on your money investing, you’re better off renting and doing that than buying one of those places. But I guarantee you the houses for sale on the same blocks will sell, and sell faster than those rentals get taken up, and those buyers will never have even stepped in the door of the rental option to see what their choices were.

    Anyway, I’m ranting long. Good on you for renting and speaking out about it, let the comments flow like water off duck’s back — changing minds will take time.

    • Jessica Moorhouse
      Reply

      Totally agree, I think a lot of those commenters don’t understand and won’t until they actually go house hunting right now and see what’s actually out there. They might be shocked! Thanks for the comment!

  • Erica
    Reply

    Owning a house isn’t all it’s cracked up to me. You do what is right for you. Every situation is different and people shouldn’t be judged based on that.

  • Bridget
    Reply

    I don’t think you’re an entitled millennial at all. This has nothing to do with actual prices it’s about affordability. It’s not fair that we can’t afford what our parents did at our age.

    However, I do want to address something:

    “Something that would be a good investment compared to spending money on rent every month.”

    ^^this mindset is killing you. It’s totally backwards. It’s completely wrong.

    If you believe houses are overpriced, that interest rates will increase, that the market is due for a correction, how can you possibly think owning a home is an “investment”?

    If renting allows you to afford the lifestyle you want to live, put money away for travel and savings, gives you flexibility and mobility, why do you resent it?

    I just put some numbers into RateHub and a $500,000 home with 20% down @ 2.59% will cost you $2,600/mo after utilities and property taxes.
    After 5 years of ownership, you’ll have only paid off $60,000 of your mortgage — and paid over $47,000 in interest.
    This isn’t even including the addition $13,000 in closing costs RateHub told me you’d need in TO, plus any maintenance/renovations which would be significant on a $500K home in your city.

    Is this really an “investment”? It looks like a colossal waste of money to me. Seriously. Just light your next 4 years of paycheques on fire instead, that will at least keep you warm.

    The idea that home ownership is an “investment” and renting is “throwing money away” is out-of-date and idiotic. It’s our parents’ mantra and they’ve been brainwashing millennials with it even though the investment landscape has totally changed. Stop buying into it, it’s going to make you broke.

    • Potato
      Reply

      I agree with Bridget (and have done a lot of work on trying to do the comparison well). Just to add some colour to the “out-of-date” part — the idea that “renting is throwing your money away” is a mental short-cut that has such resonance because for most of our history owning was indeed the more profitable way to go. After all, on average landlords tended to make money. So on the surface it seems to make sense. However, though landlords generally make money (and stocks generally go up), they don’t always make money (and not all stocks go up): paying ridiculous multiples (of rent or of book value/EPS) is not a formula for investing success. And that’s what’s happening now in many of our big cities: Toronto and Vancouver have it bad, but Calgary, Edmonton, Ottawa, and Victoria are not exactly cheap, either.

      I’m not sure if it’s always going to be out-of-date though — there is that underlying logic that landlords should make money (even if they choose to burn it instead right now). I think at some point it will very likely correct… but until that day, I’m prepared to rent forever.

    • Jessica Moorhouse
      Reply

      You’ve got some great points Bridget! I think it’s just hard letting go of the whole idea that a house could be an investment because that’s been ingrained in my head for so many years.

  • Chrsitine Weadick
    Reply

    You do what is right for you…. I do agree that prices will come down when the interest rates go up as they always do…eventually. It runs in cycles like a number of other things. As for the comments made, there are people out there that live to complain…ignore them….

  • The Follower
    Reply

    I hear ya on this one. I thought that perhaps one day I might own a house in Vancouver but I can see that’s not going to happen. I do own a condo in a suburb that I rent out which is doing alright, but even that is not going super well.

    I’m actually pretty impressed that you were able to find a place just outside of downtown Toronto for only $1300. We’re in an admittedly huge apartment just outside of downtown Vancouver for well over $2000/month and I don’t think there’s anything whatsoever for less than $1800.

    I don’t see it changing any time soon since people have no problem renting out at these prices.

    • Jessica Moorhouse
      Reply

      Very true. I have a feeling too that if I move back to BC it won’t be to live in Vancouver. It’ll probably be closer to where I grew where it’s cheaper.

  • Kate @ Cashville Skyline
    Reply

    Ugh, commenters from online news stories really are the worst. Ignore them. You’re making the right choice to continue renting. If homes in my neighborhood were that inflated, I wouldn’t own either!

  • Melissa
    Reply

    To put it bluntly, a lot of commenters on major online publications are morons. Bottom-feeders. I don’t even bother reading the comments on many major outlets because they just make me hate humanity.

    Luckily, you know that rational people feel very similar to you and don’t consider you an “entitled millennial.” Personally, and I’ve written about this before on my blog, but I 100% agree with you that housing in cities should be affordable and SAFE, but it’s just not the case in many, many big cities.

    Where we live, I’d love to buy closer to downtown, but affordable housing here is dangerous (high crime rate areas) or too expensive. It’s ridiculous that our only options would be townhomes and condos – like you, I don’t want that. I can’t believe it’s too much to ask to find an affordable, 2 bed home with a small piece of land. But apparently wanting the same thing our parents could buy when they were in their 20s-30s makes us “entitled”. Go figure 😉

    • Jessica Moorhouse
      Reply

      I know, it’s tough letting go of that idea that I can’t afford the same things my parents and grandparents could when they were my age, but it’s just what happens as time goes on I guess.

  • Pira
    Reply

    Oh lord. I often read the comments on articles not because I think they’re intelligent but because they’re highly amusing and inane. I’m in exactly the same boat as you, and don’t think we’ll be buying for a LONG TIME. And that’s okay with me. Many of my friends seem to be in a huge rush to buy homes, and some even have bought modest townhomes in Toronto at upwards of $600k. To me that’s highway robbery and I’d personally rather wait and see what happens to prices and continue to rent. If that means renting forever, so be it.

  • Zac & Dana
    Reply

    Thanks for summing this up Jessica. My wife and I are in a very similar position. West GTA and currently renting because 650-700 in Brampton (work in Oakville) is insane. We’ve been very conscious savers and would like to get a small starter 3 bed,2.5 bath to start with.
    Yes, we are late to the party by about 7 years but what is going to happen to those yet to come? We are both contributors to this country but can’t find a place to lay our heads.

  • Sunny
    Reply

    Hi Jessica! I agree with you completely. At the end of the day, we can’t afford Toronto housing because of wealthy foreign investors coming in and greedily buying up all of the property. Real Estate agents are to blame also. The whole “flipping” trend is also driving prices up. Houses keep going up for sale, then coming back on the market 3 months after they’ve been sold for 60,000- 80,000 more than the original sale price. I know this because I used to work for a real-estate company. Take a look at what’s been happening in Vancouver. Toronto is going down the same road and no one is doing anything to stop it. My husband and I have friends who are renting condos in Toronto and literally have an entire floor to themselves because no one actually lives in the other units. The apartments are owned by people who don’t even live in this country!!! This is bullshit!!! Entire floors are being purchased and not lived in!!! Sorry for cursing but my husband and I grew-up here, are Canadian citizens, are University educated, have good jobs, no debt and still can’t afford a home close to work. We have put off starting a family because we were hoping to save enough for a down payment but there’s no point. We owned a 3 bedroom townhouse in Brampton where we used to live. We decided to sell it and move to Toronto because we both got jobs in the city. The 410 doesn’t move and commuting by GO & TTC cost a fortune. Our townhouse is now worth $100,000 more than it did when we sold it 3 years ago. Is anyone else baffled by this??? No work has been done to this house. Wages are less than they were when my parents came here in the 80’s. My dad made more in the 80s that I do today…literally – yet house prices are in the millions??? We decided to rent and keep saving and traveling and have our family because we’re running out of time. In hindsight we never should have sold our townhouse. We should have kept it and rented it out but my parents have been burned several times by renters so that put us off of the idea. I am trying to convince my husband to leave Toronto altogether. I’m frustrated.

pingbacks / trackbacks
  • […] We can’t afford to buy in our cities; that doesn’t make us entitled millennials […]

  • […] I’m Not an Entitled Millennial Because I Can’t Afford to Buy a House in the City I Live In by Jessica Moorehous on Mo’ Money Mo’ houses explains why she and her husband decided to rent indefinitely when they couldn’t buy even a small home in Toronto for $500,000 with 20% down. […]

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