“How can a young couple possibly buy a house today?” This question is not new, but it has taken on a more acute tone lately. Since Covid, homebuyers have been whacked from both sides, first when prices skyrocketed, and then as mortgage rates increased drastically. The monthly payment for many houses quickly tripled or quadrupled! And while salaries have gone up too, they have not nearly kept up with the explosive cost of housing.
No Easy Answers
So, what now? Unfortunately, there are no easy answers. Housing prices rarely drop much, especially in popular frum areas. Thanks to our tendency to crowd into dense cities and our mushrooming population, KH, local housing demand usually far outstrips supply. That reality equals higher, not lower, prices. And no one knows if, when, and how far mortgage rates will fall. I would NOT count on that. Unfortunately, there’s no home-pricing relief waiting around the corner.
Realistic Solutions
Some advocate for grand communal solutions, such as offering heavily subsidized housing to the masses. Unfortunately, the chances of this happening are virtually zero. The sums required to satisfy the frum community’s needs are enormous, and that bill will grow exponentially. Except for a few rare initiatives, subsidized housing isn’t realistic. So again, what now?
The following ideas may ring hollow to people set on owning a particular type of house in popular frum neighborhoods. But numbers are numbers. It’s time to think outside the box for different, even unconventional, approaches to home affordability.
Accepting Smaller Space
Cutting home size expectations can significantly reduce housing costs. In some frum neighborhoods, much of the rise in housing costs has been driven by a substantial increase in the size of houses. Houses of 2,200 square feet or less used to be plenty for most. Much of the new construction today in Lakewood, for example, starts at 3,600 square feet. Add some upgrades to that, and prices rise by 50%, even without market supply and demand issues! Smaller equals cheaper.
Renting Out Space
Some take the opposite approach by renting out some of that excess space to help pay their mortgages. A rental apartment, whether in a basement or elsewhere, may make a large house more affordable than a smaller one! Other rental options include short-term rentals, seasonal rentals, pool rentals, or even leasing a room to boarders.
Moving Further Out
You can also save considerable sums by avoiding a frum community’s epicenter. Moving further out entails certain inconveniences, including a shortage of nearby family, friends, and communal resources such as shuls, mikvahs, and shopping. But buying an affordable house is vital, and sacrifices may be required. Hopefully, eventually, many frum families will follow. Soon, you may become an epicenter that others wish to get into but can’t afford!
Moving OOT
For the even more adventurous and open-minded, a handful of “out of town” (OOT) communities offer real estate priced 50-75% lower than “in-town.” Some of these small but vibrant kehilos also have state-backed tuition vouchers. There are obviously many pros and cons to be considered before moving OOT, but slashing two massive expense categories can be game-changing!
Considering EY
It behooves us to bring up Eretz Yisroel as a serious option. If you can be a “pioneer,” you should seriously consider gaining an aliyah at the same time. As ads in some frum publications have been telling us lately, “It’s shayich,” at least for some, to take the plunge. Those who can’t afford a home “in-town” probably can’t afford one in Yerushalayim or Bnei Brak either, but “OOT” options exist in Eretz Hakodesh, too.
Parental Assistance
Many parents will cosign on mortgages to help younger couples, typically those with lower incomes, qualify for their mortgage. Those with the means may also offer a substantial gift or interest-free loan toward a down payment. Slicing down a required mortgage can make the ongoing monthly mortgage payments bearable. This increased affordability may be the factor that enables an extended family to live near each other, a mighty motivation for many bubbies and zadies.
Yerusha Tapping
Even parents who aren’t rich may consider digging into their nest eggs to help the next generation set themselves up. It’s a bit morbid, perhaps, but this can be viewed as an advance on future yerusha. Many parents indeed express that they’d rather help their struggling adult kids now, when it’s most needed, and can offer maximum nachas “returns” versus after 120.
Tread Carefully
Except for the super-wealthy, gifting or even lending large sums requires cautious consideration. Undermining your financial stability to help independent adult kids is a bad idea. Predicting your future earning abilities and long-term financial needs is also very complicated. A further challenge is how to allocate assistance to children who may have very different means and needs. Seek rabbinical guidance and financial advice as warranted.
Cozying Up
The next idea can be the best or worst one imaginable. Those with space and iron nerves can offer married kids long-term living space in their homes. Saving a fortune in rent can make all the difference, with shared chores, extra pairs of hands, and in-house einikel nachas offered as side perks. But this arrangement is also an emotional tinderbox. Excellent middos and clear personal boundaries are musts, but I’ve seen this scenario work well for some.
Targeted Gemach Help
While large-scale subsidies are not viable, offering them to yungerleit, rabbanim, or a group of young couples may be required to keep expensive frum neighborhoods vibrant. Visionary philanthropists should consider making grants and long-term loans to help young couples establish roots in areas they care about. When done carefully, such communal investments will offer excellent dividends of many kinds.
The Real Answer
Sweating, maneuvering, and stretching to buy a home is usually wise. Hopefully, these ideas will be useful to you. However, buying six —and seven-figure assets will be challenging any way we slice it. Ultimately, Geulah is the only real solution to all our problems, financial and otherwise. Hopefully, it’s right around the corner. Klal Yisroel hasn’t felt this ready in a long time.
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