Generation Y Newlyweds

Posted by: Michael S. | Feb 19,2008


It’s a tough time to be a newlywed – whether you got married last year or you’re planning to get married this summer.  The reason is that it is such a bad market to buy a home.  Surprisingly, a new study has come out that suggests most of those who are in Generation Y (age 18-29, prime years for marriage, especially at the tail end of Generation Y) have a greater interest in buying a home than people in other demographics.  

This makes sense when compared to older generations, who may have their home buying behind them, but more young people from Generation Y are interested in home buying than Generation X.  The article also points out Generation Jones (age 43-52) which is entirely a new one on me.

The trouble is that people who comprise Generation Y are also the same young people who rack up significant credit card debt.  The two don’t go hand in hand.  Amassing high credit card debt will get in the way of buying a home, even if it wasn’t a bad housing market, in which it is increasingly difficult for people with a limited credit history to get a mortgage.  If you’re 26 with a perfect credit history – paid off all your bills on time – this will not matter if your credit history is only five or six years old.  In addition, a person in their twenties likely only has three basic types of debt: student loans, credit cards, and car payments.  There may be others, but those are the most common.  The loans that carry the most weight with lenders are large loans like mortgages.  So it’s a bit of a Catch-22.  You can’t get a good deal on a mortgage without having paid off a mortgage

You may feel like student loans are a total weight around your neck, but paying off high student loans is a great way to establish a healthy credit history.  Of course, if you default this makes the prospect of buying a home that much harder.  Additionally, if you and your betrothed both have high outstanding student loans, this could be a problem with lenders.  

What this all means is one basic thing: though folks from Generation Y might be more set on buying a home, they’ve also got more obstacles in their way.  It may make sense to pay off credit card debt, student loans, and elevate that credit rating before you think about entering the housing market.  

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