Oct. 18, 2021

Should you (or...can you) buy a house?

Should you (or...can you) buy a house?

For generations, young people have been expected—nay, counted on—to buy a home by a certain age. Owning a house meant joining the ranks of real adults and laying claim to something with as much financial value as it boasted emotional value.


But then...reality kicked in. 


Today, buying a house is more complicated and, at times, more impossible, than it ever was for our parents or grandparents. Younger generations are stuck in a tricky spot—culturally, owning a house is really important but financially, it feels out of reach.


So what are we to do? How are we to reframe our understanding of homeownership to better fit the world we live in and not just the one our parents lived in?


Today, let’s explore and deconstruct the idea that owning a home of your own (mortgage included, white picket fence optional) is the ultimate marker of success. We’ll take a journey through the concept of real estate ownership in the modern era for our generation—and eventually answer the larger question...should I buy a home?


This episode was produced with our partners at Fundrise, Thinking Is Cool’s Season 2 presenting sponsor. As you know, I’ve spent all season telling you about how Fundrise really is changing the idea of real estate investing for everyday people. Today, we’re talking about why that matters so much—why real estate is something you can’t ignore—with the help and support of the Fundrise team.


I’m a Fundrise user and you can believe me when I tell you this: Complicated as real estate might be, there’s nothing complicated about using Fundrise. Fundrise is a platform on which you can invest as little as $10 in private real estate. No major costs, no major complications—just a quick and easy way to, oh I don’t know, put your money toward something more useful than just a rent check.


You might not be able to own a home, but that doesn’t mean you can’t invest in private real estate. And with Fundrise as my partner, I’m about to tell you why. Let’s take it anywhere.


Thank you! For listening! And hopefully for sharing! You’re the best. Follow me on Twitter and Instagram and hey while you’re here might as well sign up for my newsletter.


What makes a house a home? Is it that feeling when everyone gathers in the crowded kitchen even though you spent a fortune on a big, comfy sectional for the living room? Or maybe a house becomes a home when you host your first holiday. Or maybe...it’s just a mortgage that makes something yours? Let’s think about it.


Hello everyone and welcome to Thinking Is Cool, the show designed to make your next conversation better than your last...even if you say “it’s a buyer’s market” during that conversation without having any idea what a buyer’s market actually means.


I’m Kinsey Grant and I’m a journalist, the host of this show, and a tragically and seemingly perpetual renter. The biggest things I’ve ever owned myself? A mattress that’s too soft for my taste but that I’m also too proud to replace. A midcentury media console that I almost broke all my fingers building. A vast collection of sweaters and denim. And that’s pretty much it. 


Like a good millennial/gen Z cusper, I don’t own anything big like a car or a house. For most of my adult life, that hasn’t bothered me much. I’ve always had a roof over my head and a subway underfoot. But as I’ve spoken about on this show before, I’m closing in on my 27th birthday in a few weeks.


Truth be told, I thought my life would look different at 27. When you’re 17, 27 seems like middle age. 27 seems like the point in your life at which you’re really an adult—I thought that by 27 I’d own a dog and be married and wealthy and paying a mortgage. I thought I would be a homeowner. That’s what I saw in movies, and that’s what I knew my parents had accomplished by their late-20s.


But now that I’m actually here, I scarcely feel like an adult most days. Most days, I’m kind of making it up as I go along and that’s fine by me. Marriage and kids and settling down and all of that seems less important, and at the very least far off. But there’s one thing about this idea of 27 that I can’t stop thinking about as I near my previous benchmark for real adulthood—owning a home. 


*Fade out intro music*


Perhaps it’s because I’m almost always looking for a new apartment; perhaps it’s because I live in one of the best/worst real estate markets in the world, perhaps it’s because looking at apartments I’ll never afford on StreetEasy is my strange addiction. But either way, I find myself constantly thinking about the reality that I might own a home.


It’s troubling for me, not because I want the headache of being a homeowner but because I was always told growing up that owning a home is the biggest and most important investment you make as an adult. I mean, my mom literally told me this last week:


JANET: Your house is your biggest investment in your life. And think about it. Kinsey mortgages are 30 years. Like, isn't that crazy? I haven't even been alive for 30 years. 


A home is where you build a life, but it’s also where you build your wealth. A home is important. A home is a milestone. But who sold us all that idea? All I know is that I thought I’d be a homeowner at this age, but now that I actually am this age...I’m kinda like what the hell?


Today, the truth is this: I can’t afford to build a home or my wealth. I can’t afford a mortgage. I can’t afford a down payment. I can’t afford to own a house. What if I can never afford it?


The larger question here? Who can? Who can afford to buy and own private real estate, and is doing so still the marker for success, for adult success? At the end of the day...should you buy a home? Let’s think about it.


This is a conversation that comes up in my friend group all the time. My best friend owns her own home (she’s also married and has a baby). But most people my age are struggling with this home ownership idealism paradigm all the time. I’m excited to talk about it today, and I’m excited to do it in partnership with the incredible and very smart people at Fundrise. As you know, I’ve spent all season telling you about how Fundrise really is changing the idea of real estate investing for everyday people. Today, we’re talking about why that matters so much—why real estate is something you can’t ignore—with the help and support of the Fundrise team.


I’m a Fundrise user and you can believe me when I tell you this: Complicated as real estate might be, there’s nothing complicated about using Fundrise. The gist is this: Fundrise is a platform on which you can invest as little as $10 in private real estate. No major costs, no major complications—just a quick and easy way to, oh I don’t know, put your money toward something more useful than just a rent check.


You might not be able to own a home, but that doesn’t mean you can’t invest in private real estate. And with Fundrise as my partner, I’m about to tell you why.


As always, nothing is off limits, everything is on the table, take it anywhere. And remember, thinking is cool and so are you.


*Roll transition music*


Growing up, I thought adulthood would be a lot more linear. Go to college, get a job, save a bunch of money, get promoted, buy a house, settle down. That was the way the world worked, and I anticipated it would work that way for me, too.


But now, I know that adulthood is anything but linear. I’ve had three jobs since I graduated. I’ve saved in fits and bursts and never very methodically. I’ve lived in three different apartments and had a handful of promotions. And all of that has happened in a torrent—there’s no right way to grow up and settle down.


It’s something we learn with age—our ideas and markers of success change with each coming generation. But through it all, there remains this vestigial remnant of the American dream our parents grew up on—owning a home is as important emotionally as it is financially. 


That’s where I want to start today. I want to deconstruct and unpack the idea that home ownership is this ultimate kind of goal. Because, faced with the reality that I might never own my own home (more on that in a few minutes), I’m struggling to fully comprehend why I find that reality so devastating. Why do I care?


Because history tells me I should.


Allow me to explain, drawing on a piece I read in The Atlantic: Historians by and large agree that 20th-century housing policies made us feel the way we feel about home ownership. See, following the Great Depression, the government subsidized the creation and consumption of single-family homes.


With that, the American Dream morphed and evolved into an ideal focused centrally on the idea of buying your own house and turning that house into a home.


When I was exploring the root cause of this deeply held belief, I did the obvious thing for anyone hoping to glean insight into something cultural and unspecific: I went to Twitter. There, I got to DMing with Katie Gatti, a longtime internet friend of mine and a personal finance blogger. She runs Money With Katie and she just put out her inaugural podcast episode about...you guessed it, owning real estate. Here’s some of what she had to say:


KATIE: So you could point to this cultural thing that's super ingrained in the United States, this idea of rugged individualism, that we're a nation that holds itself up by its bootstraps. And even George W. Bush was quoted saying that, you know, we're a nation of owners.


And I think it's definitely baked into the rhetoric in the U S. Really hard to escape, right? Like the cultural soup that you grow up in, it can feel like they're your beliefs and your ideas, even when you're really just internalizing these kind of cultural norms.


She also told me this, which I’m including as a little food for thought:


KATIE: I also tend to take a more cynical perspective when it comes to why the government incentivizes homeownership.


And there's some really interesting socio-political theories. Homeowners tend to be more responsible that they take better care of property. That they're more economically productive because they have this 30 year, multi hundred thousand dollar loan that they're paying off that, you know, they're less likely to commit crimes because they have more going for them and more on the line.


The idea is that the government may want to incentivize home ownership for the same reasons that they want to incentivize things like religion, because it's generally thought to make for more responsible citizens.


Take that how you will. But whatever the reason, the government enabled us to buy houses and we liked it.


As the historian Jeffrey Hornstein wrote in 2005, “Americans, particularly white Americans, came to think of themselves as inhabiting a classless society, composed of one big ‘middle class,’ its membership defined to a large degree by actual or expectant homeownership.”


Like it or not, our society is widely buttressed by the idea of class. Owning a home feels like one of the more universal experiences of making it in America, whether you’re making it in a suburban McMansion or a metropolitan penthouse or a rural split-level. If you owned a home, you had something


It’s about more than just having a place to live and grow and feel comfortable putting your feet on the coffee table. Historically, if you had a house, you had something valuable, and valuable beyond just the intangible ways a home brings you joy. 

  • According to Bloomberg, “The best method for building broad-based middle-class wealth is still homeownership. Houses are a physical, tangible asset that people of all walks of life can understand and feel confident in. Unlike other forms of wealth, a mortgage also nudges people toward saving more of their income. This is probably why the middle class tends to hold most of its wealth in houses.”
  • According to CNN, low- and middle-income people attain nearly 50% of their net worth from the equity in their homes.


And investing in real estate? The same logic tracks. Fundrise told me this: Relative to a traditional portfolio composed of 60% large-cap stocks and 40% bonds, a portfolio which includes some allocation to private real estate has historically shown the ability to drive higher returns, with generally more annual income and lower volatility over the past 20 years.


Real estate is a strong investment—this we know. Beyond that, home ownership is lauded as an intergenerational, sustainable cornerstone of American wealth-building, both financial and emotional, and it has been for generations. But what’s that saying? Change is the only constant? I think that’s it...


*Roll transition music here*


The archetypal idea of owning a home in America is steady. The real estate itself? Not always so. Let’s take a moment to consider the ways home ownership, and even just the act of finding a house to buy, have changed.


Our first lesson in modern real estate: Buying a home outright will always be a risky endeavor. Today especially, the housing market is an overheated whirling dervish of record-setting prices in some markets and nightmarish competition in others.


Part of that is because of ye olde pandemic.


Already, before we knew what social distancing was and before the word “variant” became a huge trigger, there was an inventory problem in this country’s real estate market. Affordable housing became the white whale of many would-be buyers, dwindling away with each passing year. Simply put, middle income buyers have been slowly priced out of the market over the last several decades. 


When Covid-19 hit, the lack of available and affordable homes became even clearer and more troubling. Our lives changed—lifelong renters suddenly saw the appeal of a backyard, city folk headed for the ‘burbs where the work-from-home life might be a little easier, and as I talked about last season on this show, gobs of people moved across the country to new cities to put down roots, both literally and figuratively. 


It soon became clear that this was a seller’s market. Homes in cities like Austin, Texas, would be sold within 24 hours of listing. Everyone wanted a house in a hotspot, and the prices showed as much.


According to Forbes: Page-per-property views on real estate platforms like Realtor and Zillow were up over 50% year-over-year almost everywhere earlier in 2021. Inventory in America’s 100 top metro markets has been shrinking since March, along with days on market and the gap between list-to-sale price.


It’s worth noting that prices have leveled out some across the country as we settle into something closer to normal than we’ve seen in a long time. In April, the median listing price increased 17.2% year-over-year, per the WSJ. In June, the median listing price increased 12.7% year-over-year. I mean, it’s still 12.7% more but...you get the idea.


That’s part of why real estate and where you buy it have become a hotspot for thinkbois during this season of “here’s a thread.” It felt as if though, suddenly, real estate was a cool and smart thing to talk about. Maybe it’s because we were stuck in our houses. Maybe it’s because we’d drained the crypto tank and weren’t ready for web 3 yet. Maybe it’s because of those interest rates we keep hearing about. 


But maybe, just maybe, it’s because real estate can be just as fascinating—and risky—an investment as anything else we love to hate on Twitter.


Consider this from the WaPo: “While low interest rates have fueled a lot of this demand, they’ve also generated a lot of competition. Real estate investors are not only competing with everyday home buyers, but also corporate investors with deep pockets. With so many dollars chasing so few properties, you’ll probably pay a premium price, which dramatically curtails your potential profit margin. If the economy takes a downturn or interest rates rise, the property could depreciate for reasons entirely out of your control.”


I’ve always been told, like I told you earlier, that investing in a home of your own is the ultimate investment. It’s a wealth builder and it’s reliable and it’s a rock solid adult thing to do. It’s, importantly, a way to diversify your investments out of just the bonds and stocks and crypto you already own. It’s physical, and that makes it different.


But there’s an interesting limiting factor to that knowledge that I’d not considered until I started researching this episode: A big problem with homeownership as an investment strategy is a lack of diversification. Real estate can diversify your portfolio...but it can also hamstring you bigtime. Katie?


KATIE: If your net worth is $400,000 and 390,000 of that is tied up in your primary residence. And the other 10,000 is sitting in your checking account in case your HVC unit breaks, you are in a very risky financial position because 98% of your wealth is tied up in a single asset and not a single asset class.


You're not invested 98% in real estate. Generally you're invested 98% in one single problem. If I told you I was going to invest $300,000 in a single stock, he would tell me I was crazy. But for some reason, when it comes to homes, we just, we throw that out the window and we celebrate this giant bet on a single asset.


That, of course, is if you buy a home. I think you know where we’re going next...renting vs. owning. When you try to understand the nature of our very American approach toward home ownership, one of the first bits of discourse you encounter is the renting vs. owning debate.


I’ll let the NYT explain the ground rules for said debate: “Renting doesn’t tie you down, nor does it require a huge down payment. On the other hand, buying can be a profitable long-term investment with tax benefits.”


It’s about cost/benefit here, but there’s more to the story than something as binary as owning vs. renting. I’m going to read you a bit from a very good piece in The Atlantic

  • “America conceives of itself as an “ownership society.” Nearly two-thirds of U.S. households own their home, and the idea of renting is inseparable from ownership in the U.S. context. Renting is given meaning by its relationship to ownership—it’s how you live if you can’t afford, or aren’t yet ready, to own. America treats renting as it has treated the minimum wage for the past several decades: unworthy of serious concern, just a phase in young people’s lives, and a long-term outcome only for those unwilling to pull themselves up by their bootstraps. This perspective is a big part of why renters enjoy so few protections, and why the U.S. showers roughly $150 billion on homeowners each year but only a fraction of that on renters, despite renters having about half the median household income of owners.”


I can sit in front of this microphone and tell you how important it is to consider real estate as an investment all day long. But the fact of the matter is this: Not everyone can consider real estate as an investment. Not everyone can even think of it.


When I started mulling over this question—should I buy a house, and better yet will I ever be able to—I did the natural thing. I called my favorite licensed real estate broker...my mom, Janet Grant. She’s been a broker at home in Florida for decades and has always been my go-to when I need yet another explanation of the word escrow.


I called my mom to talk about real estate in the modern context, and she’s the one who inspired me to start thinking about renting vs. owning. We talked about my reality: I don’t have the money for a down payment anywhere, let alone in New York City. Here’s part of our conversation:


JANET: Think about how many, um, payments you have made in rent in New York added up and realize all that money has gone down the drain. Yeah, because you didn't have a down payment to buy something 


Interjecting to throw in something my sister also said to prove that, yes, we were clearly raised by the same people:


MADISON: ​​it's really nice to know that you're not throwing your money away every month, but you're building equity in something that you own. And I think. That feeling is even bigger now that I'm renting after owning, because I know what it's like to build equity instead of kind of throwing money away each month.


Okay, now back to my mom who’s about to shatter my world in a handful of sentences.


JANET: And in New York, it's a little different because you have all the fees and the insurances and whatever, but still add up the money. Just let's say roughly $25,000 a year. And that's low right times, four years, right? Oh my God. You've, you've put, you've taken a hundred thousand dollars and dumped it down the drain.


What you’re about to hear is not going to be pretty. In fact, it’s going to be incredibly startling. And I want to preface it by saying that I have not lived a particularly outrageous life since I graduated college—I’ve lived in great neighborhoods, yes, but no super fancy apartments, mostly walk ups, only one spot with laundry in the building. 


Moms are always right, especially when it comes to math...according to the really horrifying calculations I just did, I have spent $92,780 on rent since I moved to New York City. That money could be 20% down on a $450,000 home.


But that $92,780 wasn’t paid in a lump sum. It’s been paid in small chunks, every month for about four and a half years. I can’t afford to save for an actual down payment because I have that rent payment every single month. That rent payment that inches higher every year. That rent payment that looms heavy over my monthly finances.


There’s an important caveat here, though, and it has to do with reframing our idea of what wasting money really means. Katie?


KATIE: Usually when people say rent a stir, when your money away, what they mean is that rent is an unrecoverable, costs that at the end of your 12 month lease, you have nothing to show for your money, except for, you know, like the roof that was over your head for 365 days.


And as an aside, the funny thing about this, like rent versus buy debate is that it's really the only place that I can think of where this argument. You don't go out to eat and then say, eating out is throwing your money away because at the end of the meal, you have nothing to show for it. Like you paid for the experience you're paying for a good or a service and renting is really no different than that.


But the sneaky thing about this comment that I really want to highlight that the idea is renting is throwing your money away. Is the implication, of course, that buying is not growing your money away, that the cost associated with buying are not unrecoverable, but that's not the case. The majority of your expenses when you buy a home are unrecoverable and that they don't directly build an equity.


What Katie means is this: There are so many costs associated with homebuying that we fail to account for when we look at the surface level—the property taxes, the mortgage interest, the insurance, the maintenance, the closing costs, the broker costs. If you want to cover all of those costs and make a solid return on the investment you made buying that home, you have to sell at a pretty steep rate of appreciation.


All things considered, though, I don’t even have the down payment to think about paying all those costs associated with buying a home. And even if I did, I’m not sure it’s the right financial decision for me right now anyway—like Katie warned, all net worth would be tied in one asset. A NYC apartment.


I, ladies and gentlemen, am the textbook millennial. I am stuck between a rock and a hard place. The rock is the fact that it costs way more today to buy a house than it used to and the hard place being that I am throwing money at a landlord every month instead of using it to buy a house. Culturally, buying a house is still important to me. Financially, doing so seems impossible. I was talking about this with my favorite millennial and favorite former homeowner who is now a reluctant renter moving to NYC this fall, my sister Dr. Madison Grant.


MADISON: I think we, millennials kind of have it worse than a lot of generations, and I know everyone says that, but we kind of got dumped out of college into a very weird state of the economy. And so it's hard to get caught up in a way that you can collect enough money for a down payment.


My sister is right. It’s important to read the macroeconomic room here to understand why. Handing the mic to Katie again.


KATIE: You can see this even in just the last 20 years, like the median income in the year 2000 for a middle-class family was $78,056. And the median income for a middle-class family in 2016 was $78,442.


So that means when you adjust for inflation, the average income for the middle class actually went down and people will often point to that, that wage stagnation. The student loan debt. And you know that these are two major reasons why millennials are behind their parents financially. 


Compound that reality I mentioned before—that we’re coming of age with tons of pressure but no means to buy a home—with the crushing fact that younger generations in America are saddled with debt (ahem student loan crisis) that our parents never encountered...and wage stagnation...and the general melee of personal finance today...and you have the perfect storm of a generational mismatch of expectations. 


I was born in 1994. It was early enough that my parents and society at large taught me that home ownership was an unequivocally good thing that I would soon enjoy. It was late enough that reality kicked in to show me that the dream of home ownership was perhaps always going to stay as such...a dream.


Let’s think about that.


*Roll transition music here*


We started today’s episode with Fundrise by laying a big question on the line: should I buy a home? How do we explore and deconstruct the idea that owning a home of your own (mortgage included) is the ultimate marker of success?


I think answering this question starts with understanding that resolutions look different for different groups of people. Home ownership, like a lot of the ideas we’ve talked about this season, is something that is greyer than it is black and white.


Should you buy a home or aspire to buy a home? I’ll attempt to answer that question in a few moments, but before I do, I want you to keep this in mind: The ability to own a house is dependent on race, class, education, geography, and age.


Is it possible for this generation to own a home in the way our parents did? I’m not sure. Real estate hasn’t always been out of reach for the working class, but today it feels as though it might be.


Here’s how that happened. Let’s start with this, a 2019 study from the real estate firm Unison cited in The Atlantic: Unison calculated how long it would take to save up a 20% down payment on the median home in a given city by squirreling away 5% of the city’s gross median income per year. Nationally, the gap between income and home value has been rising. According to their calculations, it took nine years to save up a down payment in 1975. Now it takes 14 years.


And that’s the aggregate takeaway. If you consider the stats in cities generally considered to be “where the jobs are,” you might get even more spooked:

  • In Los Angeles, it would take 43 years to save up for a down payment. 
  • In San Francisco, 40. 
  • In San Jose and San Diego, 31. 
  • In Seattle and Portland, 27 and 23, respectively. 
  • In the east, New York and Miami topped the list, requiring 36 years to save up that down payment. 
  • Only Detroit, at seven years, was under the national average from 1975.


A reminder that this study relied on saving just 5% of a city’s median income, which isn’t always what people do. But still...Judging by those 2019 numbers, I would be well into my 50s by the time I could afford a down payment here in NYC.


If you’re a median earner in a big city with great jobs but a trash real estate market, you might expect to afford a home in your 60s or 70s, if ever. Obviously, people buy homes earlier than their twilight years, but the means of doing so? Often chalked up to good stock options in your company or a loan from a wealthy benefactor (cough mom and dad cough).


Back to my own Mom.


JANET: It is very hard for people to be able to buy a home because the biggest thing is getting a down payment, because if you can't get 20%, then you have to pay private mortgage insurance, which adds to your payment. You know what I mean? If you can only get, and then if you don't have rich parent, most, most people buy homes are lent money down payments by their parents. It seems like a self fulfilling prophecy for iniquity. Yeah. Oh, definitely. 


According to a recent Harvard study: “Rising house prices, increased interest rates, stricter underwriting standards, and significant student loans and credit-card debt have made it harder for younger would-be homeowners to build up savings needed for down payments and closing costs.”


The only surefire way to go from would-be to homeowner?


Young people who received money from their parents, regardless of what for, were more likely to become homeowners during their lives, the Harvard study found. And unsurprisingly, wealthier and whiter populations transferred money to their children more frequently.


That has ripple effects, as you might expect. The biggest of those ripples? We’re compounding racial and socioeconomic wealth gaps with generational wealth gaps.


According to The Atlantic: “Largely as a consequence of housing prices, Generation X held less than half as much wealth in 2019 as Baby Boomers of the same age did two decades earlier, and Millennials are on course to hold even less.”


And from Bloomberg: “A recent analysis by the Center for Household Financial Stability at the Federal Reserve Bank of St. Louis found that millennials have 34% less wealth than would have been predicted from the experience of earlier generations. The gap is much larger for those without a bachelor’s degree. Many analysts have zeroed in on housing as the reason millennials have failed to match their predecessors. As of 2019, millennials owned only 5% of the U.S. housing stock, compared with 15% for the previous generation at the same age.”


And from CNN: “Nearly 70% of millennials, according to a 2019 study from the rental platform Apartment List, say they cannot afford a house due to rising prices...and nearly half of people 18 to 34 are rent-burdened -- meaning 30% or more of their income goes to rent.”


Clearly, the game has changed. To allow the standards and values of our parents to color any major life goal or social issue or date night outfit? Probably absurd. But for whatever reason, we’re allowing their standards and values to color our own when it comes to homeownership.


They viewed buying a home as a very noble but very expected box to tick. They also had a very different set of macroeconomic circumstances. And for that reason, I think it’s high time we reconsidered homeownership as the ultimate marker of American success.


*Roll transition music*


As you know, I’m a renter in a city of renters. So I asked my mom what buying a home meant


JANET: buying the house is a big thing, but I don't know. I think Madison bought a house and I wouldn't say it made her an adult. Would you not? There's an exception.


Madison, my sister and the former homeowner I’m closest to in this world, bought her first home in her late 20s in Athens, Georgia, and sold it about two years ago. I love her, but I don’t think having a mortgage instead of a rent check due made her anymore of an adult. It was a sound financial decision, but it didn’t seal her financial potential or fate.


Owning a home makes sense sometimes. But I think I’m wrong to burden myself with the reality that I might never own a home. It shouldn’t be a burden. Why does it matter? I have a roof over my head. I have appreciating assets. And best of all, I have options. More options than ever. Options everywhere. Options to build wealth on my own terms.


KATIE: So today, like anyone with an internet connection in $5 can start investing and building wealth immediately. Without becoming a homeowner. So I think financially millennials just have more options than buying a primary residence to build wealth the way that their parents did.


Owning a home? Renting a home? Living in a van? Couch surfing? None of these things makes or breaks your potential. You can...well, I’ll let Katie explain. She put it really well.


KATIE: you can invest in real estate without owning a home. Like you could buy public reads. Um, I personally invest in a crowdfunded real estate platform called fun rise and I rent. So I don't own a primary residence, but I do have real estate exposure. It's just not through owning a house. Right. And you know, you can even buy rental properties and rent them out for cash flow without buying a primary residence. And it really all just comes down to making sure that you're not placing a ginormous single bet.


As a fellow Fundrise user, Katie makes a really important point: The democratization of investing that we’ve talked about quite a lot this season means that everyday people like you and like me can now participate in the upside of investments traditional cordoned off for the mega wealthy. Real estate, thanks to platforms like Fundrise that Katie mentioned, is no exception.


Fundrise told me this: Pensions and endowments have on average 28% of their portfolios allocated to private market alternatives, individual portfolios currently have less than 5% on average, according to McKinsey’s 2020 report on the global private markets. And Fundrise? They plan to close that gap.


See, Fundrise has the same kind of thesis-driven approach to acquiring high-quality assets as traditional private equity funds like Blackstone or Starwood—they’re all focused on locations and asset types with the potential for outsized growth.


But Fundrise is designed to serve individual investors while they are designed to serve institutional investors, like billion-dollar sovereign wealth funds and endowments. Plus, Fundrise and platforms like it have this super intense focus on technology, which makes the investing process more direct and a whole lot cheaper for you and me. And that’s always a plus.


*Roll transition music*


Home ownership is yet another example of the ways our modern ideas of success don’t match perfectly with previous generations’ ideas of success. And that’s okay! I might never own a home. But that doesn’t mean that solutions aren’t available to help me participate in the upside of a historically superb investment like real estate.


It’s all about tweaking expectations and creating modern solutions to modern problems. Modern solutions like, for example, Fundrise. The fact that I can, from my laptop, invest in properties all over the country without burdening myself with a mortgage and a risky investment like a full house is exciting—it should be exciting!


So should you buy a house? I can’t answer that for you, but what I can do is first of all, roll this from my interview with Katie:


KATIE: when I look at this debate, I think, okay, those factors, those lifestyle factors combined with a plethora of cheap, easy to access, investing options, it just makes owning a home, less of a given today. I think it's still. Can be a luxurious option for millennials. Like if you are a millennial that kind of defies the dorm defies the average you're rolling in cash and you cannot wait to live in one place for the next 15 years in great buying a house might be a really good decision for you. But I just want people to realize that it's absolutely not a necessity. To building wealth. It's not something that you have to do or that you have to rush into.


And second of all, remind you that, no matter what year you were born, judging your own life based on the standards your grandparents set is never a good idea. So go forth and carve out your own path, financial, residential, and otherwise.


Here’s how I see my own path: I don’t need to stress about owning a home or never owning a home. I’m secure in my job and my personal life and I’m really, really happy. I invest in the stock market and I save as much as I can, but I also enjoy a nice meal out and the occasional online shopping spree. My life isn’t defined by my decision to own a house, and neither is my financial future. I have options, and options mean freedom. And freedom...well, it’s pretty nice.


I want you to think about what your path looks like, and maybe even do it with a friend. We’ve reached the end of another episode of Thinking Is Cool, which means it’s time for you to continue the conversation. Consider questions like…

  • Why do you think home ownership is such a hallmark of adult success in America? What to you actually means you’re on the way to success if it’s not owning a home?
  • Do you pay close attention to the real estate market if you’re not actively looking for a new place to live? Why or why not?
  • Have you taken full advantage of the plethora of options available to our generation in terms of investing tech? 


I hope you’ll think about it, and I hope you’ll let me know how that thinking goes. And most importantly, I hope you’ll think about investing on Fundrise. If I’ve imparted any wisdom in this episode, I hope it’s that investing isn’t one-size fits all and you have options


On Fundrise, anyone can start investing in real estate across the country, no matter where you live. You can live in Austin and own real estate in Orlando or live in New York City and own in San Antonio. 


Custom opportunities tailored to custom needs in a very specific macroeconomic moment with account levels ranging from $10 to $100,000. What’s not to love? Go to Fundrise.com/think to learn more.

And remember, thinking is cool and so are you. I’m Kinsey Grant and I’ll see you next week for my season two finale. That’s right—the season two finale. Don’t miss it.