With the rising cost of living over the past few years, young people are having to make “significant sacrifices” to reset their financial security or be able to own a home in the future.
Young people are choosing to live in cost-effective vans and show off their tiny living quarters on TikTok to appeal to the internet.
Michael Albers, a TikToker with 57,000 followers, moved into a van a year after graduating college while working at Google at age 22. This changed his financial future “forever” and paved the way for homeownership.
“I chose to live in a van as a short-term sacrifice to pretty much guarantee my long-term financial future,” he said.
“I decided to buy and build a van to save on rent and use that free money to invest…so this isn’t my forever plan. But at least it was a great start. So we have a strong foundation for the future.”
Albers named his campervan “Ted” and lived in it for about a year before selling it because he “got really homesick and lonely.”
After selling his van, he and his fiancée moved in with his parents.
After that, Albers moved from Google’s team, moved from California and bought a house in Atlanta, he said.
“I have a fixed home…my life is a little different now, but it’s very fulfilling and I’m very happy,” he said.
Cort and Nate, a couple who live in a van, have amassed 2.5 million followers over nearly five years of showcasing life on the road.
Cote, 36, said he saved more than $70,000 in his first few years living in the van. She also was able to deal with her debts that she had and she also recently bought land in Southern California, she said.
“We didn’t get in a van to go out. We started this journey with the purpose of enjoying life and one day achieving financial security,” Cote said.
“Before we moved into our first van, we thought we would never own a home,” she said.
“After all the time we’ve spent and the sacrifices we’ve made… going back to renting isn’t an option, because for us it means we probably won’t be able to buy a house. .”
“It’s so expensive. Why is housing so expensive?” she added
The median price for new homes in the U.S. is near the all-time high reached during the Biden presidency.
However, as of December 2023 measurements (the latest available), prices are lower than the all-time high reached in October 2022.
The average interest rate on a 30-year fixed-rate mortgage in the U.S., tracked weekly by Freddie Mac, is down from its peak during the Biden administration (reached in October) but at the highest level in decades. It is at a similar level. 2023) over the past few weeks.
The interest rate on a 30-year fixed-rate mortgage is currently 6.625%.
Freddie Smith, a real estate agent and TikToker based in Orlando, Florida, says younger generations are realizing that building their parents’ financial future requires “more than just cutting back on Starbucks and Netflix.” That’s what it means.
“I think this is going to be a very popular story over the next three to five years because people are having to make such huge sacrifices right now,” he said.
Smith said the problem many young people are facing when it comes to buying a home is that over the past three years or so, median household incomes have been unable to afford the median-priced home.
“The biggest problem that Millennials and Gen Z have is, unfortunately, their incomes are not high enough to afford them the average home in America,” he said. “So to buy a $400,000 home, which is about the average price in America, you would need more than $100,000 with very little debt to qualify.”
“When it comes to living in a van, this is advice that people are embracing,” Smith said. “We see this becoming very popular because it eliminates a $2,000 rent burden and allows you to put that money toward your down payment savings. The larger your down payment, the more income you need to qualify. Because there will be less.”
TikToker Summer Ginther saved enough for a down payment after living on the streets with her partner for three years.
She explained that one of the most disappointing aspects of van life is having to store waste in tanks that need to be emptied “about once a week.”
“It’s not a fun job,” she said.
Another aspect of van life was isolation.
“We definitely don’t get to see our family and friends as often as we would like and we miss having that sense of community,” she said.
Vanlife couple Will and Meeves, who have 86,000 followers, have repeatedly talked about loneliness and the hardships of “driving for hours in the middle of the night.”
The hardest part, he says, is “not being able to meet people of my own age (or people doing the same thing)” and the “feeling of loneliness” that comes from not being able to see friends and family much.
The couple also said living in a van can be scary in extreme weather conditions.
“[During our] “The first time we spent a proper night in the van, we got hit by a big storm,” the couple said on TikTok. “[We were] So I was very worried about the thunder and wind. ”
Another problem I had was that my clothes would freeze when I tried to dry them after washing.
Fellow TikToker Dylan Gray moved into a van in 2019 to save money on housing. At the time, he was $3,000 in debt and working full time.
“It’s been the most difficult year mentally and physically,” he said of living in a van. But a year later he was debt free and bought his first home.
“Life is what you make it,” he said. “The hard work you put in is what you get.”