As millennials turn 40 in 2021, CNBC Make It launches Middle aged millennials , a series exploring how the older members of this generation came of age amid the Great Recession and the Covid-19 pandemic, student loans, stagnant salaries and the rising cost of living.

When it came to buying a home, Jessica Kenney didn’t stress the style of the house or the number of bathrooms. She dreamed of finding the perfect setting for her courtyard wedding and a comfortable home to start her family.

In 2010, Kenney and her then-fiancé purchased a 1,700-square-foot, three-bedroom, two-bathroom ranch-style home in upstate New York for about $ 80,000 – under their budget. initial $ 100,000. But since the couple were also planning a wedding at the time, they didn’t have the money available for a down payment. Instead, they cut 0% and incorporated the closing costs into the mortgage, also known as “No mortgage at closing cost”.

But the couple quickly realized that it was difficult to make their new budget work – especially when Kenney got pregnant right after the wedding and chose not to return to work full time. “The cliché of what I thought life was supposed to be like made us make bad financial decisions,” admits Kenney, 34.

Like most millennials, Kenney’s financial struggles over the years have been due to a confluence of factors including rising costs of housing and living, student loans , a sometimes tough job market, and the cost of living. children’s education.

Foremost among these concerns: payment for housing. As the the oldest start to turn 40 this year , some members of this cohort were hit by a perfect storm in housing: rising costs, scarcity of supply, lack of new developments, rising debt and wage growth has stagnated. These factors have forced many Generation Y to stretch their already overburdened budgets to the maximum and, in some cases, hampered their ability to move forward and save for the future.

About a third of older millennials, those born between 1981 and 1989, say housing is their biggest monthly expense, according to a recent survey by The Harris Poll on behalf of CNBC Make It among 1,000 American adults aged 33. at 40 years old.

Finding affordable housing is a challenge across generations. In 2019, before Covid-19 pandemic affected, about 37.1 million U.S. households paid more than 30% of their income for shelter, according to the Nation’s latest state of housing report by the Harvard Joint Center for Housing Studies. Of these, about 17.6 million spent more than 50% of their income on shelter.

Housing costs have been on the rise for decades, and have more than doubled since 1985. This is because one of the main drivers of affordability is supply.

It’s a simple equation: a lack of housing drives up prices. And the housing supply, especially the number of new homes under construction, never fully recovered after the last housing crash in 2008, according to Daniel mccue , principal researcher associated with the center.

“The housing stock has not grown as fast as demand,” he says. “Construction has been so weak for so long that we’ve seen some sort of restriction on opportunities to buy homes.”

Before the start of the Covid-19 pandemic last year, the number of single-family homes for sale was at its lowest since 1982, according to the Center for Housing Studies . As of September 2020, only around 1.24 million homes were listed nationwide, compared to 1.6 million already listed in September 2019.

This low supply has led to higher prices for new and existing homes, especially those in the lower price ranges, McCue says. Across the United States, home prices have been rising steadily since the start of 2012, according to CoreLogic. Before the pandemic, house prices rose 4.4% year over year in January 2019.

It’s not just homeowners who are feeling the pressure. Rent expenses for all generations have also increased steadily. In fact, the rise in rental spending has outpaced the increase in homeowners’ spending on housing, according to data from the annual consumer expenditure survey conducted by the Bureau of Labor Statistics. And tenant incomes have lagged costs for about 18 consecutive years, according to census data. From 2001 to 2019, rents increased by 15% while the median income of renter households only increased by 3.4% .

“Home prices have consistently outpaced people’s income growth,” says Lawrence yun , Chief Economist and Senior Vice President of Research at the National Association of Realtors. “This is one of the main reasons that buying a home for millennials and first-time buyers has become increasingly difficult.”

The pandemic did not help. Home prices increased by around 11.2% in January 2021 compared to the previous year, according to CoreLogic . the the median price of an existing home was $ 313,000 in February , according to research from real estate agents.

And around 63% of renters and 41% of landlords are still concerned about their ability to pay for their accommodation, according to search for Freddie Mac .

It’s not unusual for rent or a mortgage to be a person’s biggest monthly expense, but there can be negative consequences if housing costs are more than 30% of the budget, McCue says. “To pay for housing, people spend one-third less on food and two-thirds less on health care,” he says of Americans with lower incomes. And generally, their savings rates are much lower or even nonexistent.

Although Kenney earns around $ 38,000 a year now as an accountant, she and her husband had to go into debt in the early years of their marriage to keep up with the bills. This included personal loans to pay for home repairs and emergency expenses such as a new roof. And although the couple didn’t get help from the family to pay for the house, Kenney’s dad paid off part of his car and part of his $ 72,000 student loan balance.

But even with her father’s help, Kenney says she felt like her family was just breaking even. “We were just having a while,” she said. “We were just working to get by and never really making any progress. Things were going to happen with the house, like we needed a new roof or vehicles would die, and we had to run out and get a personal loan to cover it. “

Despite rising housing prices, millennials young and old continue to buy homes. Millennials have made up the largest share of homebuyers over the past seven years, according to the latest report from the National Association of Real Estate Agents .

Still, changing workplace trends may offer some relief when it comes to housing costs, Yun says. Due to the Covid-19 pandemic, businesses may offer additional flexibility to work remotely more often. Maybe not working 100% from home, Yun says, but even if workers don’t have to come to the office five days a week, it can cause young workers to look further from city centers for jobs. more affordable options. “We can start to see a trend among millennials where the flexibility of working from home gives them a choice of larger geographic areas,” he says.

And some existing homeowners like Kenney are also finding ways to cut spending – in many cases making big sacrifices to prioritize paying off debt in order to pay it off and start saving money in the long run. Five years after first owning the home, Kenney says she was finally tired of just getting by. “We had our kind of ‘ah-ha’ moment where we realized we were tired of being sick and tired,” she says.

Kenney and her husband started a strict no-spending financial diet in 2015. At that point, Kenney says she had about $ 42,000 in student loans left to repay, a $ 8,000 personal loan they had taken out. to pay for a new roof, about $ 4,000 on a Lowe card and a mortgage balance of about $ 71,600.

“I have always considered myself to be thrifty and good with money. The idea of ​​finding myself in debt on a credit card was just awful, and I never wanted any of that, but somehow I streamlined student loans, ”says -it. Kenney paid off his student loans in 2018, wrote off his personal debt, then saved up to pay his father $ 8,500 for his previous financial aid.

Today, Kenney and her husband have no debt other than their mortgage, which is over 50% off. The goal: to pay off completely by the end of 2024 so that they no longer have to worry about their monthly payments of $ 700.

“We have to get to our money, rather than let our money get to us,” Kenney says. “Having a plan for every dollar we earn has given us more freedom than we could ever have hoped for.”

CNBC Make It will publish more stories in the Middle-Aged Millennials series. If you are an older millennial (33-40 years old) and would like to share your experiences, please email Megan Leonhardt, senior journalist [email protected] .