Patrick Weaver and his wife, Leah, knew their growing family would soon burst the seams of their two-bedroom rental house in Metairie.

They had two children under five and a third on the way, and the 900-square-foot house on Codifer Road already felt like it could barely contain the energy of their rambunctious sons, now aged five and two.

 

So, they began house hunting last June for something within their $200,000 price range. Patrick Weaver, 32, is an associate pastor at Metairie Baptist Church in Old Metairie, so they wanted something close to his work.

Leah Weaver, 34, needed a place close to her job as a teacher at Haynes Academy. They also sought something close to their son's kindergarten at Metairie Academy, hoping at the very least to stay east of Power Boulevard.

 

But everything they liked in their desired neighborhood was out of reach. There were few homes in their budget that didn't have major structural issues.

 

"To say we were priced out of the neighborhood is an understatement," Weaver said.

 

A lack of affordable housing for sale, combined with higher interest rates and skyrocketing insurance premiums, have kept many buyers like the Weavers out of the New Orleans area housing market in recent years.

 

It's a problem for people of any age, but first-time buyers, traditionally in their late 20s and early 30s, face an additional set of challenges. They're saddled with more student loan debt than their parents or grandparents and their earnings are not rising fast enough to keep up with the increase in home prices. Younger buyers today typically don't have as much saved up for a down payment and are subject to stricter loan requirements than buyers in earlier generations.

 

"I feel sorry for younger buyers," said Kenny Taylor, an Allstate Insurance broker. "They're being hit from all sides."

 

National crisis

 

The problem is not unique to New Orleans.

 

Millennials and older members of GenZ nationwide have higher rates of student debt than any other generation in history, according to the Education Data Initiative, siphoning off money that could be going towards a down payment or monthly note on a house.

 

Another major obstacle facing younger buyers is the gap between the rise in home prices compared to the growth in wages. From 2000-2022, home prices across the U.S. increased 162%, according to a report from online realtor Home Bay that was compiled with data from the Federal Reserve and the National Association of Realtors. That's more than twice as much as income, which increased 78% during the same period.

 

Though that widening gap affects everybody, younger buyers, new to the work force, have not had an opportunity to build up their savings.

 

"At the end of the day, the price of housing has gone up and wages haven't" said Phillip Ewbank, a New Orleans-based Keller Williams realtor.

 

Then there's a shortage of affordable housing inventory in New Orleans and other markets across the country, particularly in the kind of desirable, trendy or family friendly neighborhoods that are often in demand from young people.

 

The result is that the age of the average buyer is inching up. Three decades ago, the average age of a first time homebuyer was 29, according to the National Association of Realtors. Now, it's 35.

An added problem for the New Orleans area - and across south Louisiana - is the double-digit increase over the past year in homeowners and flood insurance rates, which have come at a time when, interest rates art also double what they were just three years ago.

 

"A few years ago, you could buy a 1,500-square-foot house and insurance would've been about $2,000, adding $190 a month to your note," said Mary Dominach, a veteran realtor with Craig Mirambell Realty. "Now the insurance alone is $500 or $600 a month."

 

Those increases hit younger first-time buyers particularly hard.

 

Different priorities

 

The pressure points are keeping many buyers on the sidelines. Molly Chapman, 31, and her husband are among them. The couple have kept tabs on the market since moving back to the city during the pandemic in 2020, when the airline they were working for as flight attendants furloughed them.

 

The prices they have seen in the Mid City and Uptown neighborhoods they'd like to buy in has made them shy away from launching a serious hunt.

 

"Anything with walkability where we want to be is not in our price range," said Chapman.

 

Admittedly, the Chapmans are picky about the neighborhood they want to live in, and since they like where they're renting, they're not desperate to buy. Ewbank said that compared to older generations, Millennials don't view purchasing a home as a critical step of early adulthood.

 

"They don't have a fire underneath them that says, 'I've got to buy this house or it's going to disappear; "

Ewbank said. "Their priorities are different."

 

Sometimes, buyers don't have a choice.

 

In the Weavers case, the clock was ticking and their third child was due in January. So, they ended up widening their search area, even though it meant their morning routines and rush hour commutes would be all the more hectic.

 

In the end, they found a three bedroom, two bathroom home with a backyard and plenty of space in a quiet neighborhood in Kenner near Williams Boulevard and Napoleon Avenue. The seller, the son of a Baptist minister, offered them a good deal.

 

"It was a God-ordained story," Patrick Weaver said.

 

Solutions aimed at first-time buyers

 

The situation is worrisome to policymakers.

 

Young buyers bring life and vitality to Communities, not to mention a healthy tax base, that keeps them thriving. Jefferson Parish Council member Scott Walker grew up in Metairie in the 1980s and remembers when there were kids playing outside on every corner. Today, many of his childhood friends have migrated to the northshore where they were able to afford bigger homes. 

 

"Attracting young people is vital, Walker said. "It's for the future of the parish.'

 

Experts are trying to find solutions specifically for first-time homebuyers. The Jefferson Parish Finance Authority offers a 30-year, fixed-rate mortgage and a second, five-year, forgivable mortgage to help with payment and closing costs for first-time buyers who make less than 80% of the area median income.

 

The agency also has grant programs available to education and healthcare employees, first responders, and active or former military members. Other agencies, including the City of New Orleans, offer similar programs.

 

But some buyers make too much money or have too much wealth to qualify for some programs. Others have strict requirements.

 

"On some of these loans, the buyers have to agree to keep the house for 15 years and live in the house or the bank could claw back some of the money and they usually pro rate it," Dominach said. "So it's not as helpful as it would seem."

 

Some see new construction as a possible source of relief, though that means moving to the outskirts of the city or neighborhoods that were damaged in storms and are now being rebuilt. 

David Favret, a realtor with Reve Realty, pointed to areas in Arabi and parts of Gentily that have seen new construction in recent years. An awarded advantage of those houses is that they have new roods, which helps lower property insurance costs. 

 

"I think that is going to be the answer for first time homebuyers long term," he said.

 

Others have more of a strategic approach of practical tips, such as creative financing arrangements with sellers like asking them to help cover closing costs.

 

Jacob Freedman, a realtor with French Quarter Realty, advises his clients to be patient and keep shopping. He also encourages them to pursue a house they like, even if slightly out of their price range, because sellers these days aren't getting as many nibbles and may be more inclined to come down.

 

“A good house at $350,000 might have five buyers,” Freedman said. A house at $500,000 might not have as many offers so you can work the seller down.