In 1960, the typical home cost twice a family’s income. Today, it’s four times what a household earns in a year. And, still, there’s no guarantee millennial buyers will find their dream home.

By Louis Hansen

Photographs by Christopher Tyree

Virginia Center for Investigative Journalism at WHRO

Zach Jernigan and his wife, Ellie, had already slogged through dozens of houses and scrolled through countless Zillow listings in their quest to become homeowners.

On a recent weekday morning, the millennial couple had three more home tours lined up in suburban Richmond. But it was hard to get too excited, knowing their odds of finding the perfect home.

The hopes and dreams of young first-time buyers often crash into the waking horror of today’s real estate market. The median price of a home in Virginia rose to $373,000 from $305,000 before the pandemic — a 22% increase in less than three years.

After an encouraging tour of the first home on the day’s list, Zach, 30, and Ellie, 27, spent just minutes in the second home — a Cape Cod described online as “adorable” — before being overwhelmed by the smell of urine.

Moving on, the two drove to a three-bedroom, two-bath brick home with a big yard. They inspected the rooms with a weary detachment. Despite the refinished pine floors, windows needed to be replaced, and the home lacked central air conditioning.

As they stood in a barren upstairs bedroom, veteran Richmond Realtor Dare Tulloch guided them through a possible bid on the property, listed for $297,500.

Ellie interrupted. “This is an absolute ‘no’ for me.”

Zach nodded. “If you’re an absolute no,” he said, “there’s no absolute yes that goes with that.”

In recent months, the couple had browsed hundreds of online home listings, toured dozens of properties and bid on four, not one of them a dream home. And, Ellie noted, “We’re 0 for 4.”

They were learning a hard lesson — it’s not their parents’ housing market.

Different times

Driven by an influx of millennials, low interest rates and the scarcity of “for sale” signs planted in the suburbs and cities, Virginia housing prices rocketed during the pandemic. Supply has scraped record lows, driving bidding wars on properties even as interest rates have more than doubled in the past year.

It’s not just a gut feeling from first-time home buyers that it’s harder than ever to buy a house — in many ways, it’s much tougher than their parents and grandparents had it.

Consider the relation of home prices and household income over three generations. In 1960, the median home value in Virginia was roughly twice a household’s annual income. Today, home prices are more than four times what a family earns in a year.

The typical 1960s household had one breadwinner earning $5,000 annually (about $48,400 in today’s dollars), according to an analysis of census data by the Virginia Center for Investigative Journalism at WHRO. Then, the typical Virginia home cost $10,800 (or $105,000 in today’s dollars).

In 1990, a typical Virginia household had $33,300 in annual income (roughly $73,500 today), and the median home price was $91,000 ($200,700 in current dollars), according to the analysis.

Family dynamics have also changed dramatically in 60 years. Women have joined the workforce, and the stay-at-home mom has been replaced by the do-everything mom. More than half of U.S. families have two full-time workers, according to census data.

But despite the additional wage earner, the cost of buying a home has risen substantially faster than family income.

In 2021, the annual median income for a Virginia family was $86,200 in current dollars, but the median home price had risen to $352,000, according to the analysis.

The costs vary by region, with affordability less of a problem in slow-growing regions of southwest Virginia. But Hampton Roads, Richmond and Northern Virginia have driven the trend.

In Roanoke, for example, the median home costs about 3.7 times a family income. In Fairfax County, the homes cost 4.8 times what a household earns.

Ryan Price, chief economist for the Virginia Realtors association, said new homes have been getting larger, accounting for some of the rise in prices. But, he noted, first-time buyers have faced other obstacles.

Home sale listings have plummeted, and new construction has faltered with rising interest rates, Price said. The inventory of homes for sale in Virginia has fallen every month but two since January 2017 compared with the previous year, according to association data.

The shortage of homes for sale means more people are renting, pushing leasing prices higher, he said. And higher rents mean less money saved for a down payment.

“The lack of supply is pretty much affecting everybody,” Price said.

The percentage of income spent on mortgage payments has steadily climbed over the decades in Virginia. From 2015 to 2022, Virginia homeowners spent about 5% more of their paychecks on their homes.

Economist James Koch, former president of Old Dominion University, said years of not building enough new homes has made home prices unaffordable for many young buyers. Slow economic growth in Hampton Roads has made the problem worse in southeastern Virginia, he said.

“The Bank of Mom and Dad has become increasingly important,” Koch said. “Their children and grandchildren simply can’t afford to get into the market.”

What’s driving millennial home buyers?

Virginia Realtors are seeing the frustration first-hand — young couples stretching their budgets, entering bidding wars and tapping family members for help. Sometimes, they simply give up.

Realtor Reggie Copeland, based out of Northern Virginia, saw a young couple lose out on a home in Arlington. They went back into the neighborhood and started knocking on doors, asking owners if they would sell.

Others have had to ratchet down expectations after seeing suburban D.C. homes sell for tens of thousands of dollars over the list price. “It’s a struggle for a first-time buyer,” Copeland said. “A lot of them opt to continue renting.”

Chesapeake agent Barbara Sgueglia has seen enlisted military families struggle to get into their first home despite generous government incentives for active-duty personnel. Some Navy families have even chosen to share a house to save money, she said.

“We’re very, very close to a housing crisis,” she said.

Realtor Dare Tulloch with Zach and Ellie Jernigan, consider a bid on this four-bedroom home in Henrico County.

As Zach and Ellie continued their journey around the Richmond suburbs, they were guided by Tulloch, a family friend. While the single-family housing market has recently cooled from the super-heated pandemic bidding wars, it’s still been a challenge, she said.

In September, one of Tulloch’s clients bid on a property that had 47 offers. “Great for the one that got it,” she said, “but not for the 46 others.”

The Jernigans have followed a typical path for first-time buyers.

The couple met through mutual friends in Richmond and married in June 2021. Ellie is a nurse and student; Zach teaches computer science and astronomy at a Richmond magnet school.

They currently share a townhouse in Henrico County owned by Zach’s parents, who bought the property as an investment and a place for their children to rent. Zach and Ellie share the townhouse with one of his sisters.

Zach’s mom, Nancy Jernigan, said the rent was enough to cover mortgage payments, but below-market. She said they wanted to give their children a chance to save some money for their own homes. “Just to take the pressure off,” she said.

Nancy Jernigan and her husband bought their first home in 1987. Interest rates had sunk below 10%, and they searched for just a few weeks before finding a starter house in Henrico. Within a few years, they stepped up the property ladder into a bigger house in Hanover County. “It was definitely a different time,” she said.

Zach and Ellie have similar goals as their parents.

With two incomes and no credit card debt, they’re on solid financial footing. Zach paid off his student loans from James Madison University this summer, and Ellie’s employer pays for her schooling toward an advanced degree.

“We have a budget, and we’ve been trying to live off of one income,” Zach said. They’ve dropped their gym membership and cut back on Amazon shopping. The savings will go toward a downpayment.

Ellie, an Alabama native, has been updating her family on the home search. They’re shocked by the Virginia prices, she said.

She likes modern features — an open floor plan, upgraded kitchen, walk-in closets.

She really wants a home that feels right to raise a family in. “A house that if we want to stay there for 15 years, great,” she said. “But I’m trying to lower my expectations because some people’s idea of a starter home nowadays is not a starter home.”

They hear the advice from older generations and patter from financial gurus: Skip the daily coffee shop, make vacations staycations, eat at home, and soon you’ll be on the way to financial success.

“But I enjoy coffee,” Zach said. “I also want to own a home.”

Besides, he said, “if it was that easy, why isn’t everyone a millionaire?”

The couple wants to start a family and have enough space to grow. They set a budget of $350,000, with the ability to stretch if they fell in love with a home.

Nancy Jernigan has set aside a small amount of money from her mother’s estate to give to her three children for their first house. It’s not a million dollars, she said, but even a small boost can help.

“It would have been so good to have that financial security when we were buying a house,” she said. “I want my kids to have it.”

But she and her husband have let Zach and Ellie run their own search.

Another offer

Zach and Ellie’s weekday morning journey through the Richmond suburbs looked bleak after two hours of touring the three properties.

Ellie Jernigan, holds Gracie while she and her husband Zach follow their realtor Dare Tulloch into another home for sale. They’d seen the house earlier in the day but liked it enough to revisit and eventually put a bid on.

The couple returned to the first house of the morning — a restored four-bedroom, two bath Cape Cod with a deck, large yard and mature trees. The first-floor common areas were staged with modern decorations, rugs, chairs and a couch to evoke coziness in the space.

Ellie liked the updates, open floor plan and yard. The fences needed to be replaced, but other homes in the neighborhood were well-kept.

Ellie sat on one end of the couch, while Zach and Realtor Tulloch stood in the living room. The price was $300,000 — a $29,000 cut from the initial listing.

“So do we know if they have any offers?” Zach asked.

Tulloch called the seller’s agent. The agent texted back that the house had one offer.

They discussed a bidding strategy and budget for the property.

“Do you think 329 or 330?” Zach asked.

“I’m with you on 330,” Tulloch said.

“If someone wants to do 335, they can have it,” he said.

“It’s not worth it,” Ellie said.

They had endured months of house-hunting — online and in person — and been disappointed and educated with each offer. Ellie learned that they had lost their last bid from a Zillow text alert telling her a sale was pending on the house.

But they couldn’t let that stop them from trying again. Tulloch sent an offer on the tidy, renovated Cape Cod with the big yard.

“We actually got the house!” Zach wrote in an email days later. The seller agreed to an offer over list price, but below the couple’s budget. “It has been a whirlwind.”

They expect to move in a few days after closing in October.

Ellie Jernigan, 27, and her husband Zach, 30, leave a home for sale in Henrico County that they decided to put a bid on. After four unsuccessful bids with other homes, the Jernigan's were successful on this home and will get the keys in November.

Data journalist Jeff South contributed to this report.

Reach Louis Hansen at louis.hansen@vcij.org.

This story is part of a series about housing affordability in Hampton Roads produced in partnership with the Pulitzer Center on Crisis Reporting.