As the costs of homes and rental apartments continue to escalate throughout the nation, many younger millennials could find themselves in situations in which they need roommates to make ends meet. The outcome can often go one of two ways: total camaraderie, as in an episode of the iconic TV show “Friends,” or total chaos, as in the “Jersey Shore” reality TV series.
Johnny Wolff, CEO of HomeRoom, is banking on camaraderie, as he and his team continue to expand the business dedicated to pairing ideal roommates and creating more-affordable housing options in renovated single-family homes throughout the South and West. What’s unique about this business model is that HomeRoom is offering the opportunity to experience life in a stand-alone home, as opposed to an apartment.
Founded in Kansas City in 2022, HomeRoom’s mission is twofold: addressing the housing crisis by helping people find more-affordable living options, and helping investors maximize returns by purchasing and upgrading homes to rent. Wolff developed the idea for the business in 2018 after spending many years as a roommate himself.
“I probably lived with over 50 roommates in the last few years, and I kept thinking there must be an easier way to do this,” he told The Epoch Times.
While originally living in the San Francisco Bay area Wolff found it almost impossible to afford rent on his own. Working in finance, he later moved to Austin, Texas, where he again had to rely on roommates to make the monthly rent.
“I used services like Craigslist and Facebook marketplace to find people, but sometimes it was a bumpy ride,” Wolff said.
His idea of providing quality, yet affordable housing clicked with investors, and shortly afterward, HomeRoom was started. In a nutshell, investors purchase a home, make any necessary renovations, and rent the home by the room through Wolff’s platform. Common areas such as living rooms and kitchens are shared by the roommates, and everyone has his or her own bedroom.
Investor Interest
Matt Willer, managing director and partner at Phoenix Capital Group Holdings, recently invested in HomeRoom.“This caught my attention about a year ago, and I made a personal investment,” he told The Epoch Times. “It creates an affordable entry point for those who want to rent and still save money.”
Willer noted how younger generations are facing the challenges of not being able to buy a home because of steadily increasing costs and mortgage rates and often face high rents that don’t allow for any significant savings.
“Now they can have a nice house to live [in], in a good area, with their own bedroom and a shared kitchen and living room,” he said.
Willer is convinced that the company will continue to grow, as so many people are being priced out of apartments and financially unable to even consider purchasing a home.
“It will help people get on their feet without getting killed in rental costs,” he said. “ I think it will be a good return on my investment.”
Investors may also offer their own homes for rent, provided they meet HomeRoom’s criteria. Surprisingly, the average age of renters is 29, but candidates range from 18 to the mid-60s.
Home Prices, Rents Still Rising
The median sales price of a single-family home stands at $422,600 nationally, according to a July report from the National Association of Realtors. That number represents a 4.2 percent increase from July 2023, and the 13th consecutive month of year-over-year price gains. As of Aug. 15, Freddy Mac reported the average rate of a 30-year fixed-rate mortgage at 6.49 percent.Rents are also on the rise nationally. As of Aug. 19, Zillow placed the median rent for all bedrooms and all property types at $2,100 per month.
A recent report by Lombardo Homes, a Michigan-based residential developer, indicates that 75 percent of millennials (ages 28 to 43) want to buy a home, but three in four can’t afford a down payment. The report was based on a survey of 1,000 American millennials who are currently not homeowners, and 77 percent of them say their rent is too high to allow them to save for a home. Of that group, 54 percent owe money on credit cards, 40 percent have student loans, and 26 percent have auto loans.
Maria Perlman, spokesperson for Lombardo Homes, told The Epoch Times that while the desire for homebuying is there, the money is not.
“Younger people do want to own their own place—they want that single-family home with a backyard, but just don’t have the finances right now to make that happen,” she said. “High rents throughout the country are making it difficult for people to accumulate savings for a home.”
Potential HomeRoom renters determined to beat the high rents and save money are first vetted with background and credit history checks before being matched with other roommates.
“Using this approach, we can deploy a lot of inventory quickly, and investors have high returns without any hands-on responsibility,” Wolff said.
Acting much like a real estate broker, HomeRoom takes a 15 percent fee for its services, including the upkeep of the property. Tenants share the cost of internet, cleaning fees, and lawn care.
Room rentals can range from as little as $340 per month in Kansas City (Kansas and Missouri) to more than $600 per month in Austin, Texas. As for matching roommates, the company uses 15 areas of compatibility, often connecting people across different age groups and genders.
“It’s not perfect, but we have a team who’s ready to help if there are any issues,” Wolff said. “The matches usually work out I’d say about 95 percent of the time.”
Currently, HomeRoom’s rental homes are offered in 11 markets, including Kansas City, Kansas and Missouri; Dallas–Fort Worth; Charlotte, North Carolina; Pittsburgh; Phoenix; and Tampa, Florida.
Multigenerational Living Option
For those who may be more cautious about sharing a home with strangers, there’s a growing trend of living with family members as a cost-saving solution to the affordable-housing crisis.Another recent Lombardo Homes report indicates that 55 percent of Americans now live with their parents or grandparents to help cut costs and save money. A June survey of 1,000 U.S. residents ages 18 to 80 living in multigenerational homes shows that 95 percent reported that the household functioned successfully and 82 percent stated that the living arrangements improved their finances. Survey respondents were divided equally between male and female.
Multigenerational living is described as sharing a dwelling with parents, grandparents, grandchildren, adult children, or any combination of adult family members. Generation X (ages 44 to 59) make up the largest share of those living in a multigenerational household, at 61 percent. The Gen Z group (ages 12 to 27) make up the next largest group, at 59 percent, followed by millennials (ages 28 to 43), at 56 percent, and baby boomers (ages 60 to 69), at just 31 percent.
“It’s not a new trend, but it’s becoming a more widely accepted concept,” Perlman said. “Some younger adults are staying at home longer or moving back with parents after college so that they can save money. Sometimes, older millennials will have elderly parents or other family members move in with them to share expenses and also provide eldercare for them.”
While finances were cited as the top reason for multigenerational living choices, others included maintaining close family times, sharing responsibilities, elder care, and companionship. On the flip side, more than 62 percent named lack of privacy as one of the biggest challenges of this type of living arrangement. More than 70 percent reported that the home did not have separate living areas for different generations.
Of Americans who don’t currently live in a multigenerational home, 31 percent indicate that they are currently considering the move. That group includes Gen X and millennials, at 33 percent, followed by Gen Z, at 28 percent, and baby boomers, at 25 percent. Almost half of the respondents grew up in a multigenerational home, and of those who did, 84 percent said it was a positive experience.
“A lot of younger people in multigenerational living situations do plan to purchase their own home within the next five years,” Perlman said.
