Nicole Christianson, a 26-year-old sales rep, was tired of writing big checks for tiny apartments. And she wanted to do more with her cash than stash it in a savings account.

One night, she and her husband Thure, 28, took a look at their newly combined finances and uncovered a pleasant surprise: Together, they had saved enough for a 5 percent down payment on the affordable fixer-upper right across the street from their Milwaukee apartment. They closed in December 2017, and Nicole Christianson says they’re happy to finally be “making something that’s ours.”

Millennials’ homeownership goals

Many in Christianson’s age group are chasing that feeling. Eighty-two percent of young adults say owning a home is a priority, according to NerdWallet’s 2018 Home Buyer Report. If they can make it happen, most will be first-time home buyers , but that ‘if’ looms large.

Millennials (those born from 1981 to 1997) are buying houses at lower rates than when previous generations were the same age, and it’s not hard to see why. Saving up for a down payment and qualifying for a mortgage can feel like pipe dreams for young adults grappling with student debt, underemployment and high rent costs.

Still, millennials are a optimistic lot, and research shows there are big rewards in store for those who find a way to buy their first home sooner rather than later.

How buying young can pay off later

Of today’s older adults, those who bought their first home from ages 25 to 34 accumulated the most housing wealth by their 60s — a median of around $150,000, according to a report by the Urban Institute , a nonprofit research organization.

In contrast, the median housing wealth for those in their early 60s who bought later (ages 35 to 44), was about half as much, at $76,000. Homeowners who bought after they were 45 had about $44,000 in housing wealth by their 60s.

“Housing wealth” is another term for equity, which is the difference between the home’s market value and an owner’s mortgage balance. Equity becomes profit when a home is sold or refinanced, and it’s more likely to grow the longer one owns the home.

The takeaway for millennials? Buy a home as early as you can feasibly do so, says Laurie Goodman, vice president of housing finance policy at the Urban Institute.

Paying rent to yourself is a top perk of homeownership, Goodman says. “It’s also forced savings in the sense that you’re paying down a mortgage each month. Yes, you could put away the same amount of money in a savings plan, but people don’t.”

Thinking about homeownership as part of retirement planning is important for millennials, says Jung Hyun Choi, a research associate at the Urban Institute.

“People are living longer and job stability has declined,” she says. These circumstances make housing wealth even more essential.

Loans and programs that boost affordability

Certain mortgage options can reduce the upfront costs of buying a home, allowing younger borrowers to qualify with far less than the traditional 20 percent down payment.

“We wanted to go with a VA lender,” says Marissa Avila, 33, a self-employed small-business consultant in Norfolk, Virginia. Her husband Greg, 36, is in the Navy, so they were eligible for a loan guaranteed by the Department of Veterans Affairs. The VA loan helped the Avilas buy their colonial-style house with no down payment.

Low down payment loans aren’t just for borrowers in uniform: Some conventional loans require just 3 percent down, the minimum for a Federal Housing Administration mortgage is 3.5 percent and eligible borrowers can get a Department of Agriculture, or USDA, loan with nothing down.

Goodman recommends first-time home buyers investigate down payment assistance programs. State housing agencies often offer mortgage, down payment and closing-cost assistance. These programs may allow millennials to buy a home sooner than if they try to build savings, she says.

Talking to a lender can be a good first step if you’re not sure that you’re ready, Avila says.

“The worst that someone is going to say is ‘No, you need to save a little bit more money,’ and then you know where you stand,” she says. “It’s so much easier once you finally start that conversation.”

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