Americans are living through the toughest housing market in a generation and, for some young people, the quintessential dream of owning a home is slipping away.
Americans are living through the toughest housing market in a generation and, for some young people, the quintessential dream of owning a home is slipping away.
Mortgage rates surged in recent years, hitting the highest levels in more than two decades last fall. While rates have come down slightly since then, home prices remain painfully elevated and a limited inventory of housing is still failing to keep up with demand. Such conditions mean that housing has become woefully unaffordable.
Falling mortgage rates in recent weeks have helped, but home prices could remain sticky, according to economists. It’s still a cruddy time to be hunting for a home, but it’s even worse for young, first-time buyers who need to save up for a down payment and build up their credit score during a time when Baby Boomers are refusing to part with their big houses.
The situation isn’t a whole lot better for renters, with rents barely coming down from record highs and half of tenants in that market saying they can’t even afford their payments.
The uneasiness over America’s affordability crisis is captured clearly in surveys and polls, but data that outlines the sentiment specifically among young people is limited.
I'm not sure where you live and how it works, but around here, mortgages can be significantly cheaper than rent. By several hundred dollars. Admittedly, this is not a desirable place to live, but you're talking $1000/mo mortgage vs. $1300-1500/mo rent of a house the same size.
I'd still have to pay rent while saving for a down payment. That's an easy $2500-$3400 a month with other cost of living expenses, retirement/savings, all while trying to save up a $120,000 down payment. Small homes start around $1M here.
If you don't make 6-figures here, the city will drain your bank and spit you out.
It's "amusing"[^1] to me that millennials are still considered "the youth" even though the oldest of them are in their 40's. I mean I knew I wasn't ever going to be able to afford a home by the early 2000's.
Alot of it is because retirement is effectively a thing of the past. People are working longer and longer, many until they pass. Pushing-40 millennials are still "the youth" because the people calling us that are used to their parents retiring at 55-65 even though they're that age now and NOWHERE close.
Plus, many of us can't "move up" in our careers BECAUSE those older folk aren't retiring anymore and giving up the "good" jobs (those that aren't being eliminated entirely of course.) They call us kids for not having big baller positions that we can't get cause they've held it for 25+ years. Same with housing - we're kids for not buying, but they won't sell and move on like they used to anymore while they fight new development tooth and nail.
TLDR they see 30-40 year Olds as "kids" because they see themselves as 30-40 when comparing their progress to that of their parents generation.
And Canada has been struggling with this for something like a decade. I am not Canadian, just adding to what you are saying in how this is not a problem that is limited to the USA.
Australia has it ridiculously rough right now, too, when it comes to housing. Maybe, just maybe, making it an investment instrument instead of a place to live was a bad idea.
We have the same problem as the US. Vote team red team or team blue. We have a team orange in Canada, however they're seemingly unable to find strong leadership.
I was lucky enough to purchase my home before it doubled in value just under 6 years ago. And at a 2 and a quarter % rate. And now I’m locked into this house now because there’s no way I’m jumping out of a rate this low.
~8 years ago here, the numbers didn't work out for me to drop my rate over covid but I found a house at $75k at 4.125 on a va loan, I recently bumped my payment to pay it off at 50 but my base mortgage is under $500. I'm not going anywhere.
Um, dumb question: I thought they only built very, very low-income homes. Which is fine, but as bad as the housing market is, I don't want to take a house out from under a needy family, for example. I'll survive, I always do...
Just looking at my local housing market, low income is where the housing is needed most. but what that means in dollar figures differs from area to area. Where I am, if you’re making $70k+ there are plenty of houses on the market you can afford (figuring a 2 to 4 times gross wages budget), but the median income in Alabama was something like $35k last I looked. Not much available those folks can afford.
I was going to post a similar sentiment. Maybe I’m being overly critical, but I remember when news was “new”. A version of this article comes out every other day.
I am 53 and live in DC. I bought just as the pandemic was starting when nobody knew what was going to happen and the rates were low. The market has since exploded and I could never have afforded the home I am in.
i do know a young, unmarried couple that bought a house last year. but it's an old house, a bit run down, and in a dinky little town an hour away from just about everything but walmart (20 minutes away). is cheaper to live there than it is to pay rent in the larger town (that hour away) where his job is. they did that for the year before that. they were 19 and 20 when they closed on it, and they did it on their own.
I never dreamt about owning a home. For me, living in the same place for decades is boring. I want to live spontaneous and free.
If I would get something for free, i could rent it to someone else after moving? I'm no wannabe landlord.
You can still buy a house in rural America. A simple ranch house is still $150k in many small towns here in Kansas. Jobs do not pay as much, and there are few amenities, but normal people buy a house, get married, and have kids.
My mother is rich. Not filthy rich, but rich enough that I will inherit a decent sum of money and a gigantic house and my daughter will get a trust. If my mother dies before my daughter is out of school (a distinct possibility since my daughter is 13 and my mother is in her 80s), we all want to move to the town where she lives because we all like it there a lot. And if we sell her house, we'll likely be able to afford to.
As far as her trust, it will likely cover her college education if that's the route she wants to go down, but probably not enough to get a house for herself.
Please don't think I'm being selfish here. She wants to move to that town with us as much as we want to move there. It's where both of her grandparents and much of her mother's family lives, it's where both her mom and I were born and went to college, and it is, for now, where she says she would like to go to college. She has never lived there and every time we visit she talks about how much she wishes she did.
From what I can tell, if she doesn't use that money for college, she would use it to travel over using it to buy a house. And frankly, I'm fine if she wants to live with us indefinitely once she's out of high school. We have the room.