Few milestones in life mean as much to the American Dream as owning a home. And millennials have encountered the kind of trouble totally befitting their generation, which largely graduated into the teeth of the disastrous post-2008 job market. Just as they entered peak homebuying and household formation age, housing affordability is at 40-year lows, and mortgage rates are near 40-year highs.
The anxiety this generation feels about the prospect of never owning their own home affects their entire perception of their finances and the economy, says Moody’s chief economist Mark Zandi.
“If they feel like they’re locked out of owning a home it colors their perceptions about everything else going on in their financial lives,” Zandi says.
Millennials have long been dogged by a brutal housing market. They faced not one, but two, cataclysmic economic events—the Great Financial Crisis in 2008 and the pandemic in 2020. Both of which left them reeling financially and struggling to afford a home. The Great Recession decimated the real estate market as the economy nearly collapsed under the weight of tenuous mortgage backed securities. While the pandemic brought with it a remote work boom that caused millions of citydwellers to flee to the suburbs, sending housing prices soaring.
For those downvoting, the most effective lies always have some truth to them.
Honestly the biggest reason they can’t afford housing is because the majority don’t know how to budget and/or stick to it. This goes for a large amount of the poor as well. They’re constantly spending their money on consumables and other non-wealth building things. In the US, as a society, we’ve done a shit job of teaching our kids this valuable lesson, pun intended.
Doesn’t mean the value of the dollar isn’t lower than it has been in a while and that mortgage rates aren’t high (they aren’t the highest, by the way; it was at ~12% in the 90s). That food prices aren’t insane and that corporations aren’t taking advantage and jacking up their margins, they are.
If the system isn’t working for the majority, maybe it’s the system that’s flawed rather than individuals?
It is working for the majority is the thing. Most people have jobs, food on the table, and a roof over their head.
The people not well off are at a local maxima, sure, but way more than 50% of people have a comfortable life here in the west, so the system is working for most people.
It’s a tough pill to swallow, as much as life sucjs here in the west, it’s still a fuck tonne better than many other way way way shittier countries out there. US and Canada are still in the top 20% of places to live in the world.
If you look at the current state of society and think “things are working well for the majority of people” I’m not sure we’ll be able to engage in any meaningful discussion.
It literally is working for the majority of people mate, however you feel about it, poverty is the very small minority.
I would love to make poverty even less of an issue in the west, dont get me wrong, but the average person is fed, has a roof over their head, has a job, and is getting by.
Homelessness, poverty, illness, etc is a minority and that literally means the average person is not in that group.
Literally by definition, the average person is not the minority. That’s what the average means…
Poverty doesn’t refer exclusively to homeless people.
I had to come back to this comment just to point out that this isn’t the definition of “average” and the “average” person could very well be in the minority depending on what we’re measuring (and which measure of central tendency we’re referring to when we say “average”).
As an example: The mean number of limbs for humans is lower than 4. However, the overwhelming majority of humans have four limbs.
Boomer take.
That’s cool. I’m not a boomer.
Boomer response
A boomer take is, pick yourself by your bootstraps. I didn’t say anything close to that nor do I believe it. It takes a support system, even if it’s one person, to get out of a gutter.
Try something with a better argument than a low effort single sentence. You’re embarrassing yourself.
No, you basically said “stop eating avacado toast and make your coffee at home.”
Ok, boomer.
If you wanna be reductive and lack reading comprehension, sure.
lol, troll.
Again.
Go troll elsewhere.
This is a lie and you’ve been manipulated. I’ve seen poverty and watched people starve themselves skinny for savings. There are individual differences and if your differences make you useless to the economy (where you aren’t coerced into seperating from your money for your health) then that’s absolutely fantastic for you. But please don’t chime in to preach at people who are starving thanks.
Not everyone who is poor is starving. The vast majority aren’t.
“Come on, people, some of the poors are still fat!”
Your attitude is beyond despicable.
Words of someone who has never had a real relationship with someone financially struggling. I could explain the small accumulation of hardships such as medical, transport, food, rent, gas, electricity expenses and the psychological impact it has but idk if you are at the stage of life where you can swallow that properly.
I work with several people and have worked with many people that are financially struggling and they all have the same thing in common, which I’ve already outlined.
I’m not trying to say that you aren’t in a different boat but that doesn’t mean your experience is the same as all those who are poor either.
I hope you find the support you need to help you out of whatever situation you find yourself not able to get out of. We obviously aren’t going to have the same perspective.
You might not be starving while living paycheck to paycheck as nearly half of all Americans are currently, but make no mistake, you are poor.
I’ve been saving my cash for over a decade in hopes of buying a house someday, and it’s still not realistic for me to purchase one right now. The line just keeps getting further and further away. I’ve done everything “right” according to you, yet it’s still not getting me any closer to ownership.
We need government to step in and help us. This problem isn’t going to go away just by having everyone tighten their belts and save for a year or two. It’s going to require a massive legislative sweep to overhaul the system in favor of owner occupants and not investment hedge funds.
Those wealth building things are vehicles of exploitation. Someone has to be the neck getting stepped on as it stands
Everyone is able to be exploited no matter status.
Who’s exploiting Zuckerberg?
How does one budget their way out when the mortgage for a median priced house exceeds half your take-home pay for the month for a median household income?
Median home price in Sept: $412,000 Median household income 2022 (latest census data): $74,580 Today’s 30-year fixed rate mortgage rate est.: 7.30% Down payment assumption 10%.
So your monthly payment would be $3,121.60 while your monthly income before taxes is $6,215.
You’re spending well over half of your take-home pay after tax just on the mortgage payment for a typical household buying a typically priced house, which is not affordable even in this extremely generous example that ignores all other fees, insurance, and the fact that you’re on the hook to maintain that property.
Budget your way out of that?
Not trying to buy a small mansion as your starter home is a good place to start lol.
You do know what the median home is, right?
(Hint, the median priced vehicle, to compare to a similar market, is aprox a brand new off the lot sports car)
You are looking at the 50% mark, starter homes are in the bottom 20%, and it’s an exponential curve too.
This is just the “everyone is buying avocado toast” argument which is a rebranded “everyone is buying smartphones” argument. Budgeting isn’t going to turn your $30k yearly pay into a $30k down payment and $2,000 PITI payment