Definitely agree with this sentiment! Houses are affordable only in low cost of living areas where folks don’t want to live for a reason. Some of those reasons are subjective (not a lot to do in Ohio), and some are very objective (certain rural areas are extremely hostile to other groups of people).<p>In major cities where people want to live (slash where well paying jobs are), it is very difficult to justify ownership. For example, a $600k house at 7% interest will loose money over 5 years even if you sell for $650k. And not just loose money, but loose even more money than renting for like $4k/mo. (And this accounts for a $100k down payment!)<p>There is basically no way to justify ownership in these areas financially without coming into a significant amount of capital. And while you could afford it with a high cashflow (two high income earners, which is doable in major cities), you can get a nice apartment for $4k/mo that might have even more amenities than your house would have (like a hot tub).<p>I think this is a huge bummer, especially because owning an apartment or condo is becoming more rare as well, since renting is more financially attractive to property owners. This basically makes it much more difficult to build wealth, and allows large developers to make off with a huge amount of money.<p>So it does feel kind of hopeless in these large cities, even if you make a ton of money. You basically either have to accept taking a huge loss on ownership (unless you stay there for decades or get a great deal), or settle for renting.
65.8% of Americans live in their own home. That's a higher percentage than the UK, France, or Germany. We aren't talking about there not being homes, it's that the youngest aren't able to. It's also a higher percentage of ownership than the US in 1940,1950,1960,1970, not 1980, but also higher than 1990.<p>What it isn't higher than is the peaks of home ownerships hit during the low the low interest rate booms before the recessions of the '80s and 2000's.<p>I don't think the current housing crunch will be forever - we've seen shortages like this several times before in US history. While some cities are fighting new housing furiously, other's aren't. Over time, the population migration to the places that are building will continue as it has over the last decade. Building houses is a boom and bust phenomena, and I've seen nothing to say that it's never coming back.
I'm an early-90's "millennial" in one of the ten biggest cities in the United States and am unfortunately in a position where I couldn't even afford to <i>move</i>.<p>It's not so much "the economy's" fault as it is my [yearslong] attachment to a company where there's been <i>no</i> wage growth (hopefully I'm out by September!).<p>Altogether very much not what I ever thought "30"+ would look like for me.
I moved out to the rural countryside, paid $120k for my house. Work remote, and meet my collogues 5-6 times a year in person.<p>It's not for everyone, but I'm happy. Not being a slave to the bank (mortgage) feels incredible.
A few years ago the local university did a study and found that 30% of my town could not afford to live in this town. Last year it was 75%.
There are not jobs locally which can support the housing cost. Huge influx of people who seem to be purchasing multiple homes. 600 registered vacation rentals just in city limits (estimated closer to 1500 counting unregistered). Entire neighborhoods that only have 1 or 2 full time residents.<p>My rent went up 20% last year (5 years in the same location) with no improvements made. My parent's house had their tax assessment go up 65% (they are retired, same house for 40+ years).<p>I know of several companies that all just shut down due to someone purchasing the building where many small shops were operating from and doubled the rent.<p>It is a shame being able to watch the destruction of the town I grew up in...even worse to know that I won't be able to live here much longer.
Granted it is a vacation destination now...but when I was a kid it was the middle of nowhere where nobody wanted to live, downstream from a superfund site.<p>Building more houses won't help if they are all used as investment. More developments need to have rules about the housing being used as primary housing, no rentals (short or long term), no flipping the house after 2 years. Focused on people who want to live and build a community long term.<p>Turning all the affordable housing into hotels while turning vacant hotels into homeless shelters is an insane proposition...but it is currently the reality many cities are facing (see Spokane, WA as example of this exact thing).
Previously the problem was that you had to have access to credit and enough money for a down payment to buy and then you’d quickly come out ahead vs renting. So it was a real problem not being able to get access to that advantage.<p>But in the current situation you actually pay more to buy than you would to rent in most/very many cases, unless you’re counting on things like appreciation or planning to hold for 20+ years (if you are rent controlled/stabilized you may never come out ahead).<p>So while homeownership is unaffordable in both situations, the repercussions and solutions are very different. Because policies like providing downpayments (which CA is considering/doing) will just exacerbate the situation in this case. And the negative impact is more qualitative like being established in a community or wanting to own a home as a right of passage, vs actually materially making you better off.
So 66% say homeownership is hopeless and 59% say they are focused on the goal of owning…a car? Yes, if you’re currently unable to own a car, I can see why home ownership would appear hopeless.<p>I’m sorry, but I just don’t have the empathy. I see the horrible financial decisions, and advice, all around me. I suppose this means the bulk of the 59% are financing their vehicles? If you have nothing to your name except debts, and want to change that, you should drive a POS. If you would like to own a home, but currently rent and have $40k in car debt, you’re not doing it right. I make quadruple what many of my friends and family make, and most of them have nicer vehicles and a driveway full of toys, like campers and motorcycles and boats. I went from making $65k in the Midwest to owning a million dollar home in Seattle in about 6-7 years and paying off all student debt, on a single income, while having multiple kids. I didn’t do anything crazy, I just saved more than I spent, invested in index funds, and never took on debt.
I don’t even understand why owning a home is something so many people want.<p>It’s generally not a good “investment” at all and renting is better.<p>Plus all the upkeep and chores you need to do for a house.
here's a poser for you: if you live at your mom's house, but earn a good salary, that allows you to quickly build up a nest egg, that you can use as a downpayment on your first house.<p>You buy the house with a mortgage, tying up your downpayment and obligating you to make monthly payments on the mortgage (which in the initial period go mostly to covering interest)<p>Before moving in, you realize that you could keep living at mom's house and rent the house you bought out at market rates. Let's say the market rate for your house is $5K a month, money that you can put toward your mortgage or building back up your savings/nest egg. (if you are renting your house out, some other benefits accrue to you, depreciating it, etc, but we'll ignore those, keeping that in mind in case you start thinking it also has some costs associated with it)<p>Now you have the thought... hey, wait a minute, does this mean that if you move into your own house, that act will cut off the $5K per month rental income, which makes it the equivalent of you having to pay the $5K rent yourself? Cuz, you could keep the rental income flowing if you rented another property, but if that one costs $5K too, the cash flow nets out to zero.<p>Could this be true? owning your own house doesn't save you on rent? Because investing in a house entitles you to the rent from the house, so consuming the housing yourself costs you the monthly rent whether or not you are the owner?<p>Yes, that's what it means. Buying a house does not save you money on rent, does not save you money on "housing consumption".<p>We need to give our kids a better financial education, there are so many myths that keep people on hamster wheels they don't know that they are on. This is the reason that housing seems "unaffordable"; why should it be any more affordable than rent?
In the future, only investment firms will own homes and everybody will be renting their whole life. At the end of their lives, they will have no inheritance to pass on to their children.<p>You will own nothing.
“Whether you think you can, or you think you can't – you're right."<p>Henry Ford's words ring true. Sure, there are some that can't afford to buy-- always have been-- but many can.