After only a few months, Chris Swanson is sick of shopping for houses in what the 39-year-old calls a “dumpster fire” of a market for first-time buyers like himself.
Though he has a steady job and has paid off his student loans, it feels like he’s two decades too late: He missed out on rock-bottom interest rates, and homes are far more expensive. Landing on the one property that will fit his needs and his budget is daunting enough, but there’s also pressure to move fast. “I’m in that weird position,” said Swanson, a marketing professional from Mentor, Ohio.
Homeownership — the main driver of wealth for most Americans — is out of reach for large swaths of the population. But the pinch is most pronounced for millennials, who are buying homes at a slower pace than those before them. Baby boomers, in fact, represented the largest share of home buyers this year — a spot millennials had held since 2014 — according to research by the National Association of Realtors.
“Boomers are absolutely in the driver’s seat,” said Jessica Lautz, deputy chief economist at NAR, because they have built up home equity and can pay in cash. “Unfortunately, that has pushed many millennials to the sidelines.”
Those born between 1981 to 1996 have been called the “unluckiest generation.” Since entering the workforce, they’ve experienced the slowest economic growth of any age group. They’ve also been weighed down by student debt and child-care costs, Lautz said.
Rising interest rates and persistently high asking prices have further eroded their buying power. The median U.S. home sold for $416,100 in the second quarter of 2023, a 26 percent jump since early 2020, Federal Reserve data show. Median sales prices were significantly higher in the Northeast ($789,600) and the West ($547,900).
Meanwhile, the average 30-year, fixed-rate mortgage is now hovering near 7 percent, nearly three times the 2.6 percent recorded in early 2021.
As a result, first-time home buyers are older, with a median age of 36, Lautz said. That’s the oldest since NAR started keeping track in 1981, when it was 29. As the age climbed, she noted, the share of first-time home buyers sank to “historic lows.”
The high interest rates are “a real burden on young people who don’t have the high salaries of old folks like me,” said Joe Gyourko, 67, a professor of real estate at the University of Pennsylvania Wharton School. “You can’t get around it, and you’ve got to make a decision: Do I value the house enough?”
Corporations should not own single family housing. There is zero reason housing should continue to increase like it does.
Go onto Zillow. Look how much the house was originally built for, throw that into an inflation calculator and be shocked at how we’re being ripped off.
And now on top of being ripped off, interest rates are ridiculous.
There is not a shortage of housing, corporations are buying them up and either sitting on them or renting them out at high rates.
The same corporations buying up housing are buying up apartment complexes. I know in my area many of them are at less than 20% full and they’re still charging $1500 a month for a 1 bedroom. They’re artificially driving up prices putting a stranglehold on the economy.
If Americans didn’t have to throw most of their paycheck towards housing (or education or healthcare) the whole country would be in much better shape. Inflation wouldn’t hit as hard, we could put more money into savings and actually retire, extra money for travel or things that make us happy.
It seems like such a simple solution, maybe I’m wrong but something needs to change.
Not just corporations.
There is no reason for a large private rental market to exist. You don’t even have to ban private landlords, just make them compete with the most cost-effective provider: the state. Governments can borrow cheaper than any landlord and rent out indefinitely, turning a surplus (aka profit) at a fraction of private rents.
I’ve been watching a lot of not just bikes and YouTubers like that.
The suburbs aren’t event sustainable. They only exist because the government funds a shit load of money into them to make them work. They weren’t sustainable at the start and they aren’t now. Now the money is drying up it’s a fucked up asset to have in a city because you still need to fund them