1y ago

An affordability crisis is making some young Americans give up on ever owning a home

www.cnn.com

An affordability crisis is making some young Americans give up on ever owning a home | CNN Business

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.

100 comments

I did the math and it would take me roughly 90 years to pay off a 2 bedroom fixer-upper.
Surprise twist, said fixer-upper is the place I rent currently.
Double surprise twist, I pay more in rent then the mortgage for this place, but don't qualify to buy my own.
I'm stuck in the renters purgatory.
There are more twists still, but those are too personal.
- You're paying for someone else's house.
  
  LaNdLoRdS pRoViDe A sErViCe ThOuGh!
- 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 did the math and it would take me roughly 90 years to pay off a 2 bedroom fixer-upper.
  Where?
- Explain how the rent is more than a mortgage if it would take you 90 years to pay it off
  
  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 would take me roughly 90 years to pay off a 2 bedroom fixer-upper.
  I live in a 1,200 sqft 2-bedroom house and it cost me $60k at the height of the market. It's not even a fixer-upper.
  You just think you're entitled to live in places you can't afford.
  
  That's awesome. Mine is a 1,400 sqft 2-bedroom valued at $1.2M. My landlord hasn't raised rent in 7 years so I'm paying under market. (Don't tell them)
  Our city has a real big problem over here with homelessness. Downsizing isn't the solution it used to be when single/studios are roughly equal or more expensive than 70yo homes.
  
  That's just about everywhere nowadays buddy.
  I've been looking and looking to leave, but I don't have the proper education to get a WFH job so I have to live where the jobs are, and places as cheap as yours aren't where the jobs are...
Brit here. I’m 43, earning more than I ever have and have basically no hope of ever owning a home.
- 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.
  [^1]: Not amusing at all, really.
  
  I thought about this recently and realized -
  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.
  
  That's odd, i bought a house in 2001, sold it in 2005, went kinda transient for 15 years, here there and everywhere, and bought another house 2 years ago. This is probably because i didn't give up in the early 2000s.
- 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.
  
  Correction: Parts of Canada. It's a big country with a lot of places in between Vancouver and the GTA.
- Same. 40 yo, nearing the top of my industry in salary, and every time I look at the housing market, it doubles.
- 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.
- And if you do, the market is just gonna crash and you’ll be stuck with that inflated mortgage and unable to move physically or financially.
Homeownership is dead, it's time to build community land trusts instead
- Have 4.7 acres of commercial property how could I turn that into affordable housing?
  
  Talk to a real estate lawyer
  
  if it's zoned for commercial use you cant easily convert it into residential use, nor can it be done cheaply. not worth the time and effort.
Look into Habitat for Humanity. Pick up the phone, call and inquire. Just do it.
Attend the first meeting where they give a general outline of the program and put in your application.
5 of the 13 homes on my block were built by Habitat, and none of us would have got a mortgage without them.
Be glad to answer general questions, but the program rules vary by area.
- 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.
lol No shit CNN. What story is next, Water is wet, or maybe, Don’t stare at the sun?
- Um.... It's perfectly fine to look at the sun with your naked eye. Ask our last president.
- 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.
Honestly I gave up a long time ago
BuT tHe EcOnOMy iS GrEaT rIgHt NoW, EvEN FOx NeWS HaD To AGrEe.
- That's how you know they are conspiring.
Wait, I heard this one before.....
Just gonna skip the sunset years myself and am gonna retire on a .38
And the majority of those who haven't given up yet are simply delusional.
Some? Lol
I'm considered young again! \o/
High time we break out the guillotines.
Look into Habitat for Humanity. Pick up the phone, call and inquire. Just do it.
Attend the first meeting where they give a general outline of the program and put in your application.
5 of the 13 homes on my block were built by Habitat, and none of us would have got a mortgage without them.
Be glad to answer general questions, but the program rules vary by area.
In Canada, the average person working full time makes about $37k a year. The average house price in Canada is something like ~$900k. We're all super fucked.
Is there any hope that it might get better in a few years, like downswings & upswings kind of a thing?
- Nope. If you don't already own a house you very likely never will.
  
  W-w-well, I n-n-never wanted one a-a-anyway!
  
  I dunno man, i have a feeling we're in for a Depression level event, the bottom might fall out of the market.
Some?
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’ve gave up. Now it’s just racing the clock to make sure I get something for my kids to live in. Even if it’s a bit of a commute.
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 sell your house before the mortgage is paid off. The longest I've ever lived anywhere is ten years and I've owned three houses.
Accelerated climate change is a real thing... We're ALL FUCKED anyways so your house or houses you own don't mean shit you're gonna perish like the rest
Synonyms for capitalism:
commercialism industrialism mercantilism competition democracy individualism free enterprise private enterprise private ownership free market laissez-faire privatized industries laissez faire economics private sector free-enterprise economy free-enterprise system free economy capitalistic system economic sector self-regulating market
- Not really, but go off queen?
  
  I wish I were wrong.
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.
- What are you saying right now lol
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.

100 comments