Comment by JumpCrisscross
2 days ago
> don't see it accounting for real estate costs outpacing wages, requiring younger cohorts to devote arguably unreasonable amounts of their current cashflows to housing
"Millennials are now wealthier than previous generations were at their age" [1] on the back of home-price appreciation [2].
[1] https://www.wsj.com/personal-finance/millennials-personal-fi...
[2] https://www.stlouisfed.org/on-the-economy/2024/feb/millennia...
https://www.theguardian.com/us-news/2023/aug/17/millennial-h...
> By age 30, just 42% of millennials owned homes, compared to 48% of gen Xers and 51% of baby boomers, an analysis of government data by Apartment List found. This gap persists into their early 40s, with the oldest millennials still having a lower rate of ownership than previous generations when they were that age. ...
> But turbulent times may be ahead for millennials. Experts say that the window of improved affordability may have already closed.
> “They bought houses and they are active in the market,” said Lautz of the NAR, “just not at the rate that we should be seeing for this age category.” Housing affordability has declined steadily in 2023, according to the NAR, as has inventory, from 1.9m homes in June 2019 to 1m today. And this year, boomers are once again the largest group of homebuyers, often competing with millennials looking to buy their first home.
> The personal savings rate is now 4.3% compared to an unusually high rate of 33.8% in April 2020. And Experian expects student loan payments – on pause during the pandemic – to resume in October at more than $200 a month on average.
> Matt Kinghorn, a senior demographer at the Indiana Business Research Center at Indiana University, said the increase in home ownership among young adults over the last few years “could potentially be short-lived, driven by those really low mortgage interest rates and a surge in personal savings during the first year of the pandemic”.
https://www.pewresearch.org/short-reads/2024/10/25/a-look-at...
> One commonly used (though also criticized) benchmark for housing affordability is that no more than 30% of household income should go toward housing costs. Households that spend more than that are considered “cost burdened” by the U.S. Department of Housing and Urban Development.
> By that standard, 31.3% of American households were cost burdened in 2023, including 27.1% of households with a mortgage and 49.7% of households that rent, according to 1-year estimates from the Census Bureau’s American Community Survey (ACS). (Many more people own than rent: In the second quarter of 2024, 65.6% of occupied housing units were owned while 34.4% were rented, according to the most recent estimates from the Census Bureau’s Current Population Survey/Housing Vacancy Survey.)
It’s crazy that half of renters in this country are cost-burdened.