Narrative Violation: US Millenials Are Buying More Homes \ stacker news ~econ

Narrative Violation: US Millenials Are Buying More Homes

4473 sats \ 12 comments \ @kr 29 Jan econ

I was under the impression that US millennials were being priced out of the housing market and were struggling to keep up with rising real estate prices.

However, this chart from the US Census Bureau seems to show that Americans under 44 represent the fastest growing cohorts for home ownership.

I then went to look at overall home ownership rates, this chart from The Federal Reserve surprised me too.

Home ownership rates across all cohorts are higher now than basically anytime in the last 50 years (except the decade around the GFC housing bubble).

Maybe inflation hasn’t been as tough on people as I thought?

view all related items

1089 sats \ 0 replies \ @satoshiplanet 29 Jan

I am not aware of the situation in the US, as a european in my thirties I decided to buy instead of renting, here rents are as expensive as fixed mortgages, it is better to pay same amount month by month and own it after a few years, instead of paying more and more expensive monthly payments to never own it. Maybe it is a vague and simplistic reflection but I think it influences to some extent

727 sats \ 2 replies \ @brandonsbytes 29 Jan

A lot of millennials I know bought homes during the 2020-2022 boom cycle. Some a little before 2018-2020, and if they did then, they all refinanced during 2021-ish for the lower rates. This was all before inflation got really bad. And the inflation in the home price was offset by very low interest rates, which is the only reason they could afford the expensive homes. The monthly payment was low. Now they are all sitting with 300k+ in equity, but they are stuck because even if they took out their equity, their monthly payment for a new home at current rates with no decrease in home values makes it all unaffordable. The irony of having more money, but nothing you can do with it.

I'm on the other side of that coin, I have been saving and saving, and I never wanted to take the risk of stretching myself too thin by buying an expensive home. My salary has gone up a lot over the last 8 years, but it did not keep pace with the rate houses went up in price. So, now I have a lot of savings, a good job, high rent, and no chance of affording a home. The irony of having more money, but nothing you can do with it.

It's a great example of the problems in the fiat world.

21 sats \ 1 reply \ @kr OP 29 Jan

i hear you. practically speaking, how do we solve these problems?

0 sats \ 0 replies \ @brandonsbytes 29 Jan

inventory. which can be solved with deregulation on builders, and if we stop giving tax advantages for owning real estate. but, given that they will both upset different political constituents, is either of those realistic?

579 sats \ 4 replies \ @Undisciplined 29 Jan

Many narratives are driven by unrealistic expectations.

465 sats \ 3 replies \ @kr OP 29 Jan

any theories as to why young people are seeing their home ownership rates go up faster than all other cohorts?

are young people actually doing better economically than they were in 2016? are they just stretching their finances in a desperate attempt to own property?

783 sats \ 2 replies \ @Undisciplined 29 Jan

are they just stretching their finances in a desperate attempt to own property?

That's closest to what I've heard. Again, though, who knows how reliable that narrative is. What I've heard is that millennials are finally starting families and buying homes after delaying those things longer than prior generations.

That seems slightly at odds with ownership rates increasing over time for each age cohort. However, it could still be true that the average age of first home purchase is increasing along with the likelihood to ever buy a home.

I would also be willing to speculate that prolonged historically low interest rates led to an increased willingness to take on tons of debt.

465 sats \ 1 reply \ @kr OP 29 Jan

i just looked at canadian rates of home ownership for comparison, and it is telling a different story.

Canadians from 30-49 have lower home ownership rates than previous generations.

seems like it might be a US-centric phenomenon, maybe young Americans are actually doing better financially than they were in 2016 (and Canadians are doing worse)…

Full article: https://betterdwelling.com/canadian-homeownership-rate-is-falling-sharply-for-young-adults/

416 sats \ 0 replies \ @Undisciplined 29 Jan

Very interesting! It looks to me like Canadian Boomers were very good at funneling resources to themselves.

391 sats \ 1 reply \ @02bcd3eeb0 30 Jan

Are they buying houses or are they renting houses from the bank?

33 sats \ 0 replies \ @kr OP 30 Jan

time will tell 😬

0 sats \ 0 replies \ @TomK 30 Jan

This yield cycle could be short and trap a lot of youngsters as it might reverse soon and hard. It's always the same in Fiatlandia.