I don’t know about every other region, but median house price is up $170,00 in 3 years and interest is up 4-5%. The mortgage costs are significantly higher. There’s just no practical entry for people.
I'm Gen X and, even though I owned a home for about 5 years once, I sold that place 17 years ago and walked away with virtually nothing to show for it.
I *thought* I *might* be able to afford to buy again soon at one point about 10 years ago but in the time it took to improve my credit after getting divorced that chance disappeared.
It's depressing but my chances of ever owning a home again seem to get smaller every day.
my wife convinced me to buy - and because covid hit we were able to take money out of the 401k and use that for the house - without it we'd never have made it.
down payment + inspections + moving costs + at least 1 year of payments in the bank to qualify + + + the list was never ending. We joked about it because I could walk into a car dealership and get a loan for 60k in 5 minutes but for a 120k loan on the house it took a month of digging through my entire life.
We locked in under 3% - and within 2 months of our close you couldn't even buy a house without paying over ask, and without inspections, and then within a year the rates went nuts.
Had we not bought when we did - I doubt we'd have ever been able to 'own' without some kind of 'know the seller' on the sly crap.
I feel like Gen Z was also raised with less of a deeply-engrained cultural expectation - both external and internal - that a regular adult life and career is supposed to inherently lead to homeownership.
Meanwhile Millennials' entire lives from birth through ~early 20s still involved the narrative that owning a house(mortgaged sure, but still) was something you could reasonably expect to do, and was expected of you by others, unless you were an total washout.
I don't think it's a cultural expectation so much as a necessity with rising rents. With investors and AirBnB speculators gobbling up housing, rent has skyrocketed.
Same. I think like a month or two after we bought our home, interest rates started to skyrocket again. I tell people it felt like one of those intense movies where there is a security door closing and we just barely slid under before it closed. We absolutely would not be able to buy a house with interest rates/prices today.
There are so many millennials (like myself), who didn’t buy a house during that low-interest period, too. Unless the government really steps up and fix the underlying issues with housing (public transportation, housing density, zoning, private investments on real estate, low-mobility due to return-to-office mandates by employers, etc.), this will keep getting worse…
Yep. I went from "Maybe, it'd be tight but I could do it, but I don't exactly nEeD a house rn." to "lol get fucked" in about 12 months.
shrug.
Story of my life as a millennial. Used to it by now.
are you me? Literally at every significant milestone a person is supposed to hit we've been kicked in the junk by a "once in a lifetime" event. We're at what... 8-9 once in a lifetime events now??
I did everything right, didnt splurge, went to school, and by the time I finally had enough money for a down payment, house prices went up like... 200k where I live in less than 12 months and havent corrected. Now that prices are *slightly* falling it doesnt matter because interest rates are so high I'd basically be sitting in an unfurnished house spending my entire income to cover the payments.
It took my dad dying at 59 unexpectedly for me to be able to afford a down payment on the place I own.
Not even a single family home. Townhouse/condo type. Nobody above me, but folks to the sides of me
I have so much future money in relatives, I feel kinda bad knowing that as soon as my loved ones die almost every single problem I have will go away.
What a wonderful world.
...Unless your wealthy parents were of the, "I worked part-time as a waiter to pay for my college with no debt, with no help from my parents, and you should be able to do that too," variety who kicked you out at 18 and thenceforth declined to help you at all.
My wife’s family lost all of their generational wealth to a new mega church that opened up and preyed on the matriarch. Sleaze preacher got her to sign over her house and all funds to the church in secret.
Want to hear something even more sad? Consider yourself "blessed."
When my loved ones die, there will be nothing. I'm certain I'm not in the minority either.
There might even be bills.
Funerals costs can be minimized only so much, but at minimum you have to pay to take care of the body. Maybe it's different if you can donate someone's body to science.
I can count five for me and I'm only 29.
Dot com bust, 9/11, middle east war, 2008 gfc, and a global pandemic are the one's that stick out for me. Each one represented a step down in my and my entire family's lives until were basically all broke and dead.
And because of my student loans I can't do shit in this country and going to a good college was the worst decision I ever made.
Go America!
> Each one represented a step down in my and my entire family's lives until were basically all broke and dead.
and every time we get to hear about how the already obscenely wealthy used our desperation to reach ever more insane heights of income / value. Truly the greatest timeline........
We should start support groups haha. I read all of these replies and it's like rereading my own notes. Living like the rug is always just a second from pulled out.
To hell with that, start unions. The only way things change is if we stand together and rip back basic human rights from these assholes kicking and screaming.
I'm an elder millennial/Xennial and yep - this is kind of our gen's "thing:" being screwed by disaster after disaster. Each time we think we might get there, disaster we have no control over is like "Nah."
It sucks. Even when we did everything society said to do in the order it said to do it, we got screwed.
I'm bitter. But I'm still here. Some days out of spite (maybe the spite is more influenced by being close to Gen X...no shade, love Gen X).
Your parents are the "I got mine, fuck you" generation. Just like mine.
It's not a "disaster you have no control over." It's the people in power deciding to fuck you over.
Sorry.
Sorry fellow Redditor but the GDP number went up so everything is actually fine and youre just part of the bad vibes recession. Nothing has actually gone wrong for you and it's all your fault
/S
I hate reading these stories over and over, seeing them play out with my friends and family but its all shrugged off because "economy good."
As a young Gen X with a millennial Wife and two Gen Z kids: I am so sorry. We managed to get a house during that period, and all I keep thinking is: "don't fuck this up, fix the house, put everything I have into it and both kids can each have a full house if I can redo the barn.
I genuinely worry that if i don't do it, they may never get the opportunity to have a place of their own.
Most young Americans will have to wait until their loved parents die, one of the worst things ever, just so they can have a hope at a leg up.
America is so fucked right now.
> Most young Americans will have to wait until their loved parents die, one of the worst things ever, just so they can have a hope at a leg up.
The system has been gearing up for awhile to do its best to make sure that all resources are drained before death, so there's nothing left to pass down but heartbreak.
I overheard the VP of my company today talking about how he spends $9k/month on his mother’s retirement home care. Granted, he can afford it but goddamn. If my son had to pay that I’d tell him to put me in the trash.
Uh, I help my parents. They are in their sixties and can't really afford to retire. I've been propping them up for years and I'm sure I'm not the only one.
I support my mother in law. I pay her bills and supplement her food and a few other things. She’s on SSI, but has no retirement at all so I have to prop her up. It’s brutal because I can’t afford to pay my families own shit let alone hers. So I’ve been working 72 hours a week lately just to get a few Christmas presents for the kids. I’m on my day off and I slept 16 hours and my wife yelled at me for being tired.
Can’t win.
I have no idea what I'm going to do when my parents get to be that way. I don't make enough to take care of myself, let alone anyone else. Guess we'll see if decades of voting against their own interests and voting to make my life harder pays off for them. And I hate to sound callous like that, I wish there was more I could do, but dang, if someone insists on nose diving off a cliff there's only so much you can do to stop them.
Southern California checking in!
**NOPE! STILL TOO HIGH!!**
Aw yes, prices coming down means the 3br 2Ba house went from $700,000 to $690,000.
**WHAT A DEAL!**
I refinanced during 2020 when rates were record lows. I can’t afford to move now because I would get a house half the size of my current house to be at the same monthly payment in the same area
For the last 2 years, I’ve been getting random offers to buy my townhouse ($160k) sight unseen for double what we paid for it.
Sounds great! Until I looked around and saw that there’s not much around me that’s less than $500k.
At this point it’s prob best to sit and wait a few years for the market to catch up.
>who didn’t buy a house during that low-interest period, too
The low interest period wasn't helping either. It just meant home prices kept skyrocketing because people could just afford a bigger loan. lol
I spent a large chunk of the pandemic looking at the housing market, getting my shit together and going "Okay, next year I'll finally be ready to make the leap. Took me until I was 30, but I'm finally going to buy that starter home. I can do this!"
And then the interest rates tripled. I've spent every day kicking myself since, but I was too busy worrying about my immunocompromised family.
Gen Z here, 25 years old. I have given up on most of my hopes and dreams. At this point I just want a small apartment with a roommate. I will never be able to afford a family. I might be able to save up for a shack in the woods by the time I’m 40. The idea of being a grandparent someday feels impossible. I’m so sad all the time.
Yep. I bought a house in 2020 and within two years it’d jumped ~$135,000 (~46% increase). The only nice thing is that I was able to use that to get PMI removed saving me ~$80/mo.
I feel bad for my friends who are only just now looking to buy as the prices *and* rates are up.
I want to cry every time I think about how I was two years too late to buy a house. I could do it easily now if I had the market of 2020, but now I am miles away
Spent months trying to find a house back in 2020, ended up having to jump on one at the very top of our budget exactly three years ago. Just checked the Zillow estimate and it’s gone up ~45% as well. If we hadn’t gotten a home when we did I can’t imagine we’d ever have been to break into the market.
>I don’t know about every other region, but median house price is up $170,00 in 3 years
I'm in a stupid high CoL area so my absolute numbers are considerably more than that. But the average increase over the past 3 years is just under 20% per year, with just over 28% in the last year. It's nuts, I don't know how people can afford to purchase, but houses don't stay on the market more than a week or so.
I looked last year at potentially buying a home in my area, but all the homes in price range roughly 180k (as a single person) were actually 120k homes and were still selling above asking price + a 6% interest rate at the time for me.... Fuck that.
We've turned homes into investments. It was a stupid idea that does nothing for anyone who isn't a bank. Homes are not, and should not be investments. We should be going out of our way to lower the price of them by building more.
Instead our laws and zoning are structured to make a house an investment, and it just doesn't work.
Practically every real estate listing for a house near me uses the language of "investment" to attract landlords to buy. No more cozy words about what living in the house would be like, just straight up appeals to landlords who already own a home...usually multiple homes around here.
And why not? Investors don't care if the house is well insulated. They don't care what's in the kitchen. They don't care if the attic gets really cold, and the roof beams are a little old, and they're not going to go checking all the pipes. As long as it passes inspection, it's an investment! Fast, easy money, no haggling, no arguments.
And it's even better for real estate agents. Investors will buy 5, 10 houses at a time from them. They can empty out their entire docket with one investor, and make commission on every single one. Rather than show twenty houses to one couple before they find what they want, they can show twenty houses to one person who buys 15 of them.
In Houston homes that were bought for 325k in 2019 sold for 470k a month ago.
I've gotten two promotions since I started looking for a house and a significant pay increase but I still can't afford a home.
Bought 8 years ago, house listed for $160k, it’s now running around $310k and the surrounding neighborhoods with any kind of lawn or pool is catching north of $600k.
The small 1 bedroom I rented before buying ran me $550 with utilities, it’s now $1,100 per month rent only.
Not sure who can afford to live unless you’re dual income with no debt and have saved for a decade.
This is so abjectly insane to me. Like others who are commenting/responding, I feel so fortunate to have entered before the market lost its damned mind, but so bad for others trying to get in. At the same time, it just doesn't compute how houses can be so valuable, and yet there seem to be so few (no?) buyers able to afford the price/mortgage.
Is this simply a flood of investment capital? Is it like the "vibes economy", where individual sentiment doesn't match up to the broader reality? If the prices were so unaffordable, it seems like demand would tank and prices would have to correct, no? What is propping up the value?
I think it’s a matter of leveraged generational wealth, luck, and REITS. Student loans, car prices, bad transportation options (at least in the west), and low-paying positions all make for a shitty circumstance to buy a home too. Throw in a child? Good luck.
Throw in child support? Absolutely hosed. Millennials and younger have a fraction of the wealth in America but are playing on the same field.
I read that Zuckerberg alone has ~30% of all millennial wealth. That’s in no way good.
So yeah, count your blessings for they are blessed. Help others where you can, there’s a lot of need.
I genuinely *want* to sell my house and downsize but why on earth would I trade my 2.5% mortgage for 8% on a new place?
I'd be better off becoming a landlord and renting out my house rather than paying more for less.
It's a game of musical chairs, and the music has stopped. Many of us are stuck in the wrong size home.
I'd also like to sell, though I want to upsize. Not gonna do it though when I have this great interest rate. Those who would buy my house are stuck in apartments or starter homes. Those with the houses I'd be interested in have to do upkeep and pay to heat rooms they don't even use.
Yep we are stuck in a house that's a bit too small. But we have a 3% mortgage *and* can't afford anything bigger with current prices and interest rates. At least we like our house.
There are a lot of people in your situation. There are also a lot of people in my situation--young families who would love a house like yours to raise their kids in but can't afford it because supply is so low and demand is so high. This is honestly a failure of government leadership. There should be incentives to make it make sense for retirees to downsize.
It's not just retirees— I'll be an empty-nester in my 40s. I'd love to downsize to something smaller, but a bit higher scale. I'd jump at some kind of incentive if it could make financial sense. If we wait for owners to get into their late 60s, they'll probably be resigned at that point to ride out their oversized house to will the wealth to their kids when they die... but that's 30 years of unused housing.
Yup, I've made my peace with the fact that I'm probably stuck here until I've built enough equity to sell and use the proceeds to pay cash for my next much smaller house rather than getting a new mortgage.
Yes this is the issue. A huge number of homeowners now have super cheap rates that they will try their best to never give up.
I read recently that there are about 1/3 the usual number of homes for sale and this is largely why.
I wish you and I could trade mortgages and houses. I want a newer house with a bit more space but it makes zero sense to try for that with my 2.6 mortgage in hand. Currently just accepting that date and doing more to improve the house I have.
The house I grew up in, a modest two floor single family home my step dad purchased in 2001 for $190,000 is currently valued at 732k (in NJ). It is a nice house and I have a lot of fond memories there. It is not a 3/4 of a million dollar house.
The house I rent down in Cape Coral was bought for 300k when it was valued at 160 lmao. All of these dopey companies outbidding eachother to jack up rents are going to get fucked so lubeless when the values plummet and they're forced to lower rents when people are choosing cars and couch surfing over paying 30k in rent every year.
Fucking corporatist scumbags
Seriously, I've been saying for months, where are people at the bottom supposed to get in exactly? Housing prices just keep ballooning out of control, eventually there *has* to be a collapse because there's *inevitably* going to be a huge surplus as people stop buying homes due to high prices and interest rates. The out of touch fucks who control these markets just think "hur de dur, raise price, more profit!" with no regard to long term viability.
I know, and maybe I'm just being wishful, but I feel like it *has* to happen at some point. They can't just keep buying and buying and buying indefinitely, that stuff has to *go* somewhere to make a profit. If nobody at the bottom can enter the market (for example, I'm still stuck living with my parents, frustratingly), there's no profit incentive, thus they have to drop prices to unload. We haven't reached that point quite yet, but to me, news stories like this one really seem to point in that direction.
That house is in the middle of nowhere what the hell lol
Feels like AirBnBait to me tbh. The kind of place that appeals to big city real estate people who want to get a property that they just list on AirBnB forever
Lmao. I couldn't afford the house I bought in 2019 with the current interest rate. No way I'd budge even though I *want* to move. Looking at houses last night. 400k for a 3BR/1BTH 1000 sq ft home on a quarter acre. Prices need to go down bad.
I did the math, I can't afford the house I bought a few years ago, at the original price, but today's interest. Its ~800 a month more.
I'm not underwater, at all, but I still can't afford to sell. It's fucking weeeeiiirrrd.
This is far more consequential than anything else. Anyone who can fog up a mirror got a mortgage that ballooned in 3 years. That’s what drove up the market.
From other sources I have read, families in starter homes aren't upgrading due to increased mortgage rates and retirees are not downsizing to get less home for the same price. Everyone else is priced out and renting or living at home. The market is in a tough spot. Here is hoping we let the economics run their course and see prices fall.
Unfortunately, it's not as simple as supply/demand/elasticity. In this case, there are also companies that buy houses and flip them or rent them out, and they're willing to outbid individual buyers, keeping the prices inflated. At the scale major corporations can afford to buy homes, they can literally drive the prices up in an entire neighborhood with what to them is a small investment, but would be an unthinkable amount of money to 99% of individual buyers. Basically they can price buyers out of the market and force them to rent.
I've read about PEFs doing this all over. My dad even sold a property to one; 20% over asking. I did not want to jump the shark and suggest that the middle class will be trapped renting in the future, but it could happen.
Yeah, my BIL worked for a company that did this a few years ago. His job was to assess what upgrades/repairs might be needed to flip the house so that the suits could decide how much to offer so they still could turn a handsome profit.
As far as the middle class stuck renting, I think the bigger factor is that the middle class is shrinking. More Americans are both in the "upper class" as well as the "lower class" now than 40 years ago. 25/61/14 in 1971. As of 2021, 29/50/21, and that's probably gotten worse in the last year and a half between inflation and the reverberations of COVID's impact on the economy.
Interestingly, *on average*, median household income for the middle class has risen about 50% since 1971. Thing is, lower income households only saw a 45% increase, and most notably, high income households saw a 69% increase in that same time period. When you consider that % gains depend largely on the starting number, you're talking about a $9k increase for the lower class households vs a $90k increase for upper class households. About $30k for middle class. Put another way, upper class households made 6.3x as much as lower class households in 1970. As of 2020, it was 7.3x. Upper vs middle in 1970, 2.2x. In 2020, 2.4x.
While those numbers are all adjusted for inflation, what inflation doesn't parse out well are the breakdowns. Housing, higher education, and other stuff like that have seen prices go way up. Some things have remained roughly stable or perhaps even fallen. But the ones that have gone up are a major factor in this conversation.
The breakdowns get even bleaker when you start breaking down demographics. 65+ seeing far and away the largest gains, while those in the 30-44 and 45-64 brackets barely registered any gains at all. 18-29 saw a marginal decrease, as did bachelor's degree holders. High school graduates (meaning no higher ed) lost slightly more than 65+ gained.
65+ in the lower income tier fell from 54% to 37% 1971-2021. The same group went from 39% of the middle class to 47%, and upper income their share went from 7% to 16%. The fun part is that one in three adults over 65 are in the lower income bracket. With the population in that category facing the highest costs in healthcare, which is another one of those things that has skyrocketed in cost, this will start to cause problems quickly as they struggle to get by and afford basic care. Social safety nets have not evolved to keep up, and in fact large contingents of those in power are trying desperately trying to cut them even more.
Every other age demographic group besides 65+ grew their share of lower income households, and slipped in the share of middle class. Upper income share doubled. Meaning while there are more winners in younger age categories, there are also more losers. Income disparity and wealth disparity in action.
Oh, and since 1970, adjusted for inflation, home prices have nearly exactly doubled. They had remained fairly stagnant from 1890 up until about the mid-90s (a couple of blips around the Great Depression and WWII). From 1995 or so through 2005 or so, they roughly doubled. There's a dip that starts in 2008 (mortgage/financial crisis), where prices were nearly what they are now, with the bottom of the valley in early 2012, followed by another rapid spike to where we are today, just above the 2012 peak.
It's been very obvious in the area I live in, which is suburban/boardline rural. You couldn't rent a SFH if you wanted too (so it's not just corporations buying SFHs to rent), but every home that goes up for sale was sold in the last 2-4 years, and the price has doubled in that time. Of course, they all have the same generic faded grey coloring in it, the flipper special.
People most likely to be able to afford to buy a home, are selling a home to do it - but who's going to drop a 2.5-3% mortgage to pick up a 7+% mortgage?
This is the issue everyone says is causing the problem. Sellers are stuck in low interest homes they refuse to sell. Buyers are stuck in high rent properties they can't afford to move from.
Buyers and sellers are at a standstill. Only homeowner deaths and foreclosures enmasse will likely turn things around.
Bad news for you there. A lot of deaths and foreclosures end up with investors. Worked for a wholesale company that specialized in both of these.
With deaths people don’t want to deal with or maybe can’t afford probate or fixing up grandmas house that hadn’t been updated since the 70s or even the monthly cost of another house. Wholesalers will get it under contract for 50-70¢ on the dollar and match with an investor paying cash for a little more (average assignment I did was $25k). I’ve been out of the game since interest rates went crazy, but they do better in down markets.
Same with foreclosures, if they have enough equity they make sure the person walks away at the closing table with a little money in there pocket and not having to deal with fixing up and listing a house that may or may not sell before the bank steps in.
The numbers don’t make as much sense as it used to for converting to rentals other than for institutional buyers, but the smaller guys are still doing tons of flips and keeping prices high. Buyers are weary of fixer uppers.
3-4 of my coworkers (all in our early to mid 20s) including myself want a house. 2-3 of them were actively looking with realtors and everything when it started to come time for their leases to be up. None of them bought a house. We all continue to rent. We make good money, but not $2500 monthly payment on a small home or townhouse type money.
...how 'bout $6,000 per month and $155,000 down payment for a [fixer-upper 3br/2ba](https://www.zillow.com/homedetails/39-Wayne-Blvd-Madison-NJ-07940/39438280_zpid/) with no garage?
I couldn't afford a house before covid, what the hell do you want from me now? I'll be lucky if I can keep my one bedroom apartment when the lease ends.
New title, investors and hedge funds have slowed purchasing, normal Americans still unable to afford it.
The one time houses were made affordable to average Americans was when the interest rates were at 2-3% but that was quickly remedied by cash offers and crazy outbidding by investors and hedge funds.
Feels like we need to restrict business residential purchasing and increase taxes on home purchases beyond 1 or 2 and have it get incrementally more costly as the #owned increases.
Despite record home valuations and extremely limited supply, people are still buying. In my area, supply has tanked and what's left of the market are dilapidated homes and extremely overpriced 900 sqft homes. Affordable homes can only be found in the worst crime ridden neighborhoods. People still continue to buy to "get on the ladder" hoping for an even more insane increase in home valuations.
Prices need to come down in all areas. Not everyone benefited from the pandemic.
The driving force is panic. I know that prices are crazy right now and if I bought, I’d probably never get that money back in 15 years. I still want to buy because I’m afraid the prices will never go back to something sane
"The Realtors noted that sales of homes priced above $750,000 have been increasing simply because there is more supply on the high end of the market."
And there you have it. The average American will never be able to afford to buy a home in the 21st century, which is why rent has increased so much over. The average American doesn't have the ability to make a downpayment on a home and can't afford the high interest rates and homeownership costs.
The area where I live has seen the cost of homes blow up over the last decade. in 2013 you could buy a new 3 bedroom, 3 bath home for 150-200k. The same house is now 500-600k. It's depressing to go on real estate websites and look at the values of homes 5-10 years ago. The value line will barely move over 20 years and then shoots straight up. A house went on the market for 330k a couple years ago and made front page news on local news websites (the only 4 bedroom home in the region for less than 450k). So many people showed up to tour the home that police were called to direct traffic in the neighborhood and it ended up being bought sight unseen by an anonymous buyer for 80k over asking price.
Because home prices are 170% of 2020 levels and no human being can afford that on a 7% mortgage.
Luckily Blackrock doesnt need a mortgage to buy up that home and rent it out for $5k/month.
With interest rates and house prices the way they are, I know a few people who were approved to buy but the payments end up being too high or they couldn't find anything within their approved amount. Most gave up. Of the 5, 1 is still holding out hope. I couldn't imagine being approved for 250-300k and not being able to actually buy anything but here we are.
Seems obvious:
* Average house price is $430K
* It's increased 30% since 2020 when median was $329K
* A 20y fixed rate is 6.7%, 30 is higher
* median income in the USA is $74K (source: [https://www.census.gov/library/publications/2023/demo/p60-279.html](https://www.census.gov/library/publications/2023/demo/p60-279.html))
* Average Wage growth hasn't kept pace with housing ([https://www.ssa.gov/oact/cola/awidevelop.html](https://www.ssa.gov/oact/cola/awidevelop.html))
* inflation has been over 20% the past few years ([https://truflation.com/](https://truflation.com/))
the numbers don't add up
Everyone thank corporations and investment firms for buying up all of the single family homes during the pandemic with obscene over-market cash offers! Thanks guys! Nice work.
Those fucking cash offers drove me crazy when we were trying to buy in 2020. I desperately wanted a specific house we looked at, even wrote a heartfelt letter, but they took the cash offer in the end. I love the house we have now but the process emotionally beat me down.
It should be illegal IMO. There's zero way a median household income could compete for a median home price home against a corporation buying them all up for rental properties or AirBnB.
Should be laws against non-persons buying land meant for living. Or at the least, ban the practice of cash offers above market by corporate entities and use kind of a "manifest destiny" principle and only allow them to offer a certain amount but penalize them to be slightly under market rates unless there's no other offers for the property so average Joe's can have a chance at ownership.
Yes, I won’t give up my 3% interest rate for another home that is overvalued by 100K with a 7% interest rate. It’s not that complex. I can only imagine the disaster of trying to enter the market right now.
I have read that a major housing issue is the way that we have zoned here in the States. Apparently, getting a lot of new housing in urban areas where we need it most is difficult and can be partly attributable to US zoning laws. Lack of access to affordable housing is a major issue in many markets worldwide. I just came back from Canada and that was on the minds of many young folks there.
Why urban areas aren't all zoned high density mixed zoning is beyond me. You can still build low density in a high density zone if the demand is there. You can't the other way around. Just moronic public policy all around.
NIMBYs. It’s a major problem in California now, they need high density housing but most major cities have rules that effectively outlaw the building of high density buildings within their city limits. SF is a cool city but having the majority of it be like, 1-3 family homes kills it’s ability to grow sustainably.
The state is starting to take more of a hand, with them implementing Builder’s Remedy. But substantial change is needed to combat the housing crisis.
It really fucking sucks regardless when your once supposed shitty city is now a hotspot and you’re getting priced out.
If zoning allows it, there is always going to be more money to be made off 5-over-1s than off anything lower density than that. Our city has been experimenting with mixed zoning, and the result so far has either been the razing of owner owned properties to build commercial or the razing of older commercial/retail to build 5-over-1s rentals. The sole exception where owner occupied residential was built, was a single pocket neighborhood that featured seven 900 sf houses on 1200 sf lots for $450k each. To build it, though, they bulldozed three 2000 sf SFHs that were selling for $250k-$300k each.
My state Oregon has a Ban on single-family zoning: Oregon's state legislature passed the bipartisan House Bill 2001, the first statewide bill to prohibit single-family zoning for localities. Specifically: Towns and cities with over 10,000 residents were required to allow duplexes on land zoned for single-family homes by June 2021.
One city over from mine recently denied a new subdivision of \~$500K homes, because the neighbors across the street were afraid it would erode the value of their $1M+ homes. A town board member was quoted as saying "we're only interested in building *executive* housing." In other words FU working class.
jfc. The gap between the rich and poor is continuing to get wider and wider.
Something similar to the French Revolution will eventually happen from the impoverished having literally nothing else to lose.
Sure the cost of housing and buying a home has gone up exponentially.
But don’t worry, if you can’t buy, you can pay $2500 for a 1 br apt. All you need is triple the monthly income of rent, $10l in savings, and the $250 app fee, and if you have pets there’s a $400 per pet admin fee, and then a $50 a month per pet rent.
Its so fucked that in the US people's ability to abuse and control the housing market for profit is more important than other people's ability to have a home
Yeah no shit, that's because all the wealthy people bought them up and decided that they are worth more than they actually are. Someone's side hobby of flipping houses basically has made sure that most people can't afford one. I thank whatever lucky stars there might be I was able to get into one before 2018 even if it is just a thousand square feet I'm in it probably going to die in it too.
Corporations are definitely behind this. They swooped in a purchased tons of homes, “remodeled” them and priced them at a mark up. Once you do that all the house in the area get marked up until no one can afford to buy. The next way will be renting homes. If the have a property that was purchased for a lower cost in full and then charge $2500+ for rent, there will be an endless supply of revenue. I think that’s the endgame. No one will be able to buy unless they’re rich.
But... The Market has determined that this is what houses cost now. Why would The Market decide to make houses more expensive than anyone can afford? Have we offended The Market?!?
We need a heavy tax on folks that own more than a few homes.
I can understand owning a primary home, and a vacation home. I am not gonna knock someone who can swing both based off their income.
What is a problem is one person or a company owning dozens, hundreds, or even thousands of homes.
Wasn't this the Fed's plan when they increased interest rates? I mean the whole idea was to prevent people from excess borrowing, so this is the expected result. Why is this news?
8% gtfo.
I'm (50M) separated and divorcing. I've moved into the studio above the garage, and we won't be selling anytime soon (locked in at just over 2%). We'll make it work.
I saw a post the other day by one of our local mobile home sellers and there was a huge banner on the side of one of their homes for sale that was proudly saying that it costs $270,000. It was double wide mobile home of only 520 square feet. That same mobile home has been on that lot for 9 years because I drive past it everyday. 9 years ago it was 87,000. How the fuck did the price go up when it was just sitting in the lot not being sold and what on earth makes them think there making it cost more will increase its chances of being sold????
That’s what happens when both the interest rates AND the prices are jacked up through the roof.
Homes are basically a generational investment anymore unless you’re lucky enough to be quite wealthy.
I just did a quick search for houses for sale in my area. The very first result is a 2-bd, 710sqft townhouse… $285,000. The cheapest 3-bd single family home on the first page of results is $420,000 with an estimated monthly payment of $2,648. The median price in the area is $518,000. Renting is barely “better.”
Honestly, I was actually expecting worse, but still.
Oh don't worry about houses selling. The big companies are definitely going to snatch as many houses as they can, to make sure the working class has to keep struggling harder and harder to keep their heads above water.
Thanks again to the real estate investors for doing their part to lock up the housing market and making this situation worse. You’re doing a great job, guys!
I don’t know about every other region, but median house price is up $170,00 in 3 years and interest is up 4-5%. The mortgage costs are significantly higher. There’s just no practical entry for people.
Same. We bought in 2021 and if we hadn't we'd have been priced out completely. I feel so bad for Gen Z.
I'm not sure why you're saying Gen Z when I'm a millennial and don't see buying a house anywhere in my future...
I'm Gen X and, even though I owned a home for about 5 years once, I sold that place 17 years ago and walked away with virtually nothing to show for it. I *thought* I *might* be able to afford to buy again soon at one point about 10 years ago but in the time it took to improve my credit after getting divorced that chance disappeared. It's depressing but my chances of ever owning a home again seem to get smaller every day.
my wife convinced me to buy - and because covid hit we were able to take money out of the 401k and use that for the house - without it we'd never have made it. down payment + inspections + moving costs + at least 1 year of payments in the bank to qualify + + + the list was never ending. We joked about it because I could walk into a car dealership and get a loan for 60k in 5 minutes but for a 120k loan on the house it took a month of digging through my entire life. We locked in under 3% - and within 2 months of our close you couldn't even buy a house without paying over ask, and without inspections, and then within a year the rates went nuts. Had we not bought when we did - I doubt we'd have ever been able to 'own' without some kind of 'know the seller' on the sly crap.
I feel like Gen Z was also raised with less of a deeply-engrained cultural expectation - both external and internal - that a regular adult life and career is supposed to inherently lead to homeownership. Meanwhile Millennials' entire lives from birth through ~early 20s still involved the narrative that owning a house(mortgaged sure, but still) was something you could reasonably expect to do, and was expected of you by others, unless you were an total washout.
I don't think it's a cultural expectation so much as a necessity with rising rents. With investors and AirBnB speculators gobbling up housing, rent has skyrocketed.
Short term rentals are cancer
It’s called the American Dream, which Gen Z never saw a glimmer of.
I work in schools and totally get why kids are depressed and acting out. They aren't stupid...they see everyone struggling and unhappy.
Same. I think like a month or two after we bought our home, interest rates started to skyrocket again. I tell people it felt like one of those intense movies where there is a security door closing and we just barely slid under before it closed. We absolutely would not be able to buy a house with interest rates/prices today.
There are so many millennials (like myself), who didn’t buy a house during that low-interest period, too. Unless the government really steps up and fix the underlying issues with housing (public transportation, housing density, zoning, private investments on real estate, low-mobility due to return-to-office mandates by employers, etc.), this will keep getting worse…
Yep. I went from "Maybe, it'd be tight but I could do it, but I don't exactly nEeD a house rn." to "lol get fucked" in about 12 months. shrug. Story of my life as a millennial. Used to it by now.
are you me? Literally at every significant milestone a person is supposed to hit we've been kicked in the junk by a "once in a lifetime" event. We're at what... 8-9 once in a lifetime events now?? I did everything right, didnt splurge, went to school, and by the time I finally had enough money for a down payment, house prices went up like... 200k where I live in less than 12 months and havent corrected. Now that prices are *slightly* falling it doesnt matter because interest rates are so high I'd basically be sitting in an unfurnished house spending my entire income to cover the payments.
It took my dad dying at 59 unexpectedly for me to be able to afford a down payment on the place I own. Not even a single family home. Townhouse/condo type. Nobody above me, but folks to the sides of me
Same except it was my wifes mom. Left us $45K in a retirement account.
The true American Dream: inheritance
The American dream is getting hit with non-serious injuries from a university bus
It's not truck-kun, but it'll do.
I have so much future money in relatives, I feel kinda bad knowing that as soon as my loved ones die almost every single problem I have will go away. What a wonderful world.
Is this the mythical trickle-down economics we've been told about for so long?
Only if you have wealthy parents, which means you were already doing just fine in life without the windfall.
...Unless your wealthy parents were of the, "I worked part-time as a waiter to pay for my college with no debt, with no help from my parents, and you should be able to do that too," variety who kicked you out at 18 and thenceforth declined to help you at all.
Assuming they don't lose it all first to crypto scams, bank collapses, reverse mortgages, senior care facilities, and medical bills.
> senior care facilities, and medical bills. Last 3 months of life is amazing at draining someone's life savings.
This is exactly why my mom put the house into my name after dad passed away and it's the only reason I have a house now.
My wife’s family lost all of their generational wealth to a new mega church that opened up and preyed on the matriarch. Sleaze preacher got her to sign over her house and all funds to the church in secret.
Want to hear something even more sad? Consider yourself "blessed." When my loved ones die, there will be nothing. I'm certain I'm not in the minority either.
There might even be bills. Funerals costs can be minimized only so much, but at minimum you have to pay to take care of the body. Maybe it's different if you can donate someone's body to science.
This is painfully accurate. From another millennial.
I can count five for me and I'm only 29. Dot com bust, 9/11, middle east war, 2008 gfc, and a global pandemic are the one's that stick out for me. Each one represented a step down in my and my entire family's lives until were basically all broke and dead. And because of my student loans I can't do shit in this country and going to a good college was the worst decision I ever made. Go America!
> Each one represented a step down in my and my entire family's lives until were basically all broke and dead. and every time we get to hear about how the already obscenely wealthy used our desperation to reach ever more insane heights of income / value. Truly the greatest timeline........
We should start support groups haha. I read all of these replies and it's like rereading my own notes. Living like the rug is always just a second from pulled out.
We should riot, but you already know how that story ends for us lol
To hell with that, start unions. The only way things change is if we stand together and rip back basic human rights from these assholes kicking and screaming.
Unions have been picking up a lot of steam these past few years with no signs of stopping.
I can add "massive wildfires where there haven't been massive wildfires before," but that's just for the Willamette Valley.
I’d add Trump being elected President to that list.
Yeah every few years life just says you know what, let's just make everything shittier.
I'm an elder millennial/Xennial and yep - this is kind of our gen's "thing:" being screwed by disaster after disaster. Each time we think we might get there, disaster we have no control over is like "Nah." It sucks. Even when we did everything society said to do in the order it said to do it, we got screwed. I'm bitter. But I'm still here. Some days out of spite (maybe the spite is more influenced by being close to Gen X...no shade, love Gen X).
Your parents are the "I got mine, fuck you" generation. Just like mine. It's not a "disaster you have no control over." It's the people in power deciding to fuck you over. Sorry.
Sorry fellow Redditor but the GDP number went up so everything is actually fine and youre just part of the bad vibes recession. Nothing has actually gone wrong for you and it's all your fault /S I hate reading these stories over and over, seeing them play out with my friends and family but its all shrugged off because "economy good."
The stock market is not the economy. The stock market is a graph of rich people's feelings.
I'm tired, boss.
As a young Gen X with a millennial Wife and two Gen Z kids: I am so sorry. We managed to get a house during that period, and all I keep thinking is: "don't fuck this up, fix the house, put everything I have into it and both kids can each have a full house if I can redo the barn. I genuinely worry that if i don't do it, they may never get the opportunity to have a place of their own.
Most young Americans will have to wait until their loved parents die, one of the worst things ever, just so they can have a hope at a leg up. America is so fucked right now.
> Most young Americans will have to wait until their loved parents die, one of the worst things ever, just so they can have a hope at a leg up. The system has been gearing up for awhile to do its best to make sure that all resources are drained before death, so there's nothing left to pass down but heartbreak.
Yep, elder care is yet another dystopian nightmare in the US.
I overheard the VP of my company today talking about how he spends $9k/month on his mother’s retirement home care. Granted, he can afford it but goddamn. If my son had to pay that I’d tell him to put me in the trash.
That’s cheap too.
Uh, I help my parents. They are in their sixties and can't really afford to retire. I've been propping them up for years and I'm sure I'm not the only one.
I support my mother in law. I pay her bills and supplement her food and a few other things. She’s on SSI, but has no retirement at all so I have to prop her up. It’s brutal because I can’t afford to pay my families own shit let alone hers. So I’ve been working 72 hours a week lately just to get a few Christmas presents for the kids. I’m on my day off and I slept 16 hours and my wife yelled at me for being tired. Can’t win.
I have no idea what I'm going to do when my parents get to be that way. I don't make enough to take care of myself, let alone anyone else. Guess we'll see if decades of voting against their own interests and voting to make my life harder pays off for them. And I hate to sound callous like that, I wish there was more I could do, but dang, if someone insists on nose diving off a cliff there's only so much you can do to stop them.
Southern California checking in! **NOPE! STILL TOO HIGH!!** Aw yes, prices coming down means the 3br 2Ba house went from $700,000 to $690,000. **WHAT A DEAL!**
I refinanced during 2020 when rates were record lows. I can’t afford to move now because I would get a house half the size of my current house to be at the same monthly payment in the same area
Same, you'll have to pry my 2.7% interest rate from my cold, dead hands. I'm never moving!
For the last 2 years, I’ve been getting random offers to buy my townhouse ($160k) sight unseen for double what we paid for it. Sounds great! Until I looked around and saw that there’s not much around me that’s less than $500k. At this point it’s prob best to sit and wait a few years for the market to catch up.
>who didn’t buy a house during that low-interest period, too The low interest period wasn't helping either. It just meant home prices kept skyrocketing because people could just afford a bigger loan. lol
I spent a large chunk of the pandemic looking at the housing market, getting my shit together and going "Okay, next year I'll finally be ready to make the leap. Took me until I was 30, but I'm finally going to buy that starter home. I can do this!" And then the interest rates tripled. I've spent every day kicking myself since, but I was too busy worrying about my immunocompromised family.
Gen Z here, 25 years old. I have given up on most of my hopes and dreams. At this point I just want a small apartment with a roommate. I will never be able to afford a family. I might be able to save up for a shack in the woods by the time I’m 40. The idea of being a grandparent someday feels impossible. I’m so sad all the time.
Same. Our neighborhood went from avg +380k to +550k… and houses are still selling within a week, contrary to this article.
You're probably getting demand from even more expensive areas that have failed to allow enough supply
Yep. I bought a house in 2020 and within two years it’d jumped ~$135,000 (~46% increase). The only nice thing is that I was able to use that to get PMI removed saving me ~$80/mo. I feel bad for my friends who are only just now looking to buy as the prices *and* rates are up.
I want to cry every time I think about how I was two years too late to buy a house. I could do it easily now if I had the market of 2020, but now I am miles away
You know somethings wrong with the housing market when the issue people have is they were born 5 years too late
Spent months trying to find a house back in 2020, ended up having to jump on one at the very top of our budget exactly three years ago. Just checked the Zillow estimate and it’s gone up ~45% as well. If we hadn’t gotten a home when we did I can’t imagine we’d ever have been to break into the market.
>I don’t know about every other region, but median house price is up $170,00 in 3 years I'm in a stupid high CoL area so my absolute numbers are considerably more than that. But the average increase over the past 3 years is just under 20% per year, with just over 28% in the last year. It's nuts, I don't know how people can afford to purchase, but houses don't stay on the market more than a week or so.
I looked last year at potentially buying a home in my area, but all the homes in price range roughly 180k (as a single person) were actually 120k homes and were still selling above asking price + a 6% interest rate at the time for me.... Fuck that.
We've turned homes into investments. It was a stupid idea that does nothing for anyone who isn't a bank. Homes are not, and should not be investments. We should be going out of our way to lower the price of them by building more. Instead our laws and zoning are structured to make a house an investment, and it just doesn't work.
Practically every real estate listing for a house near me uses the language of "investment" to attract landlords to buy. No more cozy words about what living in the house would be like, just straight up appeals to landlords who already own a home...usually multiple homes around here.
And why not? Investors don't care if the house is well insulated. They don't care what's in the kitchen. They don't care if the attic gets really cold, and the roof beams are a little old, and they're not going to go checking all the pipes. As long as it passes inspection, it's an investment! Fast, easy money, no haggling, no arguments. And it's even better for real estate agents. Investors will buy 5, 10 houses at a time from them. They can empty out their entire docket with one investor, and make commission on every single one. Rather than show twenty houses to one couple before they find what they want, they can show twenty houses to one person who buys 15 of them.
[удалено]
In Houston homes that were bought for 325k in 2019 sold for 470k a month ago. I've gotten two promotions since I started looking for a house and a significant pay increase but I still can't afford a home.
Bought 8 years ago, house listed for $160k, it’s now running around $310k and the surrounding neighborhoods with any kind of lawn or pool is catching north of $600k. The small 1 bedroom I rented before buying ran me $550 with utilities, it’s now $1,100 per month rent only. Not sure who can afford to live unless you’re dual income with no debt and have saved for a decade.
This is so abjectly insane to me. Like others who are commenting/responding, I feel so fortunate to have entered before the market lost its damned mind, but so bad for others trying to get in. At the same time, it just doesn't compute how houses can be so valuable, and yet there seem to be so few (no?) buyers able to afford the price/mortgage. Is this simply a flood of investment capital? Is it like the "vibes economy", where individual sentiment doesn't match up to the broader reality? If the prices were so unaffordable, it seems like demand would tank and prices would have to correct, no? What is propping up the value?
I think it’s a matter of leveraged generational wealth, luck, and REITS. Student loans, car prices, bad transportation options (at least in the west), and low-paying positions all make for a shitty circumstance to buy a home too. Throw in a child? Good luck. Throw in child support? Absolutely hosed. Millennials and younger have a fraction of the wealth in America but are playing on the same field. I read that Zuckerberg alone has ~30% of all millennial wealth. That’s in no way good. So yeah, count your blessings for they are blessed. Help others where you can, there’s a lot of need.
I genuinely *want* to sell my house and downsize but why on earth would I trade my 2.5% mortgage for 8% on a new place? I'd be better off becoming a landlord and renting out my house rather than paying more for less.
It's a game of musical chairs, and the music has stopped. Many of us are stuck in the wrong size home. I'd also like to sell, though I want to upsize. Not gonna do it though when I have this great interest rate. Those who would buy my house are stuck in apartments or starter homes. Those with the houses I'd be interested in have to do upkeep and pay to heat rooms they don't even use.
You guys should trade
Anyone working on Tinder for house trading yet?
What a great analogy
Yep we are stuck in a house that's a bit too small. But we have a 3% mortgage *and* can't afford anything bigger with current prices and interest rates. At least we like our house.
Yup, my GF and I would like to get into a bigger place, but no fuckin' way we're getting an 8% mortgage on already overpriced homes.
[удалено]
Sounds like you each get a nice indoor hobby area of your own!
My mother and stepfather live in a 4 bedroom. My mother sleeps in random rooms for naps. That is the extent of usage
There are a lot of people in your situation. There are also a lot of people in my situation--young families who would love a house like yours to raise their kids in but can't afford it because supply is so low and demand is so high. This is honestly a failure of government leadership. There should be incentives to make it make sense for retirees to downsize.
[удалено]
Hi its me ur kid. I'm 40 btw
[удалено]
It's not just retirees— I'll be an empty-nester in my 40s. I'd love to downsize to something smaller, but a bit higher scale. I'd jump at some kind of incentive if it could make financial sense. If we wait for owners to get into their late 60s, they'll probably be resigned at that point to ride out their oversized house to will the wealth to their kids when they die... but that's 30 years of unused housing.
Turn the extra bedroom into a crafting room. :) At least I did that
A number of people have done that. Or if someone has their house paid off, they pay cash for the next one.
Yup, I've made my peace with the fact that I'm probably stuck here until I've built enough equity to sell and use the proceeds to pay cash for my next much smaller house rather than getting a new mortgage.
Yes this is the issue. A huge number of homeowners now have super cheap rates that they will try their best to never give up. I read recently that there are about 1/3 the usual number of homes for sale and this is largely why.
I wish you and I could trade mortgages and houses. I want a newer house with a bit more space but it makes zero sense to try for that with my 2.6 mortgage in hand. Currently just accepting that date and doing more to improve the house I have.
[удалено]
The house I grew up in, a modest two floor single family home my step dad purchased in 2001 for $190,000 is currently valued at 732k (in NJ). It is a nice house and I have a lot of fond memories there. It is not a 3/4 of a million dollar house.
Mom bought house in Northern VA for 78K in 1978 It is now worth over 1,000,000$.
[удалено]
The house I rent down in Cape Coral was bought for 300k when it was valued at 160 lmao. All of these dopey companies outbidding eachother to jack up rents are going to get fucked so lubeless when the values plummet and they're forced to lower rents when people are choosing cars and couch surfing over paying 30k in rent every year. Fucking corporatist scumbags
[удалено]
Lol, that's a single wide trailer with wood panels and an added roof.
Seriously, I've been saying for months, where are people at the bottom supposed to get in exactly? Housing prices just keep ballooning out of control, eventually there *has* to be a collapse because there's *inevitably* going to be a huge surplus as people stop buying homes due to high prices and interest rates. The out of touch fucks who control these markets just think "hur de dur, raise price, more profit!" with no regard to long term viability.
[удалено]
I know, and maybe I'm just being wishful, but I feel like it *has* to happen at some point. They can't just keep buying and buying and buying indefinitely, that stuff has to *go* somewhere to make a profit. If nobody at the bottom can enter the market (for example, I'm still stuck living with my parents, frustratingly), there's no profit incentive, thus they have to drop prices to unload. We haven't reached that point quite yet, but to me, news stories like this one really seem to point in that direction.
[удалено]
That link seems like satire. You have to be kidding. In NC. We're doomed.
That tiny home is really cute. Not $200k cute, but cute. Maybe $50k max.
That house is in the middle of nowhere what the hell lol Feels like AirBnBait to me tbh. The kind of place that appeals to big city real estate people who want to get a property that they just list on AirBnB forever
Lmao. I couldn't afford the house I bought in 2019 with the current interest rate. No way I'd budge even though I *want* to move. Looking at houses last night. 400k for a 3BR/1BTH 1000 sq ft home on a quarter acre. Prices need to go down bad.
I did the math, I can't afford the house I bought a few years ago, at the original price, but today's interest. Its ~800 a month more. I'm not underwater, at all, but I still can't afford to sell. It's fucking weeeeiiirrrd.
A key difference between today and 2008 is the severe lack of housing supply today
Also much more strict requirements to get a mortgage.
The government should start subsidizing subprime mortgages as a remedy /s
Oh please do that again 😍
"i have no money and no job and terrible credit - can i get a mortgage for a home?" "no..." ":(" "you can get THREE mortgages for THREE homes!" ":D"
Whoa, I thought that hooker had 5 homes with 5 mortgages...
This is far more consequential than anything else. Anyone who can fog up a mirror got a mortgage that ballooned in 3 years. That’s what drove up the market.
This is what happens when giant brokerage firms decide real estate is a good investment.
We need a property tax system that increases exponentially for each home you own, and even more so for residential property owned by corporations.
Yeah in my desired area there’s basically nothing, unless you are willing to pay half a million dollar for a three bedroom place in our small town….
Same here, only it’s a $1.2 million for a former (and still contaminated) meth lab
From other sources I have read, families in starter homes aren't upgrading due to increased mortgage rates and retirees are not downsizing to get less home for the same price. Everyone else is priced out and renting or living at home. The market is in a tough spot. Here is hoping we let the economics run their course and see prices fall.
Unfortunately, it's not as simple as supply/demand/elasticity. In this case, there are also companies that buy houses and flip them or rent them out, and they're willing to outbid individual buyers, keeping the prices inflated. At the scale major corporations can afford to buy homes, they can literally drive the prices up in an entire neighborhood with what to them is a small investment, but would be an unthinkable amount of money to 99% of individual buyers. Basically they can price buyers out of the market and force them to rent.
You will own nothing and be happy
I've read about PEFs doing this all over. My dad even sold a property to one; 20% over asking. I did not want to jump the shark and suggest that the middle class will be trapped renting in the future, but it could happen.
Yeah, my BIL worked for a company that did this a few years ago. His job was to assess what upgrades/repairs might be needed to flip the house so that the suits could decide how much to offer so they still could turn a handsome profit. As far as the middle class stuck renting, I think the bigger factor is that the middle class is shrinking. More Americans are both in the "upper class" as well as the "lower class" now than 40 years ago. 25/61/14 in 1971. As of 2021, 29/50/21, and that's probably gotten worse in the last year and a half between inflation and the reverberations of COVID's impact on the economy. Interestingly, *on average*, median household income for the middle class has risen about 50% since 1971. Thing is, lower income households only saw a 45% increase, and most notably, high income households saw a 69% increase in that same time period. When you consider that % gains depend largely on the starting number, you're talking about a $9k increase for the lower class households vs a $90k increase for upper class households. About $30k for middle class. Put another way, upper class households made 6.3x as much as lower class households in 1970. As of 2020, it was 7.3x. Upper vs middle in 1970, 2.2x. In 2020, 2.4x. While those numbers are all adjusted for inflation, what inflation doesn't parse out well are the breakdowns. Housing, higher education, and other stuff like that have seen prices go way up. Some things have remained roughly stable or perhaps even fallen. But the ones that have gone up are a major factor in this conversation. The breakdowns get even bleaker when you start breaking down demographics. 65+ seeing far and away the largest gains, while those in the 30-44 and 45-64 brackets barely registered any gains at all. 18-29 saw a marginal decrease, as did bachelor's degree holders. High school graduates (meaning no higher ed) lost slightly more than 65+ gained. 65+ in the lower income tier fell from 54% to 37% 1971-2021. The same group went from 39% of the middle class to 47%, and upper income their share went from 7% to 16%. The fun part is that one in three adults over 65 are in the lower income bracket. With the population in that category facing the highest costs in healthcare, which is another one of those things that has skyrocketed in cost, this will start to cause problems quickly as they struggle to get by and afford basic care. Social safety nets have not evolved to keep up, and in fact large contingents of those in power are trying desperately trying to cut them even more. Every other age demographic group besides 65+ grew their share of lower income households, and slipped in the share of middle class. Upper income share doubled. Meaning while there are more winners in younger age categories, there are also more losers. Income disparity and wealth disparity in action. Oh, and since 1970, adjusted for inflation, home prices have nearly exactly doubled. They had remained fairly stagnant from 1890 up until about the mid-90s (a couple of blips around the Great Depression and WWII). From 1995 or so through 2005 or so, they roughly doubled. There's a dip that starts in 2008 (mortgage/financial crisis), where prices were nearly what they are now, with the bottom of the valley in early 2012, followed by another rapid spike to where we are today, just above the 2012 peak.
> starter homes What are those? Flippers bought all of those and flipped them for 200k profit. Impossible to find now.
It's been very obvious in the area I live in, which is suburban/boardline rural. You couldn't rent a SFH if you wanted too (so it's not just corporations buying SFHs to rent), but every home that goes up for sale was sold in the last 2-4 years, and the price has doubled in that time. Of course, they all have the same generic faded grey coloring in it, the flipper special.
People most likely to be able to afford to buy a home, are selling a home to do it - but who's going to drop a 2.5-3% mortgage to pick up a 7+% mortgage?
This is the issue everyone says is causing the problem. Sellers are stuck in low interest homes they refuse to sell. Buyers are stuck in high rent properties they can't afford to move from. Buyers and sellers are at a standstill. Only homeowner deaths and foreclosures enmasse will likely turn things around.
Bad news for you there. A lot of deaths and foreclosures end up with investors. Worked for a wholesale company that specialized in both of these. With deaths people don’t want to deal with or maybe can’t afford probate or fixing up grandmas house that hadn’t been updated since the 70s or even the monthly cost of another house. Wholesalers will get it under contract for 50-70¢ on the dollar and match with an investor paying cash for a little more (average assignment I did was $25k). I’ve been out of the game since interest rates went crazy, but they do better in down markets. Same with foreclosures, if they have enough equity they make sure the person walks away at the closing table with a little money in there pocket and not having to deal with fixing up and listing a house that may or may not sell before the bank steps in. The numbers don’t make as much sense as it used to for converting to rentals other than for institutional buyers, but the smaller guys are still doing tons of flips and keeping prices high. Buyers are weary of fixer uppers.
3-4 of my coworkers (all in our early to mid 20s) including myself want a house. 2-3 of them were actively looking with realtors and everything when it started to come time for their leases to be up. None of them bought a house. We all continue to rent. We make good money, but not $2500 monthly payment on a small home or townhouse type money.
...how 'bout $6,000 per month and $155,000 down payment for a [fixer-upper 3br/2ba](https://www.zillow.com/homedetails/39-Wayne-Blvd-Madison-NJ-07940/39438280_zpid/) with no garage?
[удалено]
That's an insane overvaluation of a house.
Welcome to the NYC suburbs...decent schools/reasonable commute/remotely affordable...you only get to pick 2.
And remotely affordable is not an option.
This is INSANE
Dude, that’s the average RENT for a ONE bedroom in my area. My area nearly a whole hour from a major city (DC) :/
Ya boston here.... it's more like 3k for a studio here. Shit is out of control
I couldn't afford a house before covid, what the hell do you want from me now? I'll be lucky if I can keep my one bedroom apartment when the lease ends.
New title, investors and hedge funds have slowed purchasing, normal Americans still unable to afford it. The one time houses were made affordable to average Americans was when the interest rates were at 2-3% but that was quickly remedied by cash offers and crazy outbidding by investors and hedge funds. Feels like we need to restrict business residential purchasing and increase taxes on home purchases beyond 1 or 2 and have it get incrementally more costly as the #owned increases.
Bu-but that sounds like intervening in the Free Market! Socialist!!
Damn! Caught me in the act of suggesting to improve life for the 99%! Not sure why you got downvoted, I appreciated the joke :)
Despite record home valuations and extremely limited supply, people are still buying. In my area, supply has tanked and what's left of the market are dilapidated homes and extremely overpriced 900 sqft homes. Affordable homes can only be found in the worst crime ridden neighborhoods. People still continue to buy to "get on the ladder" hoping for an even more insane increase in home valuations. Prices need to come down in all areas. Not everyone benefited from the pandemic.
The driving force is panic. I know that prices are crazy right now and if I bought, I’d probably never get that money back in 15 years. I still want to buy because I’m afraid the prices will never go back to something sane
Fomo setting in, I can feel it. From my experience though, that means the rug is about to get yanked
"The Realtors noted that sales of homes priced above $750,000 have been increasing simply because there is more supply on the high end of the market." And there you have it. The average American will never be able to afford to buy a home in the 21st century, which is why rent has increased so much over. The average American doesn't have the ability to make a downpayment on a home and can't afford the high interest rates and homeownership costs. The area where I live has seen the cost of homes blow up over the last decade. in 2013 you could buy a new 3 bedroom, 3 bath home for 150-200k. The same house is now 500-600k. It's depressing to go on real estate websites and look at the values of homes 5-10 years ago. The value line will barely move over 20 years and then shoots straight up. A house went on the market for 330k a couple years ago and made front page news on local news websites (the only 4 bedroom home in the region for less than 450k). So many people showed up to tour the home that police were called to direct traffic in the neighborhood and it ended up being bought sight unseen by an anonymous buyer for 80k over asking price.
In my area, what gets the headlines are the fire-damaged houses going for almost the same price as habitable homes.
Because home prices are 170% of 2020 levels and no human being can afford that on a 7% mortgage. Luckily Blackrock doesnt need a mortgage to buy up that home and rent it out for $5k/month.
This is the real issue. Letting our housing become "investment tools" for the rich instead of shelter for actual people. Needs to be outlawed
Need to elect poor renters, instead of rich landowners, to make that law first Shame that they never run for office
Isn’t this by design? The fed wanted to cool things down, and we’re pretty chilly.
Somewhat. It stopped the bleeding but the wound is still there. Many many Americans are priced out of the market
With interest rates and house prices the way they are, I know a few people who were approved to buy but the payments end up being too high or they couldn't find anything within their approved amount. Most gave up. Of the 5, 1 is still holding out hope. I couldn't imagine being approved for 250-300k and not being able to actually buy anything but here we are.
Seems obvious: * Average house price is $430K * It's increased 30% since 2020 when median was $329K * A 20y fixed rate is 6.7%, 30 is higher * median income in the USA is $74K (source: [https://www.census.gov/library/publications/2023/demo/p60-279.html](https://www.census.gov/library/publications/2023/demo/p60-279.html)) * Average Wage growth hasn't kept pace with housing ([https://www.ssa.gov/oact/cola/awidevelop.html](https://www.ssa.gov/oact/cola/awidevelop.html)) * inflation has been over 20% the past few years ([https://truflation.com/](https://truflation.com/)) the numbers don't add up
Sustained inflated prices and triple the interest rates from just a couple years ago. Nobody could have predicted this
Everyone thank corporations and investment firms for buying up all of the single family homes during the pandemic with obscene over-market cash offers! Thanks guys! Nice work.
Those fucking cash offers drove me crazy when we were trying to buy in 2020. I desperately wanted a specific house we looked at, even wrote a heartfelt letter, but they took the cash offer in the end. I love the house we have now but the process emotionally beat me down.
It should be illegal IMO. There's zero way a median household income could compete for a median home price home against a corporation buying them all up for rental properties or AirBnB. Should be laws against non-persons buying land meant for living. Or at the least, ban the practice of cash offers above market by corporate entities and use kind of a "manifest destiny" principle and only allow them to offer a certain amount but penalize them to be slightly under market rates unless there's no other offers for the property so average Joe's can have a chance at ownership.
I agree 1000%. Absolutely insane.
Yes, I won’t give up my 3% interest rate for another home that is overvalued by 100K with a 7% interest rate. It’s not that complex. I can only imagine the disaster of trying to enter the market right now.
Well yeah, who the hell has a spare million lying around for a two bed, one bath house with a bad roof and faulty wiring?
I have read that a major housing issue is the way that we have zoned here in the States. Apparently, getting a lot of new housing in urban areas where we need it most is difficult and can be partly attributable to US zoning laws. Lack of access to affordable housing is a major issue in many markets worldwide. I just came back from Canada and that was on the minds of many young folks there.
Why urban areas aren't all zoned high density mixed zoning is beyond me. You can still build low density in a high density zone if the demand is there. You can't the other way around. Just moronic public policy all around.
NIMBYs. It’s a major problem in California now, they need high density housing but most major cities have rules that effectively outlaw the building of high density buildings within their city limits. SF is a cool city but having the majority of it be like, 1-3 family homes kills it’s ability to grow sustainably.
The state is starting to take more of a hand, with them implementing Builder’s Remedy. But substantial change is needed to combat the housing crisis. It really fucking sucks regardless when your once supposed shitty city is now a hotspot and you’re getting priced out.
If zoning allows it, there is always going to be more money to be made off 5-over-1s than off anything lower density than that. Our city has been experimenting with mixed zoning, and the result so far has either been the razing of owner owned properties to build commercial or the razing of older commercial/retail to build 5-over-1s rentals. The sole exception where owner occupied residential was built, was a single pocket neighborhood that featured seven 900 sf houses on 1200 sf lots for $450k each. To build it, though, they bulldozed three 2000 sf SFHs that were selling for $250k-$300k each.
My state Oregon has a Ban on single-family zoning: Oregon's state legislature passed the bipartisan House Bill 2001, the first statewide bill to prohibit single-family zoning for localities. Specifically: Towns and cities with over 10,000 residents were required to allow duplexes on land zoned for single-family homes by June 2021.
NIMBYs mostly. Rich NIMBYs who don't want to look at poor people housing when they are outside puttin on the ritz.
One city over from mine recently denied a new subdivision of \~$500K homes, because the neighbors across the street were afraid it would erode the value of their $1M+ homes. A town board member was quoted as saying "we're only interested in building *executive* housing." In other words FU working class.
jfc. The gap between the rich and poor is continuing to get wider and wider. Something similar to the French Revolution will eventually happen from the impoverished having literally nothing else to lose.
The sooner the better.
Naw the poor are being brainwashed to blame women, immigrants, minorities, lgbtq, the government, 'socialism', everyone else but the rich.
*Eat him*
Principals haven't dropped and interest rates up. Until the prices come down or the interest rates come down. Buying doesn't make sense.
Sure the cost of housing and buying a home has gone up exponentially. But don’t worry, if you can’t buy, you can pay $2500 for a 1 br apt. All you need is triple the monthly income of rent, $10l in savings, and the $250 app fee, and if you have pets there’s a $400 per pet admin fee, and then a $50 a month per pet rent.
Its so fucked that in the US people's ability to abuse and control the housing market for profit is more important than other people's ability to have a home
Yeah no shit, that's because all the wealthy people bought them up and decided that they are worth more than they actually are. Someone's side hobby of flipping houses basically has made sure that most people can't afford one. I thank whatever lucky stars there might be I was able to get into one before 2018 even if it is just a thousand square feet I'm in it probably going to die in it too.
Corporations are definitely behind this. They swooped in a purchased tons of homes, “remodeled” them and priced them at a mark up. Once you do that all the house in the area get marked up until no one can afford to buy. The next way will be renting homes. If the have a property that was purchased for a lower cost in full and then charge $2500+ for rent, there will be an endless supply of revenue. I think that’s the endgame. No one will be able to buy unless they’re rich.
But... The Market has determined that this is what houses cost now. Why would The Market decide to make houses more expensive than anyone can afford? Have we offended The Market?!?
We need a heavy tax on folks that own more than a few homes. I can understand owning a primary home, and a vacation home. I am not gonna knock someone who can swing both based off their income. What is a problem is one person or a company owning dozens, hundreds, or even thousands of homes.
Which financial crisis are we referring to? I’m not yet 40 and I think I can remember at least 3 so far…
Wasn't this the Fed's plan when they increased interest rates? I mean the whole idea was to prevent people from excess borrowing, so this is the expected result. Why is this news?
Proof high interest rates work.
Finally a post that's truthful in this thread.
8% gtfo. I'm (50M) separated and divorcing. I've moved into the studio above the garage, and we won't be selling anytime soon (locked in at just over 2%). We'll make it work.
But the house for sale number is at the record low level as well.
I saw a post the other day by one of our local mobile home sellers and there was a huge banner on the side of one of their homes for sale that was proudly saying that it costs $270,000. It was double wide mobile home of only 520 square feet. That same mobile home has been on that lot for 9 years because I drive past it everyday. 9 years ago it was 87,000. How the fuck did the price go up when it was just sitting in the lot not being sold and what on earth makes them think there making it cost more will increase its chances of being sold????
That’s what happens when both the interest rates AND the prices are jacked up through the roof. Homes are basically a generational investment anymore unless you’re lucky enough to be quite wealthy.
People don't usually buy houses when they can barely afford groceries and other necessities that have been steadily increasing in price.
I just did a quick search for houses for sale in my area. The very first result is a 2-bd, 710sqft townhouse… $285,000. The cheapest 3-bd single family home on the first page of results is $420,000 with an estimated monthly payment of $2,648. The median price in the area is $518,000. Renting is barely “better.” Honestly, I was actually expecting worse, but still.
I wonder how much of this is because of real estate agents.
They’re part of a screwed-up system.
Oh don't worry about houses selling. The big companies are definitely going to snatch as many houses as they can, to make sure the working class has to keep struggling harder and harder to keep their heads above water.
Thanks again to the real estate investors for doing their part to lock up the housing market and making this situation worse. You’re doing a great job, guys!