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Yep. A lot of 20-somethings right now. It's a large generation. As they get jobs and work for a few years and approach 30, they're buying houses. Problem is the ages behind them are really small. Unless we get people through immigration, good luck finding home buyers in 10 years.
Yeah, as I have posted in other threads, the average millennial in their late 20s, early 30s is making less money now than people of that age did in the 70s.
The problem is solved by building a lot more than we are right now and every builder is stretched thin right now. Lumber costs and labor shortage are other factors driving up the prices of all homes.
Living and spending habits are established through a myriad of things--parenting, social media, cultural changes and phenomenon, levels of debt--nobody is debating that. When it comes to a "market" for anything (houses, collectibles..etc)-the two factors that matter most are supply and demand. The supply is primarily dictated by the things that you have mentioned---and the demand is generally dictated by the reactions/actions/habits of the people towards the product being evaluated. Rental prices are rising rapidly--to the point that in many areas--the cost for a month of rent could actually be more than the cost of a potential mortgage payment. Some (possibly a majority of it) is certainly because of the dynamics involving the housing side--the stuff that you've mentioned in detail. However--look at the title of the thread--it says "why has the housing market gotten so bad recently". Many of the responses focused predominately on just the housing/supply side of the equation. My only point is that this is an incomplete picture and that some of it has to do with the current lifestyle/spending habits of the public (and millenials are a part of this group). Nothing that I said contradicted any claim that you had made. In any case--it's an interesting topic and an interesting discussion.
You beat me to posting about the FHA loan info. A lot of people could be better served with an education on these financial matters (similar to the personal finance thread where we talk about how many people don't know how 401k's work or even how to balance a checkbook.) I just got done talking with a young couple this past weekend who thought they were going to have to save 20% for a down payment. They'd never heard of an FHA loan, a first time home buyer program, or the many other ways you can get into your first house without having to scrape by and save for 10 plus years.
There are a lot of 20 something millenials but also the median age for a millenial is 30 so there are a ton of us in our 30s. I am a millenial and am closer to 40 than 30.
Yes, definitely other factors. I just went the easy route because I don't want to take the time and effort to put all those data together. If you have a link with everything, that would be cool to see.
Wasn’t trying to alter your point. Just posting it for reference. Not everything is a battle here.
For me it is.Wasn’t trying to alter your point. Just posting it for reference. Not everything is a battle here.
That is an interesting study. I'm just moving from a townhome 6 minute walk from a stop to a single-family house a 6 minute walk from a train stop. Probably would be a good time to lose one of these cars (my wife will still drive because of her sensitivity to sunlight), but both are paid off with only around 40k miles.
All good points. To further your point of emphasis, which is valid as I better understand it, there's a reason many millennials (and boomers) choose to rent - some due to economic realities including those acutely felt by millennials, and others are lifestyle...
Sit tight, we have first of 4 kids starting college next year. We've done well saving for college and she will likely get some $ from the schools she has looked at. Our goal is to get the kids through school with minimal debt so they can get a good start. If all goes according to plan we won't have to dip into our equity but we'll see I guess.
The joy of a (somewhat) free market is that those regions that have and will embrace more investment in well designed and planned infrastructure that ties into land use and then mobility services are thriving and will likely do so into the future - adapting to, adopting and evolving as new technologies such as automated transit comes to fruition.
It’s a multi-faceted issue. They might be buying now—but I don’t remember where I read it—but the average millennial rents for 10-12 years before they get into home ownership. So yes—you could see some waves of them purchasing homes as they get to their mid-late 30’s—but this is generally after an active decade or so of being renters. I’m not contradicting you—just adding to your premise that while they maybe buying—a ton of them are renting and most have massively supported the rental market for a decade. They’ve effectivley strengthened both sides.
Dipping into your home equity to pay for your kids' college? Is that what you're saying you might have to do (but obviously hope you don't)?Sit tight, we have first of 4 kids starting college next year. We've done well saving for college and she will likely get some $ from the schools she has looked at. Our goal is to get the kids through school with minimal debt so they can get a good start. If all goes according to plan we won't have to dip into our equity but we'll see I guess.
It depends on a bunch of different factors but it's an option we may have to consider. Obviously not something we want to do and currently looks like we wont need to but things change over time.
A couple of viable strategies: 1) Rent out current house and use the equity to buy the next place. 2) Stay in current house, use equity to buy rentals to supplement your income. 3) Sell and move to a lower cost of living area... etc. etc. All these options are extremely prevalent right now with people that have built up a lot of equity through rising prices. But if anyone reads this post and starts thinking about option 1 or option 2, make sure to do your homework first. Educate yourself, read up, make sure your financial house is in order first, crunch the numbers, and then don't borrow and buy unless the numbers make sense.
And cash offers. The problem is everywhere. Two years ago, we had record low levels of inventory and now we have 36 percent less than that.
If a college grad with a decent job and lived at home for five years, it wouldn't be hard for them to save up $200k+. I'm guessing there's a good market of those types of buyers
There are also "shadow houses" on the market that just get whispered out, basically a "make me an offer" on zillow that change hands before stuff even hit the market.
Average salary for first job after earning a bachelor's is about $50,000. If we assume a 10% raise each year in career advancements, that totals about $300,000 over five years. Take into account taxes, hopefully retirement savings, and other living expenses and I think saving up $200,000 is stretch. If my grown, fully employed, college graduate is living in my house, then I'm charging rent. Even as little as $500/month is going to cost them $30,000 over those five years. Sure, maybe the most frugal of people can do it, especially if parents aren't going to charge rent, but very few people would come close to that much savings in five years right out of college.
This complexes are everywhere north of Boston . Prices like $2000-2200 for a studio add $500 per bedroom . Crazy
People do tend to marry. I mean you can go 2x on those figures. But, 200k at age 30 to just drop on a house is a huge stretch.
That's fair. I was using a higher starting salary assumption. $50k is quite conservative in CA given how many tech jobs are here.
Sit on our hands until we are no longer paying as much for child care.
Forget about all that, even if it was possible. What 27 year old needs to be buying a $1MM+ house?
This is a big issue (problem? natural market place occurrence?) with properties in Denver (and from what I have read, a lot of other places.) Investors and/or people with tons of equity pay in cash to get into the house and refinance later taking their capital out. It crowds out the first time home buyers and regular joe home buyers coming in with contingent offers based on their existing house selling or looks less appealing to sellers when someone has a VA or an FHA loan that rests on a more stringent appraisal. This motivates the non-all cash folks to either walk away or up their offer and tack on things like appraisal guarantees or foolish things like inspection waivers.Getzlaf15 said:
We were able to buy a house in our mid 20's in large part because my wife lived with her parents for one year post grad.
