> I'm a dad who is happy to have his daughter and fiancé living with me. They pay the utilities and make me nice meals, and it makes it a lot less lonely here. ... I like the multi-generational thing. I know it won't last forever, but it makes life better for now.
It's so easy to get into that cold statistical mindset about these large-scale trends, but it's good to remember that these statistics are the aggregation of a large number of very human stories.
It's also useful to note that the "nuclear family" is a very Western thing, and the US takes it to an extreme. In other parts of the world it's abnormal for adults in their 20s to be living anywhere but with their parents, often even with a fiance or new spouse in the mix.
The idea that having a multi-generational household means that the younger members haven't "grown up" and need to "learn to live on their own" is a completely manufactured attitude. I think many American families would have much stronger, more healthy inter-generational relationships if we lived together (at least for a bit) as adults. As it is now, most US kids leave home just when they're starting to be able to meaningfully contribute to the household as equals.
(Having said that, I definitely feel the pull of childhood and societal expectations. When I was a new adult I was thrilled to be out of my parents' house, and could never have imagined moving back there. I'm nearly 40 now, and thinking about the possibility of living in my parents' house during my 20s still feels weird to me.)
While it's true this seems like a strong US thing, I haven't heard many happy long-term stories of folks living intergenerationally.
In my experience (talking to people from a variety of countries), most couples in their 20s/30s want their own place (even in the countries where it's not common). It seems it can even lead to happier intergenerational relationships when the roomate-type fights don't need to happen.
It would seem to me that it's most common in the US to move out because they can afford to... The US is just an incredibly rich place, even compared to much of western Europe (ex. the US has 40% more GDP per capita than France[1])
There are of course also family/social pressures in some places, but I really don't think it's the primary factor in the differences between many countries.
>The idea that having a multi-generational household means that the younger members haven't "grown up" and need to "learn to live on their own" is a completely manufactured attitude. I think many American families would have much stronger, more healthy inter-generational relationships if we lived together (at least for a bit) as adults. As it is now, most US kids leave home just when they're starting to be able to meaningfully contribute to the household as equals.
There's more to it than just learning to live on your own. In the US, we value individuality above all else. People who never move out and forge their own path in life are far less likely to find out who they really are and what they really want out of life. Whether you're aware of it or not, staying so closely attached to your family can massively stunt personal growth. You are constantly reminded of who and what you are "expected" to be, rather than defining that for yourself. You can see this very clearly by going back to your hometown and talking to the people who never left. Sure there's value in the stability and comfort of that life, but you lose out on the opportunity to truly express yourself and be who you want to be.
I was fortunate enough to be able to attend boarding school starting from age 13, and getting out of my parents' home early was a huge benefit in every possible way. I wish more young people had the same opportunity.
My parents are good people, there was nothing wrong with my home environment. But it's more important that youth learn to act like independent adults and take responsibility for their own lives. Staying at home too long causes learned helplessness. When there's no one around to help it's sink or swim.
Our mother in law is staying with us due to the unexpected passing of her husband, and we have been experiencing this first hand as we look for a shared home.
Not only is there no multi-gen homes in our area (exurb an hour away from a major city) but it's difficult to find a layout where a part of the house can be a mini apartment or her own personal area. It seems like more basements are finished now and some of the design decisions have been quite odd to say the least.
Worst of all is that we're not allowed to buy some land and throw a small structure or trailer/rv on it for her. Even though it's for family it's not allowed as it could be rented out in the future.
The entire process has been stressful and aggravating, and is made worse by everyone sharing the same space working and going to school.
In the US it was also a consequence of affluence and lots of living space. A lot of social progress comes when a new generation doesn't have to live within the expectations of the previous generation. The parts of the US where there is a lot of wealth creation are the parts of the US where a lot of young people move to.
So, without making any judgements about how people want to live their lives, I think it is a negative for the US that more young people are living at home.
Even though I agree it is more of a western thing, I would argue it is also maybe more of a "recent" / urban trend. I am originally from rural Western Europe and a few years ago grandparents, parents and kids all in the same house was still a common sight. I would agree that people look for more independence these days but I feel like in some places it is still fairly recent.
How do you have a grown up, likely physical, relationship with your partner... when your parents are sharing the same rooms? Do you just hide in your bedroom the whole time?
How do you develop your own relationships and life and way of doing things and way of raising your children, inside someone else's house? I can't understand that but I'm open to hearing about how.
Yes, I suspect that people moving out when they are 18 is an anomaly, due to a special time of increased prosperity, and the recent events are simply just the start of a return to the norm.
It's also completely against human nature, especially when it comes to raising kids. We have always lived in large groups and kids were nurtured by and brought up by many members of family, instead of just father and mother. It results in much healthier humans, who learned from all members of family, because who's to say that father and mother themselves only are best guardians? Not to mention the sheer amount of effort required to take care of a child, which was shared by much larger extended family or just tribe members. Today's nuclear family mostly brings mental issues and overburdens the parents in an unnatural way.
>> In other parts of the world it's abnormal for adults in their 20s to be living anywhere but with their parents, often even with a fiance or new spouse in the mix.
The difference is the prudishness of US culture. Those couples are living life as a couple. In a US household they would be treated as kids, with many parents not allowing them to even share a room.
Though I agree that it's not wrong or abnormal (at least for most of the world), in this context it represents a pretty large economic step backwards. There was a time in most middle aged people's memories where starting a career, affording a house and starting a family were all realistic goals in your twenties. Now that's not possible for many, even as economic indicators like GPD, the stock market, inflation, etc. improve. This statistic simply reflects a growing income inequality and corresponding quality of life decrease.
I don't think it is about it being wrong (though it is abnormal in the US context), it is the reason for this shift that is worrying.
Is there any reason to believe this is due to a cultural shift amongst Americans? I don't believe it is controversial that the young have been the most negatively impacted by rising education and housing costs, as well as their demographic being the most heavily impacted by the Covid-19 pandemic. (is it?)
The implication here is that more young adults are staying at home, not because they want to, but rather because they cannot afford to leave (or in some cases, as the article mentions, because it is better than being isolated at home alone). I hope you agree that this is an important distinction.
The American status quo is based on around individual independence and for better or for worse anything that moves away from that is considered a regression.
Well - it's abnormal in that it is not what the US's coming-of-age systems look like. Hit 18, move out, get a job. Whether that is good or bad or right or wrong is irrelevant, it's definitely abnormal from a cultural standpoint.
in the US, living with your parents after high school implies you need their support financially when you're old enough to have a job of your own.
Usually any mention of living with your parents implies being lazy ( the whole "neckbeard living in their parent's basement" stereotype ) unless you qualify it with "but I pay rent". If you pay rent then it appears more like you can support yourself and still not relying on mom/dad to pay your way even in adulthood.
You mean all the entirely predictable situations, like guaranteed increase in sexual abuse and domestic violence? When this genius plan was announced in late winter, I couldn't help but think of all those poor souls who lost whatever safe space (school, library, job, whatever) they had that kept them away from an abusive person in their lives, who were now together 24/7 under psychological and economic stress. Of course, the spirit of moderation requires that we consider both criminal incompetence as well as sociopaths with grand visions for the "betterment" of humanity and our planet, as an explanation as to how we ended up like this.
[p.s. one fine day, the internets will unequivocaly sing the same song, with not a single person suffering from misunderstandings. That fine day, HN will do away with anonymous downvotes, since we will be in a state of perfect harmony.]
Coronavirus ironically has been great for family bonding for us. We spend half our time at my parents house (who live 10 minutes away). Between four adults it’s much easier to take care of the kids, and my parents are retired and love the company. And we also enjoy spending time with them: I’ve gotten to talk to them much more than I have in a decade.
I have friend who immigrated to the U.S. when he was in his teens.
After graduating college and finding a good job, he went to get a roommate and move out. His parents were horrified. "Why are you going to move out of your family's house so you can pay money to live with strangers you found on the internet?".
At first we all laughed because it seemed like a case of immigrant parents no getting how things worked here, but the more we all thought about it, the more the parents seemed to make an excellent point, and one none of us had really considered.
Not sure when families living together became a sign of failure rather than a sign of a close family.
I moved back in with my Dad with my husband. I'm 32, hubby is 30. He had two strokes and my little sister didn't want to be the only one nearby. It's been 6 months. Is it the easiest? No. But it's amazing to have this day-in-day-out time with my Dad again after not having lived at home for years.
My older sister moved back in with her husband and two kids for 2 months as she studied for her medical school USMLE exams so she could take advantage of the free baby-sitting.
Neither my sister's family or my own would've made this decision without the pandemic. My husband and I were both pushed remote (same salary) and my sister's child care plans went up in smoke.
While 2020 has been shit, moving home in some cases isn't an indicator of a problem. It's just a smart reaction to the new reality of working from home.
I'm my early 20s and in the UK. I earn more than my Dad who is in his 50s. He managed to get a house, have money left over for an expensive hobby, decent car, the odd holiday etc.
I'm a 90th percentile earner. Will 95+ percentile earner in a few years time. Yet it feels like I am not as well off as I should be. I don't live in an expensive area either. Yet I need to save so much money to even have the opportunity to buy a house. Then I also need to save a tonne of money for a nice retirement as government pensions get absolutely gutted.
I'm not going to pretend I won't have a good amount of disposable income even after maxing my pension contributions and paying a mortgage. But it just annoys me that I'm a relatively high earner and yet the money won't go very far. The most expensive thing I'll ever buy would be a brick box, and one that's not even as good as my parents.
I’ve thought about this a lot. My parents had 2 TVs in a house of five(and one was junk). We had stick on vinyl floors, and a cheap white appliances. Counter tops were linoleum, and we had 1.5 baths. I cut the lawn, and we went shopping in stores. We took two vacations requiring planes for the first 13 years of my life. Most vacations were camping. We rarely went out to eat. We didn’t have computers. We had 1 corded phone in the house.
This is in stark contrast to my house. We have two iPhones and get new ones every 2-3 years. We have two iPads, 3 computers, and gadgets galore in a house of 4. My countertops are stone, my appliances are stainless. We go on vacations yearly that require planes and hotel, and used to eat out often. I have a house cleaner, and pay for an expensive gym.
I realize I may not have the house my parents have, but I have nicer things. I make more money but I spend it very differently then they did. There was basically nothing we bought that compares to an iPhone every 2-3 years. I know so many people who travel regularly, and don’t seem to realize this was rare 15 years ago. I really feel we spend our money differently.
I mean it sounds to me like you're just wealthier than your parents were, but housing has risen in price disproportionately and so the things you buy are different. Would you really be purchasing a house if you didn't buy a phone every 2 years? The things you list sound like, idk, $10k/year with some heavy assumptions mostly weighted on the vacations than the tech. It's likely true there's more premium goods at (higher) affordable prices, but that doesn't actually contradict the narrative that housing has gotten a lot more expensive.
I say this as someone in the same boat, who could/would/will casually afford to buy an expensive home under 30.
The median net worth of millenial families (35 and under) is $10k. Probably trends negative if you filter down to people below age 30 only.
We spend it differently because supply and demand (yeah, duh), but what I mean is that we make about the same as our parents, but the cost of housing went up, while the cost of travel and electronics went down. So we buy cheap stuff while try to figure out what to do with housing (and healthcare, and so on).
Everything that requires local labor is very expensive (partly because our expectations and requirements increased, we are willing and able to spend more, so a very high equilibrium point formed), everything that can be mass produced is cheap. (And not just because externalities are hidden, but because technological progress.)
I’m in my mid fifties and I have never had a company pension, defined benefit or contribution. I saw my first house decline in value by 25%. We had interest rates peaking at 15%. I didn’t have student loans but only because I didn’t go to university, just like 90% of my peer group. Unemployment was much higher than it is now and schools were teaching subjects for obsolete careers.
I think you're missing how pervasive & broad the issues are these days.
You mentioned you had a house. I'm fast approach the top 1-2% by income and think I can maybe swing a 1 bed apartment. It'll be borderline. Not house...apartment.
...no idea what the other 98% of my peers are doing but they sure as hell aren't buying houses. Meanwhile all the landlords I've rented from thus far where a generation older and had entire portfolios of properties.
Pretty sure I'll come out on top of this because I'm doing well, but can certainly understand the disillusionment of the younger generation
Everyone will argue with their own statistics, but I think your general sentiment is correct.
Everyone seems to think the oldies had it easy in the good ol' days and the youngens are a bunch of lazy good-for-nothins.
There are probably certain a ways it has gotten easier and others in which it is worse... But I think this is more about generational sentiment than actual facts.
RE: "unemployment was much higher than it is now" - I'm not sure what country you're in, but here is a graph of the US unemployment rate since 1950: https://fred.stlouisfed.org/series/UNRATE (unemployment was higher this year than any other period on the chart)
I think it’s good that you were able to own a house even though it lost in value. This ownership still sounds better to me than only being able to rent an apartment. Renting always means that the payments lead to 0% ownership in the end, hence a 100% decline in value.
This rarely matters unless you are looking to sell or borrow against.
> We had interest rates peaking at 15%.
But inflation was higher at the time. Also rates are 0% now at the Fed level, but if you are a consumer you are going to pay a bit depending on your credit score.
> I didn’t have student loans but only because I didn’t go to university, just like 90% of my peer group.
The governments (it's really a global phenomena) pushed the general public into universities. It's hard to blame the students when you take that decision at a very early age 17-19 and most of these youth doesn't have any life experience.
> Unemployment was much higher than it is now
I highly suspect the current unemployment rate is meaningful. To be counted as jobless, you need to register with the local employment office. It's possible today's youth no longer rely on that and use modern alternatives instead.
> schools were teaching subjects for obsolete careers
They still are.
> It wasn’t as rosey as it is often portrayed.
It was not. The only difference really is land and housing which was significantly more affordable and did matter less where you lived. Now you need to live next to a "jobs-hub" that have insanely high rent and purchase prices.
Monetary policy is a huge factor in all this, asset holders are greatly advantaged over productive members of society at the moment.
The combination of artificially low interest rates with significant inflation in particular make housing spectacularly unaffordable. This combination simultaneously pushes up the costs of housing due to asset bubbles forming while reducing the ability of people who earn money to save for a down payment on a house.
I'm no millennial, but gen-X. My brick box is okay. Not as big as the one my parents had, but it's in a bigger city, which really adds to the cost.
But my wife and I are double earners, unlike my parents. And we both have really good jobs. We don't have it hard, but we don't drive new cars either; we've got a second hand Prius. The only sign that we've got it good is that our house in Amsterdam is not as tiny as most.
But I also wonder if maybe our expectations may be too high due to the constant stream of luxury lifestyles that we're being fed on TV, in movies and on other media.
I'm "X" as well and while I grew up it never occurred to me that owning a single tiny home would one day be considered a luxury. I was raised by a single dad who, on one tiny teacher salary ended up with two houses, all sorts of motorized "toys", financial security and a pension by the time he retired.
I probably make 3-4X what he did at the top of his career, and am kind-of hanging on to a house with a tough mortgage and a no-frills lifestyle. My Millennial and younger colleagues' financial lives are even more of a disaster.
I remember when someone reported that GenX was the first generation for a long time whose finances were expected to be on average worse than the previous generation. It looks like this trend has continued at least 2 or 3 more generations. It's not a blip, it's the new actual trajectory.
expectations may be too high due to the constant stream of luxury lifestyles that we're being fed on TV
A vague quote comes to mind, something about the peasant classes of a few hundred years ago would have overthrown the ruling classes a lot sooner if they had any idea the luxuries the ruling classes were enjoying.
I.E., maybe what's happening is thanks to TV maybe we're finally understanding how good some of those on the top have it.
You live in Amsterdam... sorry to say, but that is privileged as hell. Housing prices are becoming insane even outside the Randstad (I’m a 95 percentile earner too) so if you own property in the Randstad and think ‘the only sign you have it good your house is not tiny’ - take off the horse blinders.
Comparing a salary with a pension to a salary without a pension is insanity. Wages are not stagnant. They've declined precipitously. take-home pay is stagnant and pensions are dead.
And real-estate has been pumped so heavily with low interest rates that you either can't afford it or, if you can, you get to sleep with the knowledge that the music has a good chance of stopping on your watch.
Just for the record, I think "pension" in the UK means something quite different than it does in the US. A UK pension is (usually?) more like a US 401(k).
The post-WWII generation were able to buy a house plus car/holidays/etc on one person's median working class salary.
It wasn't a particularly palatial house, but the mortgage would have been paid off before retirement.
But this is a direct consequence of a rent-seeking economy which uses property rights as a proxy for political influence. The British economy started being converted from an industrial economy to a patrician rent-seeking speculative economy in the 80s, and the result was massive asset price inflation in property and shares.
This wasn't an accident. It made a certain kind of person extremely rich, and most other people increasingly poor to varying degrees.
Unless there's a change in strategy - unlikely - you can expect the wealth concentration to continue in the UK, with increasing danger to the personal circumstances of any kids you have - if not to yourself if there's a serious downturn.
Even a 95%er is in danger of losing their property if they lose their job for an extended period if they don't live off speculative investments and rent.
>Unless there's a change in strategy - unlikely - you can expect the wealth concentration to continue in the UK, with increasing danger to the personal circumstances of any kids you have - if not to yourself if there's a serious downturn.
It's the same in the US.
>Even a 95%er is in danger of losing their property if they lose their job for an extended period if they don't live off speculative investments and rent.
I fear this the most. My husband and I make more money than the rest of our family combined (both mothers, both fathers, 4 adult siblings, their spouses), but I still feel uneasy about the future. Maybe everyone worries more during uncertain times, but being mid-career with savings/investments I never thought I'd be concerned about losing everything.
I chalk it up to things simply costing more. I make more than my dad did. I dont take any major vacations, go out much, or live in a McMansion, yet we struggle to save.As a kid we took lots of vacations, they saved a good amount of money (stock market was good for them) and are doing well for themselves.
I imagine it's only going to be worse for my kids.
Your house has smoke detectors and a dishwasher. Your car has airbags. When you decide you want to build a garden shed behind that brick box you need to get permission from the town and pay for that permission. Your dad didn't have any of that stuff. You more or less need a smartphone to function in modern society. There's more wealth sloshing around and more (in terms of quantity, probably not proportion) of it comes your way but you're not getting any freedom to do the things you want to do from that wealth because society takes a huge chunk of it and earmarks it for things and you don't get to use it to take a vacation or whatever. Basically standards of living have inflated and there's no choice not to buy in.
Also the interest rates vs asset prices thing other commenters have mentioned isn't helping.
I see this argument, but it has limits. A seasonal farmworker today has access to Google and Wikipedia, but they are still working 12 hour days. They are less likely to get communicable diseases due to vaccination and disease eradication, but hospital stays are more prohibitively expensive than before. It's complex.
I feel the same. I'm not earning quite as much you are, but still doing better than most of my peers. None of the millennial spending tropes apply to me, either, since I don't buy anything outside of the usual bag of groceries once a week.
What's especially worrying is that if I'm "doing well", and I'm so screwed, what's going to happen to the rest of the population below me?
As an engineer in his 50's (USA) - I am also a 90th percentile earner, but I absolutely agree, I'm nowhere near as well off as my parents were at my age.
I never had the money to take my kids on nice vacations every year like my parents did. Also never had the money to justify buying a new car. And while I do have a home, I have no hope of paying it off before retirement. (which, as an engineer, in the USA, could be 1-5 years from now, involuntarily - my father worked for the same company his whole life, while I've had to change jobs 6 times, due to either corporate buyouts or layoffs. NEVER had a bad performance review).
All of my kids, my brother and sister's kids (all in their 20's now), are all very much struggling, barely making it (and in a couple of cases, NOT making it). Only ONE of them (my son) got through college and found a reasonably decent job, and even HE is so bogged down with student loans, he may never own a home.
So as a picture of 3 generations, there's a very clear trend.
For reference, 95% percentile would be somewhere around £100k a year in London. (If you look at working men aged 25-55 the number should be a fair bit higher)
I don't know what you earn but if you are early 20s it might be less than that. There is a lot of money floating in London, the price of homes almost make sense when you realize what the top earners actually earn, the few percents competing for the same homes.
The other critical factor is instability in the sense that we can lose our jobs at any time. It makes it very difficult to plan long term if you expect your industry to get offshored, or automated, or generally collapse somehow. Even if these calamities don't happen to you, you'll still switch jobs way more than the previous generation.
If you are London based, you should also factor in that London real estate’s qualitative transformation in the last 40 years. It used to be real estate, you know, local people buying homes to live in. Now it’s one of the best performing asset classes in the world. You aren’t competing for property with your mates with a big inheritance. You are competing with dodgy oil money that needs to be laundered and more honest international investors told to diversify. The rule of law is a precious and rare component of legal infrastructure, so a lot of money is diversified into jurisdictions with strong guarantees.
I’m generally a pro-market person. In the case of UK real estate, I support a ban on non-residents buying property similar to what Canada have.
You're comparing yourself to the wrong baseline. The opportunities now are different than they were 30 years ago. You also might be comparing yourself to a specific data point (your dad), vs statistically.
> I'm a 90th percentile earner. Will 95+ percentile earner in a few years time. Yet it feels like I am not as well off as I should be.
You should correct your attitude then, don't you think? You are a 90%ile earner. I don't know what "should" implies, but put it in terms of where you "are". You'll be happier.
House prices will never fall significantly. As soon as a house enters the market at anything below the going rate it's bought by a landlord or a rental company. This will keep house prices high forever.
You are paying for your Dad's pension, and for the Government services consumed by millions of migrants.
Those same migrants increase labor supply (thus lowering the equilibrium price) and increase demand for land and real estate.
The end result is high taxes and high real estate cost. Of immense benefit to your dad (and other Baby Boomers) who receive risk-free pensions, and supercharged capital gains for their own assets.
High tax rates are what causes this. You are effectively giving away half your wage to sustain a completely unknown person leeching off the government.
What an absolute load of tripe. I'd gladly pay even higher taxes than I do to make sure everyone has access to healthcare and benefits when they need them. "unknown person leeching off the government" is the attitude that just needs to die, it annoys me so much that people still believe this crap, any one of us can be this "unknown person" at some point.
This is blatantly false. Income tax on higher earners in the UK has decreased since the 1970s/1980s when IIRC the highest tax bands were over 70%, if not higher.
No, it isn't. Housing prices as they are are a product of supply and demand. Such that, regulations are preventing the building density required to meet unceasing demand propelled by immigration.
Historically rate of taxes were not much different than they are now, whether for North America or the UK.
I moved back into my parents house after my lease expired, primarily to have regular social interaction again.
> "While moving back home during the pandemic makes sense and is seen as socially acceptable or even smart, it also means you are living with people who still see you as your 18-year-old self."
One of the biggest things I’ve noticed among millennials is how many parents fail to understand the emotional and mental situation of what their children are currently experiencing. I feel so incredibly lucky that my parents understand that I’m not 18, and they’re happy to help out during these uncertain times. I’m so much more productive working from my parents house because I now have enough space for a decent home office.
I also have coworkers that have openly talked about how their parents refuse to let them move back in during the pandemic, citing the “time to grow up” mentality. I’m all for taking personal responsibility in one’s life, but there are a whole lot of older people out there that are oblivious to just how serious the pandemic has been economically.
> how many parents fail to understand the emotional and mental situation of what their children are currently experiencing.
This is crucial to understanding:
- The immediate distress of young males. They have no chance of seducing externally if they don’t have moral support at home. Explains the billion of 9Gag posts about young people who fall addicted to gaming and joke about virginity and lack of self confidence, who joke about the thing they know they’ll fatally become. They’re stuck in a bad place in life.
- The rise in what all Democrat fans would call “Extreme right”, which they don’t understand is just people who we’ve abandoned, who count on no-one because no-one cares for them. Isolation and individualism goes hand in hand. I keep telling my leftist friends if they want solidarity to triumph, they can’t just focus on women-at-the-workplace, one day they’ll have to face the men-at-the-game-addiction-station question. Especially if they want a cohesive society.
Living with the parents isn’t the best way to get social interactions, unless it is a venue where they can be for _caring for others_. Because young men are especially deprived of places where they can care for someone, women being very independent nowadays, especially in their 20ies. And caring for someone is the blood of the soul.
> Living with the parents isn’t the best way to get social interactions, unless it is a venue where they can be for _caring for others_. Because young men are especially deprived of places where they can care for someone, women being very independent nowadays, especially in their 20ies. And caring for someone is the blood of the soul.
I think you put that very nicely.
I think I understand this problem, and I have empathy for these men (it also took me a long time to get my first relationship, I know how it feels). I just don't know what the solution is. Their frustration might to some extent be caused by the independence of women (where women now may prefer to be single than to be in a relationship they don't really want), but I don't think it's right to hold back on women's emancipation in order to make men feel better about themselves.
What exactly is the right's suggested solution here (I ask this out of genuine curiosity)? Today's mainstream right looks at these frustrated men's hardening hearts, and all it seems to see is an opportunity to accelerate that hardening for political gain, by convincing them that the source of their woes (and the rightful targets of their anger) are immigrants/feminists/protestors/... I'm skeptical that we should expect any workable solutions from there.
Also, as a side note, why do you feel the need to use quotes around "Extreme right"? Do you disagree with labeling rising movements like QAnon and incel/blackpill subculture as "extreme right"?
I will never understand this mentality, I mean if the child is an out and out slacker maybe I could understand, but to this day, if I fell on hard times I have a host of family members that would take us in, no questions asked. We as a family where raised that way to the extent that I could show up on a second or third generation cousins door step and they would take us in. That fairly distance relatives I can't imagine a family where the dynamic is that they will not let their direct descendant come home to catch their breath. I mean that is your legacy.
I actually had to come home when I was in my early 20's. I spent my high-school and post-secondary years pursuing culinary arts. It never dawned on me to actually get a job in a commercial kitchen until I had my culinary degree due to the fact that I worked thru school as a finish carpenter and made a pretty good wage for a 18-19 year old kid. Anyways with degree in hand, I set off for New Orleans to make a name for myself as a chef. From the moment I got into a commercial kitchen I realized I had made a big mistake, while I loved cooking, being a chef in a commercial kitchen has little to do with actual cooking. So I came home hat in hand with no direction, went back to carpentry while I regrouped, the entire time my grandfather (I was raised by my grandparents) kept saying you know you really have a knack for programming those computers. I always viewed it as a hobby but folded to his suggestions and took a job at a local shop doing custom business software. This was the dawn of the internet, so there where still small shops doing desktop software for small businesses. Anyways the rest is history but the point being, is I knew I could come home, I could not imagine not having that relief valve as a young person, especially in today's climate.
> "While moving back home during the pandemic makes sense and is seen as socially acceptable or even smart, it also means you are living with people who still see you as your 18-year-old self."
I feel that this is the case for many people and in other contexts. If you develop a lot during say two years of employment, then depending on who your manager is, you may still be seen in the same way as when you started.
There is an inherent poetic dilemma with reconciling yourself with how you age. Parents can buffer this change, whether for positive or negative effect.
Interestingly in most parts of Asia(East, SE, South), living with your parents is the norm, so parents usually prefer if their kids stay with them but it does mean way less personal space and freedom.
Due to the culture, everyone will go out of their way to make you feel as independent as possible. Plus there's single day hotels if you want to have a room alone with someone who should not meet your parents yet. In the end, living with your parents then boils down to going to a restaurant with them on the weekends to honor your ancestors, but most of the time they behave more like roommates.
I think it’s cultural. American society absolutely looks down on those that live with their parents as failures. If I were to guess, some parents might see their children asking to return home as a reflection on their ability as a parent to prepare for the “real world”, but that’s just my guess.
There are people who never grow up if given the opportunity to keep living with their parents. My cousin is one of them.
Get a job? Why? Go to school? Why? Things are fine. I have someone to cook my meals and a warm bed to sleep in.
My uncle ended up booting my cousin out of the house. It was the best thing that happened to him. He matured significantly, went back to school, has a great job. He even admits it himself that he was in a rut that would have never ended had he been able to keep living at home. Living at home sheltered him from the real world.
I will probably be going against the grain here, but I managed to rent a flat by myself while in university years ago with a part time job in a supermarket at weekends and applying for some hardship funds and other money available at the time.
Rents have risen a lot since then, but is it really impossible for someone in work to be able to afford rent? Or are they insisting on living in a fashionable part of town? (For me independence from my parents was quite a high priority in those days).
In a lot of areas normal jobs are literally impossible to do at the moment. It isn't a matter of whether or not people want to do them. In my city in a non-US country you actually are doing something illegal if you go to work in certain industries or undertake extremely common activities that were normal 6 months ago. This is unique and far beyond anything me (or my parents) have ever known. No obvious end to a lot of this is in sight.
You didn't manage to rent a flat by yourself. You were given money to do so, by your own admittance. I don't blame you for taking advantage, but you're using it to argue that young people can or should be able to make it on their own. You've just got anonymous parents supporting you in place of your own parents.
Not in my case, I was easily able to afford rent and I’ve stayed employed throughout the pandemic as a tech worker.
The challenge has been maintaining my sanity. My previous apartment was small and didn’t have space for a good home office setup since I never expected to work from hone when I leased it. Additionally, I was having little social interaction due to the pandemic since Texas wasn’t doing a good job preventing spread early on.
My other reason for moving in with my parents was that my company did a lot of business in the travel industry and I feared layoffs. Not having to worry about my living situation while looking for another job in the midst of a crisis was a huge relief in my mind. Fortunately, I’ve been able to stay at the same company so far.
If being independent is the absolute most important thing to you, that’s great. But I’d argue that America’s individualistic culture is one of the biggest reasons we’re struggling to get past this pandemic. People demand the right to ignore basic public health requests, and it’s a major problem.
While I’m sure they’ve gone down a little in certain urban cores, like SF, they remain absurdly high in the midsize, Midwestern city where I grew up and now live. When I moved back, apartments here were going for only a bit less than what I paid in Los Angeles and seem to have not gone down at all. Home prices also remain artificially high because there are less listings and more interested buyers.
This is something that really depends on where you live more than anything. I will say there is no state currently where you can afford an apartment by yourself making minimum wage.
I started as a trainee broadcast engineer in London on £17,800 a year in 2003. This left me with £1,082 a month (back then student loan payments were far higher than now). Rent for a tiny bedsit with a shared bathroom was £520 a month, 2 mile walk from work. I could live further out, but commuting costs outweighed any savings.
That's the equivalent of £828 a month now. Bills were included.
You can actually pick up a studio flat for £737 in the same area, which actually looks better - it's about 60 square feet which I think it a little smaller than the one I had, but it has it's own toilet. Council tax is on top of that at £45 a month, but still fits in the budget, just.
Assuming the same 50% of take home wage in rent, or a net wage of £1500pcm, would be about £21k/year
My £17800 salary in 2003 would be £28,300 today, or net of £1900pcm, so could afford (on the same ratio) £910 a month, which gives you a fair amount of choice at the moment in W14 according to rightmove.
I'm surprised as I felt renting was far harder now than 20 years ago, but seems it might be slightly better. Of course rents on tiny studios are presumably depressed because of covid19, I'm not sure what they were this time last year.
> Housing is more expensive for them than prior generations
I harp on this constantly. But housing is not more expensive in the majority of American metros. Adjusted for inflation the median cost per square foot of new housing is almost exactly the same as it was in 1990. (This doesn't even take into account that mortgage rates are drastically lower since then.)
We get skewed on this for two reasons. One is because homes today are substantially larger and have more amenities than they did in previous generations. We take for granted better fire safety, higher ceilings, central A/C, higher load electrical circuits, attached garages, better lighting, and swimming pools that are much more common in new construction.
Two is that we're highly skewed to a handful of elite metros, whose housing markets are not representative of the country as a whole. Housing is expensive in San Francisco, New York, LA, and DC. But in places like Tampa, Omaha, Cincinnati, and Phoenix the cost of housing (per square foot) has barely gone up at all.
The demand for ultra-expensive housing in places like the Bay Area is driven by the huge earning potential of the high-skilled labor market. (Of course the supply side of the equation is driven by NIMBY zealotry.) If you're talented enough to make it as an L8 at Google, then it probably does make sense to buy a house in Palo Alto. You'll earn far more money than you would in the St Louis tech scene. more than enough to make up for the living costs.
But unless you have the potential to become an L8 at Google (or equivalent), it makes no financial sense to choose to live in the Bay Area instead of Raleigh. It's like somebody who works as a back office bookkeeper insisting on buying custom tailored Seville Row suits for his work attire, then complaining that the costs of clothes has gotten out of hand.
> Two is that we're highly skewed to a handful of elite metros, whose housing markets are not representative of the country as a whole
Right, but what matters is the housing price where people are. It doesn't matter what the housing market looks like in South Dakota if I don't want to live there. While houses in South Dakota may be 1/10 the price of houses in NYC (likely cheaper, honestly), they also have 1/10 the population. The notion that the quantity of land somewhere (in this case, quantity for sale) should somehow equate to importance more than the quantity of people is ridiculous.
> It's like somebody who works as a back office bookkeeper insisting on buying custom tailored Seville Row suits for his work attire, then complaining that the costs of clothes has gotten out of hand.
No, it's like someone who works as a back office bookkeeper in New York City being forced to pay insane amounts in rent while seeing thousands of empty AirBNBs, hotel rooms, etc. and complaining that the cost of living has gotten out of hand. Housing is a necessity, "custom tailored Seville Row suits" are not. And it's simply not feasible for the vast majority of people living paycheck to paycheck to just up and leave to Raleigh like you imply.
> Right, but what matters is the housing price where people are.
We're not talking about houses in the middle of nowhere. These are major urban population centers.
The Houston metro area has 7 million people. The Phoenix metro area has 4.9 million people. Tampa metro has 3.1 million people. Houston and Phoenix are both larger than the Bay Area metro is currently. Tampa's just shy of the size of Seattle.
Nor is it the case that these are depressed areas with hollowed out job markets and no opportunity. They all have substantially lower unemployment rates than the national average. Well below the Bay Area in fact. All three of these metros have large-scale employers with plenty of high-skilled jobs. All three have economic growth rates and business formation rates far above the national average.
>And it's simply not feasible for the vast majority of people living paycheck to paycheck to just up and leave to Raleigh like you imply.
There was a time where people would move countries with nothing but what they can carry at a chance of improving their life. At a time where the only way to travel was by boat for weeks and the only way to communicate to relatives was by mail.
Now we balk at the idea of moving cities when it's easier than ever before, and we can communicate instantly across the world.
To be clear, it's not just "Raleigh" or "South Dakota", it's really any city outside of California + New York. I live in Richmond, an hour and a half from DC, and you can buy 2000 sqft homes for 200k.
Ok so the change from a decade or two ago is that young people want to live in places they can't afford. In the past they were evidently more content to live in places they could afford.
Doesn't really feel like cost of housing is what's changed.
> what matters is the housing price where people are
What matters is where HN commenters are, because they are controlling this discussion. Let's not pretend that upvotes here are representative of the wider population, or that the average populations' opinions are well represented here. No, you did not imply that, I'm not attacking you or anything, but I figured it should be said lest we delude ourselves.
> I don't want to live there
Isn't it great that the increasing wealth in society gives us the idea that we can pick and choose anywhere in the country to live and then expect to buy a house there? This was not exactly the case for my (grand)parents. My family came from Buffalo, moved to Phoenix, and settled in the Seattle area(long before there were Amazon jobs, when the PNW was a refuge for weirdos). Imagine how silly it would be if the majority of the US population thought they were entitled to a house in a "tier 1" city.
> But in places like Tampa, Omaha, Cincinnati, and Phoenix the cost of housing (per square foot) has barely gone up at all.
Maybe if you stop looking at like 2018. But my on-the-ground analysis living on one of these cities is cost of housing has fucking exploooded. I built a house just two years ago, which I thought was incredibly expensive at 2 times the median home price in the area. I had it in the back of my head that I was insane to pay so much for a house, but since I could easily afford it, I went ahead with it.
Now, the median price has shot up by 25% and there are literally no new houses available for what I paid. My neighbors are relocating after only a year in their house and sold their house for 20% over what they paid new. The new construction 3 miles down the street from me starts at 30% more than what I paid, and a few are double or more. Meaning, 3-5x the median for the area.
All of this is trickling down to the rest of the area. Houses that went for $130k in 2015 have sale prices in the $200k range. We're talking 60s era ranch houses that haven't been updated since the 90s.
Olympia WA, 60 miles from Seattle, 100 miles from Portland:
A recognition (debate, but at least some recognition) of what is called "The Missing Middle" (medium density housing, alternative options, not just SFHs and "high rise").
A proposal is put forth, and there are screams from homeowners, because the study shows that the Average Property Value in the urban growth area will _slow_. Not decrease. But instead go from 12% YoY growth (which is insane) over the past 10 years to, if all measures are put into effect, an estimated 7% YoY growth.
Somehow these homeowners have got it into their head that they "have a right to" property value growth which, at its worst, will outpace inflation _by a factor of TEN_.
I agree with you in principle. Since the 2008 crisis, previously developer-friendly mid-sized Sunbelt metros have adopted some NIMBY building restriction policies that would make even coastal California blush.
But so far, that hasn't really created a housing affordability crisis... yet. A lot of the impact has been mitigated by falling mortgage rates and rising wages. Let's just take Tampa, as one of the hotter housing markets. Since 2014, median listing prices have gone up 57%.[1] Adjusted for inflation[2], that's 49% real price growth.
But over the same period, average mortgage rates have fallen from 4.49% to 2.95%[3]. Meaning for the same house cost, the monthly payment on a 30-year fixed mortgage has fallen by 18%. In addition national median incomes have gone up over the period by 10.5%[4]. (And almost certainly more in Tampa specifically.)
Therefore housing affordability has only declined by about 14% for the median household in Tampa. All during an extremely hot housing market. Again, that's still indicative of some recent bad NIMBY policies. If housing supply was perfectly elastic, things like lower mortgage rates and higher wages would benefit consumers instead of inflating property prices.
But there's no indication that housing has become drastically more expensive in "flyover country". This conclusion can be spot checked by comparing national consumer expenditure surveys over time. The percent of after-tax income spent on shelter has actually slightly declined from 17.8% to 17.0% during the 2013-2019 period.[5]
YoY median home prices were up 13% nationally in August. That's largely driven by the diaspora we're seeing with WFH/COVID, with people pushing into more affordable communities and driving up prices. Until now we were all competing in major metros pushing up only the top end of the curve but now there's a push towards the median priced areas.
I'm not sure what you're arguing here. The simple fact is the amount people pay for housing is up since the 1990s. You can find this data on the BLS web site:
https://www.bls.gov/cex/csxmulti.htm
Here is the data adjusted for constant 2020 dollars:
It looks like this is counting the average rather than median, so it's going to be skewed by the top earners. Here is per capita income during the same time period using 2019 dollars:
It has increased even faster than average housing costs. To be fair, that's is expected because rich people don't spend the same percentage their income on housing as most other people.
Interesting, I've never seen that stat before. one problem is that inflation is a lot lower than before. If you borrowed a house in the 70s/80s you'd pay less each month but after 10 years that payment would be negligible, where now it still takes a big chunk out of your pay.
I spend much more on food now than I had when I had been a student, but it's not because the food is much more expensive, but rather I am much wealthier now.
Grows in expenditures does not immediately imply growth in costs.
Historically a house in the US cost around 3 times the median annual income. During the housing bubble of 2006 the ratio reached 4.5 - in other words, the median price for a single family home in the United States cost 4.5 times the US median annual household income
> Two is that we're highly skewed to a handful of elite metros, whose housing markets are not representative of the country as a whole. Housing is expensive in San Francisco, New York, LA, and DC. But in places like Tampa, Omaha, Cincinnati, and Phoenix the cost of housing (per square foot) has barely gone up at all.
I think cities are fundamentally the wrong unit to look at when thinking about housing prices.
What we really want to know is "how much does it cost to live some place where I can get a job". Knowing that Tampa is just as cheap today as it was 40 years ago means little if Tampa today has, say, only 70% of the jobs that it did back then.
What we really need is some sort of normalized "job availability unit" like "per capita" but "per employment opportunity" and then try to calculate current and historical housing costs relative to that.
> "how much does it cost to live some place where I can get a job"
And we'd do well to price that in hours of work per week after taxes, including commute.
That is, making $30 an hour where a house is $300k can be better than making $60 an hour where a house is $600k . Think about progressive tax rates, CoL, commute time et al.
No, you have the option of buying a condominium apartment in most cases.
Here in the Philadelphia urban real estate market —- which has no shortage of reclaimable housing —- the break-even point for builders is about triple the value of the existing homes. No current resident can afford to buy one, so single family homes get converted into tiny “luxury” condos.
[Edit: there are city subsidized ‘tiny-housing’ developments but these are more for welfare recipients than regular buyers.]
This is one of the perverse effects of limits on new construction. Since builders can only build so much, they naturally focus on the high-end where profits are fattest. In a well-functioning market there is only so much demand for luxury housing so they would also build smaller, less expensive stuff as well, but they can't
>One is because homes today are substantially larger and have more amenities than they did in previous generations.
I have noticed that most of my fellow millennials seem to have completely forgotten the concept of "starter home" and assume that as soon as you turn 25 you should be entitled to a 4 bedroom house with a pool, huge yard, wonderful neighborhood, three-car garage, etc.
Among my friends that have bought houses, many of them have gone into significant debt just to buy a 3-4 bedroom house, even though they have no kids and only use one of the bedrooms, because they think that at some point in their life they will put them to use. The extra rooms go completely unused (other than the extra furniture which they also went into debt for). It's like they see the house that their parents own and assume that their house also needs to be that, and ignore the fact that their parents probably started out in a much smaller home and then moved into a big one once necessary.
>Two is that we're highly skewed to a handful of elite metros
I contend that it's not even just this, but also that within metros millenials are highly skewed to a handful of elite neighborhoods.
I live in a medium COL metro, and all of my friends constantly lament the "high" cost of houses and how they will never be able to afford a house. But when I ask what houses they are looking at, it's always the nicest, premiere neighborhoods that have McMansions with huge yards, white picket fences, hip restaurants within walking distance, etc. Not a single one of them even considers living in the many much cheaper neighborhoods.
There certainly are issues with prices in some areas (cough SF cough) but at least in my metro and in my friend group, the "houses cost too much" meme seems to be a scapegoat for what is really just an inflated sense of what housing they are entitled to.
> I have noticed that most millenials seem to have completely forgotten the concept of "starter home" and assume that as soon as you turn 25 you should be entitled to a 4 bedroom house with a pool, huge yard, wonderful neighborhood, three-car garage, etc
I don't know where you live but I almost find this insulting.
I'm from Amsterdam my self and friends of my are being forced out the city because of the high rent prices.
I'm 32 year now and because of some shitty new rent laws that says every tenant needs to have an individual rent contract which our landlord refuses to give I'm also being pushed out of my home. I tried to find something for my self just anything would do, but I'm kinda skewed because I just earn above social housing and here in Amsterdam there is not really a market anymore for middle incomes. So yeah I'm being pushed to either live in a room or move out of the city. But I also couldn't find a room in time so now I'm going back to my parent. So yeah your comment kinda hits a nerve for me.
> I have noticed that most millenials seem to have completely forgotten the concept of "starter home" and assume that as soon as you turn 25 you should be entitled to a 4 bedroom house with a pool, huge yard, wonderful neighborhood, three-car garage, etc.
"Starter homes" for young people is the stuff that was built 30-40 years ago that hasn't been updated. So they are buying those mcmansions because that's what was built in the 80s-90s-00s. The really nice, older urban areas with housing built before that is way more expensive in absolute dollars.
Smaller is not cheaper in most cases. Smaller is "established" and everyone with money wants to live in those established neighborhoods, not the suburban sprawl 50m from the city center.
Have you ever actually look for small living spaces in the US? I would be perfectly fine with a 450sf apartment in northern VA, but their almost impossible to find in desirable locations. A large reason for this is the actual cost to construct a building doesn’t increase linearly with apartment square footage. Simply having a smaller apartment doesn’t reduce the amount of space needed for hallways, elevators, or parking spaces. Kitchen’s and bathrooms similarly cost a lot more than large carpeted areas.
This ends up being reflected in renal prices. My building has a 578 sf studio @ 1515$/month where a 751 sf 1br is running $1,625/month. Add in parking and your talking 30% more space for 7% more rent.
It’s not that the actual cost per SF is equivalent, it’s that housing got upsized without much input from consumers.
> Among my friends that have bought houses, many of them have gone into significant debt just to buy a 3-4 bedroom house, even though they have no kids and only use one of the bedrooms, because they think that at some point in their life they will put them to use.
Are you sure your friends aren't just being rational? I thought about the rent vs buy thing pretty constantly in my 20s and always came down on the rent side. Not because renting Dwelling A would be cheaper than buying Dwelling A, but because I was happy living in Dwelling A (a nice-ish 1-bedroom apartment) but if I were to commit to ownership I'd want Dwelling B (at least 3 bedrooms). Life can change fast - you're not sure which fling will turn into a spouse or when a little one will come along or when you'll really need a home office. Selling a one-bedroom condo is obviously doable, but transaction costs are fairly insane on real estate, and it seems like low-end places (like 1-bed condos) haven't historically experienced the same appreciation as standard houses.
It sounds like your friends could get by with a Smart car but bought a Toyota RAV4 instead. And when they decide to trade up to a Tesla in a few years, they might find that the RAV4 retained value better than the Smart car, because that's what "everyone" wants!
> Among my friends that have bought houses, many of them have gone into significant debt just to buy a 3-4 bedroom house, even though they have no kids and only use one of the bedrooms, because they think that at some point in their life they will put them to use.
I was one of these people who was conservative and bought a small cheap apt starter home instead of a 3-4 bedroom house. 10 years later I can't afford a 3-4 bedroom house because they've gone up in value so much so I'm still in my apt and its crowded.
Looking back and what would have been optimal I should have bought a huge house as soon as possible, probably a couple of them. That way I could retire by now.
I did the "starter home" thing in 2006 and then the market crashed and I was under water until 2019...
I would never recommend the idea of a "starter home" to anyone, ever. It only works when housing prices are on the rise and continue that way the entire time you live there.
It should be noted, they don't build 2 bedroom homes anymore. I was talking to a real estate developer in Sacramento about this. New 3 bedrooms do exist, however, they would rather cram out the lot with a 5 bedroom since the cost to add on another few hundred square feet is nothing if you have the equipment and material right there. PLUS! People will go ahead and take on huge loans with that low interest rate. It is win win (unless you don't want huge crushing loans).
"Starter homes" were bought up by wealthier older people or businesses to turn into AirBnBs or rentals.
https://www.bobvila.com/slideshow/7-signs-starter-homes-may-...
I don't know if you talk to any "millenials" but most of them are _extremely pragmatic_ by necessity.
Fact is though, it doesn’t matter much where in the world you’re looking to buy. If it’s a capital you’re expected to pay close to $1m or more for a house, even in places like Beirut where the houses don’t have central water, electricity/internet infrastructure is extremely poor. Prices are the same. This in a moment in time when the majority of people barely can afford food due to the pandemic and financial meltdown that has occurred.
The main reason behind it all is the low costs of taking on debt, which in some scenarios is totally insane. Italy for example that has been bailed out several times can get rates around 1%. What kind of entity would accept the risk of default when the profit is close to none after inflation?
The world is obviously in a debt bubble - the question is only when it will pop & how dramatically it will happen.
> I contend that it's not even just this, but also that within metros millenials are highly skewed to a handful of elite neighborhoods.
In St. Louis there's a small but frothy back-to-the-city movement that's driving prices up to new highs in a handful of trendy neighborhoods. And it's all anybody can talk about. It's a kind of synecdoche for "the housing market" to reference these tiny neighborhoods while using cargo-cult language about "gentrification" that people learned on twitter.
Make no mistake: prices are way up in those neighborhoods. But they're walking distance to far more affordable housing. It's really bizarre.
I have noticed that most of my fellow millennials seem to have completely forgotten the concept of "starter home"
I've noticed this too, but obviously it's not universal (lest someone accuse me of bashing millennials).
And with regards to houses getting bigger, I keep hearing about the "golden years" when you could buy a home on a single income. Sure, but those homes were similar to what my parents starter home was - 1000 sq ft, 2 bed, 1 bath with a family of 5 living in them (siblings sharing rooms).
> I have noticed that most of my fellow millennials seem to have completely forgotten the concept of "starter home"
"Starter homes" tend to be fewer these days, especially in desirable areas. Much of the old "starter home" inventory has been upgraded and made much larger over the years, making them not really starter homes anymore, and very few builders build small houses these days, since profits for building larger homes are higher. The closest thing to starter homes being built today are condos, but those are usually in high cost areas, so again not terribly accessible.
This is why it would be good to change zoning to allow existing single family zoned lots to be subdivided or turned into multi-dwelling lots, which can accommodate a main home and a separate "starter home". This is starting to be done in places like Toronto with "Laneway houses"
> McMansions with huge yards, white picket fences, hip restaurants within walking distance, etc.
Huge yards, white picket fences, absolutely, but where are you finding "McMansions" with hip restaurants within walking distance? Usually "McMansions" are synonymous with totally un-walkable and car-bound developments.
People I know buy smaller flats if childless, rent with roommates and have three kids in one room.
And cant afford large houses, not even with debt. Cause no bank will borrow them. If your friends could get that much money, they are likely well off and see the house as investnent.
Which is how we bought put flat - rent was only slightly cheaper then mortgage.
> Among my friends that have bought houses, many of them have gone into significant debt just to buy a 3-4 bedroom house, even though they have no kids and only use one of the bedrooms, because they think that at some point in their life they will put them to use.
The problem is they think they might not be able to afford it once they have enough kids to need it. Ironically lots of people thinking that way reinforces the problem.
> I have noticed that most of my fellow millennials seem to have completely forgotten the concept of "starter home" and assume that as soon as you turn 25 you should be entitled to a 4 bedroom house with a pool, huge yard, wonderful neighborhood, three-car garage, etc.
Then you've got a non representative sample. This claim is outrageous, and it's not true. Honestly it pisses me off how casually you just assert that most millenials think this way. A very simple search for millenial home buyers surveys will show this is not the case.
I've got 500k in liquid assets, a respectable salary and no debts. I'm looking at the housing market and see two options: a junk house in a sketchy area for 600k or a decent house for 1.2M, but I'd have to give up financial security and live pay check to pay check.
If there was a smallish decent condo for 200k, I'd write a check today.
it isn't just homes. there is no starter car, no starter tv, no started anything. I regularly work with tech support persons who are spending more than I am on a wide range of goods and services. It is mind boggling to me.
Yes some have trade offs but that seems to be either they are house poor or car poor but mostly the latter. What catches them as with those who do have the money is all those monthly bills can add up really quickly. Adding twenty to thirty to your monthly phone bill for a new phone doesn't sound bad until they add in other similar arrangements.
Sadly far too many seem to think they are just free this or free that away from having it all. (as in if healthcare were only free or college was only free they would not have such problems - welcome to the poison of politicians and mass merchandise marketing combined)
I dont think this is a regional problem -- it is a problem of income/price and income/rent ratios off the historical chart almost regardless of where you live. It is a worse problem in SF, NY, LA, and DC but still a universal problem.
I’ll ding you on the financial sense of not living in Bay Area vs living there even if you’re just a new grad (or just below L8). I live in a very low cost of living area with salary nearly twice the median software engineer and I’d still be able to save 40% more on a google paycheck even adjusting for the rent 5 times my current for the same amenities.
We don't even need to be that frugal! 100% of the net increase to VHCOL compensation can go into VHCOL housing expense increases with plenty of room to spare.
If we would pay 33% of your income in LCOL housing, and move to someplace that pays us (net) 100% more, we can afford 4x(!) the rent we did previously.
We're bidding against everyone else who wants what we want, so it's no wonder housing is insane in the Bay Area, since household incomes are so much higher.
Uh my Zillowing suggests that you’re wrong. At least in WI - and what’s more middle American than WI. I’m talking even bumfuck, wi, where a hunting lodge with no plumbing and a woodfire oven for heating will set you back 100k. In Madison WI you are wrong nearly on an order of 10 (Comparing w 1990 prices).
> But unless you have the potential to become an L8 at Google (or equivalent), it makes no financial sense to choose to live in the Bay Area instead of Raleigh. It's like somebody who works as a back office bookkeeper insisting on buying custom tailored Seville Row suits for his work attire, then complaining that the costs of clothes has gotten out of hand.
Buying a custom tailored suit requires extra/better labour and materials, so it makes sense that the costs associated with it would be higher.
For this analogy to apply to housing, the cost of constructing and maintaining housing should be higher in the Bay Area too. However, almost all the increases to rent in urban areas has come from increased land values. This isn't a result of the landowner putting in "extra work" to make it better; they get to extract the added land value that the community created while putting in no extra labour or capital.
The fact that private landowners capture all this extra value the community created is not inevitable! It's entirely a result of the economic system we've chosen to stick with. There are solutions that are both more fair, and economically efficient [0].
Not sure that's true. L8 at Google is a total compensation of >$500k. You can afford to live on that in the Bay Area.
If you leave Google for a job in Raleigh, you're probably going to take a massive pay cut. Remember, the average SWE makes like ~$100k. It's not nothing but it's not that great either after you factor in a mortgage, car insurance, gas, utilities, food, retirement, and increased healthcare costs due to being on an inferior health insurance plan. At a certain point, you're better off at Google.
It seems to me that the places where cost of living is still low is places that people don't want to actually live. Whereas in previous generations regular people could afford to live in interesting parts of the country.
I tried to confirm this for Cincinnati. Zillow reports that the median list price/square foot in Cincinnati was $131 in March 2019. In March 2011, it was $82 (roughly $93.20, adjusted for inflation). That is a huge increase proportionally, and that's only going back 8 years. I would be shocked if the increase isn't more severe going back to 1990.
Cost per sq. Ft. may not have gone up significantly (adjusting for inflation) but if all you can get are larger houses (i.e., builders are not making 1300 sq. Ft. houses like they used to) then it really doesn't matter. See https://www.manhattan-institute.org/reevaluating-prosperity-...
You are so, so close to understanding the problem, and then stopped at the last minute. Are you arguing that SF should be only populated by L8s at Google? Surely not. It should make financial sense for teachers and cooks and Uber drivers to live in SF, because that's how cities work. L8s are great at writing design docs for obscure CI systems but what if I want a burrito?
> The demand for ultra-expensive housing in places like the Bay Area is driven by the huge earning potential of the high-skilled labor market.
Maybe the Bay area, but that's (sadly) not the case in places like Vancouver and Victoria. Sky high property prices, but no corresponding earning potential.
I've never quite been able to figure out what happened in Vancouver. It's a great city with a tech scene but salaries there seem very low (by American tech worker standards). Who is actually buying all these multi-million dollar bungalow? None of the senior-level engineers I've worked with from the area would ever be able to even sniff being able to afford that.
> But housing is not more expensive in the majority American metros
My parents bought their NYC home in 1976 for $76,000. Adjusted for inflation brings that to around $350,000 in 2020 dollars. The house is currently valued at $800,000.
Sure, but post-WWII the federal government injected billions (in 2020 dollars) into the pockets of mostly white veterans to build millions of homes. The federal government also provided generous home loans and unemployment insurance. Today, these policies would be viewed as socialist by the very people who benefited from it the most.
USA in 1945 was 91% white so it kinda makes sense that government did it. Homogeneous countries have no political issues with welfare because everyone is alike.
Unfortunately this is also where all the tech jobs are located.
And the reason most people live here is that it's extremely easy to move jobs. Yeah, Austin and Seattle have become the next locations, but we need more. Hopefully the remote work options because of Covid become more permanent.
I believe that, while still low relative to SF or NYC, home prices in Tampa and Phoenix have risen rapidly in recent years. As for Cincinnati, not exactly a thriving job market.
> I harp on this constantly. But housing is not more expensive in the majority of American metros. Adjusted for inflation the median cost per square foot of new housing is almost exactly the same as it was in 1990. (This doesn't even take into account that mortgage rates are drastically lower since then.)
It doesn't matter that real estate on the Moon is free. There aren't any jobs on the Moon, or in third-tier cities.
I remember our family of five children, two cars, pool (but above ground), most vacations were camping but we did make it to Disney World. We had lots of nice stuff as kids, but it was solidly middle class.
My mother stayed home while my father worked an eight hour day as an engineer at the local factory. He never worked overtime or weekends. All this with a bachelor's degree. My mother eventually went back to work so my parents retired quite early.
American workers have been conned into creating the very wealthiest people in the world by continuing to give up more and more earning power, every year, and for being more productive. Europe is slightly better thanks to good public benefits, but it has also gone in the same direction: making the wealthy far wealthier than they were in the past.
I can understand why this latest generation has little enthusiasm for doing anything extra at work. Good for them. Maybe things will eventually head back in the right direction for the middle class in developed countries.
I wouldn't say it's a con. In the end capital has bargaining power over labor because labor works for capital. Labor needs to organize very hard to take back control and that's difficult when everyone is scared they'll lose their job. Capital is able to make unilateral decisions because it's usually controlled by single/very focused and competent entity.
> Labor needs to organize very hard to take back control and that's difficult when everyone is scared they'll lose their job
It's fair to note that one party in the USA has worked very hard to break up unions. And it has worked. So it's not just labor vs. capital. It's labor vs. capital allied with the government.
it isn't just bargaining power or losing your job, it goes to the extent of lobbying gov'ts to be prolificly pro-business and anti-union, indoctrinating workers to view organizing as against their interests, and in some cases literally waging war against their employees
> American workers have been conned into creating the very wealthiest people in the world by continuing to give up more and more earning power
This pendulum seems to swing back and forth. The phrase "conned into" implies that American workers had some kind of choice and were lied to or otherwise induced to making the wrong choice.
That may be true, or there may have been systemic changes, not under the control of American workers, or there may have been choices made by other groups in American society (older workers, politicians, etc.), that led to the current state.
I wholeheartedly sympathise. My interpretation is slightly different. The working class aren’t giving up earning power as much as the western central banks are inflating it away with endless money printing and support of Wall Street that is supposed to trickle down to Main Street. It seldom does. Instead it’s used for stock buybacks and further entrenchment of inefficient firms that would have long collapsed in genuinely free market conditions.
I interpret the “capitalists are screwing the working class” as a) erroneous b) long-term dangerous c) convenient way for those bureaucrats to divide and conquer. Meanwhile they take risks with our economy without accountability.
> support of Wall Street that is supposed to trickle down to Main Street
> I interpret the “capitalists are screwing the working class” as a) erroneous
Isn't support of Wall Street fairly interpreted as support of the uber wealthy capitalists who benefit the most from this monetary policy and artificially boosted stock prices?
And what's stopping the capitalists from using some of that vast wealth to actually pay workers more?
> Instead it’s used for stock buybacks
Who benefits from this? Shareholders, right? Aren't the uber wealthy in the US and Europe getting the vast majority of their wealth thanks to capital gains via shares?
> genuinely free market conditions.
There good reason genuinely free markets exist nowhere in the world and nowhere in history. Negative externalities don't magically disappear all on their own. Privatizing profits and socializing costs is the natural strategy every company must adopt to remain competitive lacking regulations to prevent socializing those costs. It's simply far cheaper to pollute when you are allowed to.
I think people need to start realising just how incredibly much the government is now stepping in at each of these crises to make them as smooth as possible. But there is a downside to this. You are not allowing the normal economic effects to happen because you are wanting to keep everything as it is, but then guess what, the status quo stays, and anyone joining the ladder is finding it increasingly difficult.
What's amazing is how the narrative around this however is that we need MORE government to set things right. Yet in the tech bubble the government blew up the real este bubble, in 2008 all the banks got saved along with loads of other insurance and other businesses, and now we have the largest stimulus packages ever. (on top of government subsidised student loans, which have made loads of money available for college, pushing up prices).
It's counter intuitive but in the long run this is BAD for anyone that doesn't already have something. It inflates asset prices, it locks in people who already have something. It's bad for millennials. And millennials shouldn't be arguing for more government intervention, but less. Let things fail, so that the waste can get burned off.
Unfortunately it seems a lot of people think things literally need to be burned down for there to be change. But let's be clear, 30-40 years of interventions by governments did this, which is exactly what left leaning people want of government.
"millennials shouldn't be arguing for more government intervention, but less"
Your argument that government intervention is bad for millennials is flawed. Without government intervention such as eviction moratoriums, unemployment benefits and federal government stimulus checks there would have been massive homelessness. Prior to the pandemic 40% of americans could not cover a $400 emergency, all of these people would have been on the street without the government stepping in. At one point the unemployment rate as 15%. I cant really see how this would have been good for them.
I would argue that specific and targeted government intervention such as complete student loan forgiveness would have a massive beneficial effect on millenials.
Burn it down is always a mistake in hindsight. There is alot of low hanging fruit to fix these issues; higher taxes; amendment to fix Citizen's United; revamp the Supreme Court..
All of these are easier then digging a shaft, jumping in, and trying to climb out.
Speaking as someone who has no assets, no 401k, no home.
>Your argument that government intervention is bad for millennials is flawed. Without government intervention such as eviction moratoriums, unemployment benefits and federal government stimulus checks there would have been massive homelessness. Prior to the pandemic 40% of americans could not cover a $400 emergency, all of these people would have been on the street without the government stepping in. At one point the unemployment rate as 15%. I cant really see how this would have been good for them.
It wouldn't have been "good for them" but it will hurt a hell of a lot less than when (at some undetermined point in the future) things come crashing down so hard that the government can't prop them up.
We're preventing fire crackers from going off and eventually we're gonna get hit with a bomb.
Right now the Fed's back is pretty close to the wall in terms of policy levers it can pull. Imagine a financial crisis comes along in 2021 or something, we could really be screwed.
I don't really agree with that assessment. If there is mass layoffs for example, and renters can't pay rent, why would a landlord evict the tenant? Who is going to take their place? I think many landlords would prefer a potential to pay (owing rent) than full eviction and being forced to lower rent and uncertainty wouldn't they? I'm not saying there would be no evictions, but everyone homeless doesn't seem like a fully realistic outcome considering renting is a marketplace.
Eviction moratoriums, unemployment benefits, and stimulus spending is the least the government can do when they're the arbiters of who is considered 'essential' and allowed to work. The real question is what happens when the restrictions on evictions are lifted and people are inevitably evicted into a second outbreak.
Some programs benefit them but the things you listed were secondary interventions, interventions. If there was no stimulus and business stayed open that would have benefited them.
No, it's zombie companies kept alive by stimulus cheques, and management who get to stick around and failing companies that should have gone under 20 years ago.
Hm, maybe that's how the statement should be interpreted, but I was interpreting it in light of the "too big to fail" mantra after the 2008 recession. Lots of banks and auto companies were bailed out to keep them afloat. So I interpret it as "let companies go bankrupt".
Yes. It's the sort of take by people who have made zero effort to study history or economics.
"Keep the budgets tight" was the mantra in the early 30s in response to the depression. It took a World War that killed millions of people (and was -- surprise! -- a major artificial government stimulus) to get out of it.
Yes, providing monetary liquidity and fiscal stimulus during times of extreme stress is not purely good. It can have an effect of keeping some companies alive that perhaps should not be. That is bad and we should try to minimize it in the context of a recovery effort. But the fact that it's not perfect is not a reason to claim that burning everything down and creating a decades-long horrible depression in which many die of starvation, and that cripples the country, is a preferable alternative.
They think that if you let everything burn down then green shoots will pop up and everything will be happy and folks will rebuild and it'll be better and the government oughta get its snout out of our business and just let pure capitalism run its course and...
The issue is not really that the government is bad, the problem is it has become a proxy for ultra rich to push their agenda. You can probably make it more efficient by limiting corporate sponsorship and making it more transparent. Millennials don't have many options or tools at their disposal to influence the direction we are heading.
This might be unpopular, but they're not going to let major things fail because of political reasons. Popular opinion thinks the US is declining, and failures only add to that perceived momentum. That's why there's endless stimulus.
For letting major businesses fail, we really do have the resources to let those former employees do nothing but sit at home and use the internet all day and have no bills. But the US can't handle someone not working and still being able to pay their bills.
If we let large numbers of businesses fail, the people who have a lot of money now will buy up their assets and we'll come out with more concentrated wealth in society.
I will grant you that the federal government in the US could have done better in some ways by just sending out checks to every citizen instead of loans to businesses, but I don't think that's what you had in mind when you talk about less government.
> But let's be clear, 30-40 years of interventions by governments did this, which is exactly what left leaning people want of government.
You Unironically say this yet Trump (a very right candidate) is the one pumping money into the economy to save his election chances.
The reality is each party wants to spend money where it feels it is important. Republicans/right wingers have given up fiscal responsibility a LOOOOOONG time ago.
Capitalism did this, governments intervened when it became necessary to prevent things from effectively burning to the ground because the market can’t/won’t fix it.
Letting banks burn down in 2008 would no doubt have been a cathartic moment, but it would be pragmatically a poor decision. Immediately post-crisis those responsible should be held responsible and actual action should be taken, but we don’t elect governments to lead us and then have them do nothing in a crisis.
I live downtown in a coastal city. What I’m seeing is a lot of young men living in the streets. This is the other side of this story some young adults don’t have a home to go back to after job loss and eviction.
We’re seeing just the tip of the iceberg. I expect a lot more social upheaval in the coming years. Social services are going to get severely strained.
I've seen a documentary about San Francisco it's crazy how middle income people are being pushed farther from the city. One teacher had several bus transfers and then a long walk to get to her job. Even bus stops where "poor" people (less than $100,000/year) are being crowded by private buses like Google forcing city buses to wait which adds to the wait down the line. Nuts!
California: Tax the hell out of people who need to drive because they can't afford to live near prime transit locations. Then be subjected to such transit which is unsafe, unreliable, and unpleasant to say the least.
I’m a renter. Do I need to prove I’ve lost my job to not pay? Do I get to skip out on paying for a luxury apartment if I have money in the bank? Does my landlord get to skip her mortgage? Or only the portion paid by my rent? What about the bank who holds the mortgage? Or the retired bond holder who ultimately gets the mortgage payments?
Every step along the way requires somebody to not get paid.
If the government intervenes, at which step should they do it?
I’m not saying no actions should be taken, just that it’s more complicated than pure rent forgiveness. Perhaps the answer is some kind of short term UBI, but that gets expensive quick. Zero interest government loans puts the burden back on the individual. I’m not fully clear on how to beat balance individual ownership versus protecting the system from collapse. (The latter involves propping up the banks)
> Unless we just forgive rent until a vaccine is out, many people will never catch up.
If 'we' forgive rent owed landlords, will 'we' also forgive the mortgages those landlords owe the banks? Will 'we' also forgive the obligations the banks which owe to other banks and their investors? Will 'we' also forgive the obligations those investors owe, for example to pensioners? Will 'we' then step up and pay for those pensioners' food and … rent?
An economy is a gigantic web of interlocking relationships. It takes years (one might even say centuries!) to build and develop all of those, but it takes far less effort to destroy them. It is computationally impossible for anyone to understand all of an economy, and thus impossible for anyone to make good decisions on behalf of an entire economy.
If we are worried about folks without resources, we should give them some. Yes, that runs the risk of encouraging those who want to get those resources (e.g. student financial aid encourages the growth of the academic industry, mortgage assistance encourages the growth of the real estate industry &c.): we should probably just give the poor some amount of money and let them make their own decisions about it. Call it unemployment or UBI or whatever.
I grew up on the farm, but have spent most of my adult life living in big cities. But I take a month or so home most years for a bit of farm work / harvest celebration.
Corono got me good traveling SEA in February, and have been now living and working at home since March. I could have never thought about living here beforehand. At least I always think that twenties and thirties are for the movement of the city, and then the farm work / home life can begin.
But having been somewhat forced to force myself to settle for an indefinite period, it is giving me much appreciation for a different kind of life. Building stuff, farming and a lot of cooking / baking / fermenting has brought out a real positivity, which now seems impossible to find in the city.
It's even got to the point where we've started inviting friends to come and live and work with us, and there seems to be that community feeling bubbling up all around.
Commuting and travel seem so weird to me by this point, and I know that the logistics are hell to try and rearrange the entire economy to be kind of segmented, but I'm starting to believe that this is the only realistic hope we have left.
Don't let the awesomeness turn to pessimism! The gap between "this is great" and "this is the only realistic hope" is huge. Others - even outside of farm life - have found community too.
I guess it wasn't worded clearly, but I meant that it's the only hope for a less wasteful economy.
EDIT to add: In the short term! Right now the infrastructure is totally oil based, and consumerism relies on ecological destruction. But I am definitely not saying that we can't have a global zero carbon everything you want economy. But that is a question that I do not have the patience or information to ponder seriously!
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> I'm a dad who is happy to have his daughter and fiancé living with me. They pay the utilities and make me nice meals, and it makes it a lot less lonely here. ... I like the multi-generational thing. I know it won't last forever, but it makes life better for now.
It's so easy to get into that cold statistical mindset about these large-scale trends, but it's good to remember that these statistics are the aggregation of a large number of very human stories.
The idea that having a multi-generational household means that the younger members haven't "grown up" and need to "learn to live on their own" is a completely manufactured attitude. I think many American families would have much stronger, more healthy inter-generational relationships if we lived together (at least for a bit) as adults. As it is now, most US kids leave home just when they're starting to be able to meaningfully contribute to the household as equals.
(Having said that, I definitely feel the pull of childhood and societal expectations. When I was a new adult I was thrilled to be out of my parents' house, and could never have imagined moving back there. I'm nearly 40 now, and thinking about the possibility of living in my parents' house during my 20s still feels weird to me.)
In my experience (talking to people from a variety of countries), most couples in their 20s/30s want their own place (even in the countries where it's not common). It seems it can even lead to happier intergenerational relationships when the roomate-type fights don't need to happen.
It would seem to me that it's most common in the US to move out because they can afford to... The US is just an incredibly rich place, even compared to much of western Europe (ex. the US has 40% more GDP per capita than France[1])
There are of course also family/social pressures in some places, but I really don't think it's the primary factor in the differences between many countries.
[1] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)...
There's more to it than just learning to live on your own. In the US, we value individuality above all else. People who never move out and forge their own path in life are far less likely to find out who they really are and what they really want out of life. Whether you're aware of it or not, staying so closely attached to your family can massively stunt personal growth. You are constantly reminded of who and what you are "expected" to be, rather than defining that for yourself. You can see this very clearly by going back to your hometown and talking to the people who never left. Sure there's value in the stability and comfort of that life, but you lose out on the opportunity to truly express yourself and be who you want to be.
My parents are good people, there was nothing wrong with my home environment. But it's more important that youth learn to act like independent adults and take responsibility for their own lives. Staying at home too long causes learned helplessness. When there's no one around to help it's sink or swim.
Not only is there no multi-gen homes in our area (exurb an hour away from a major city) but it's difficult to find a layout where a part of the house can be a mini apartment or her own personal area. It seems like more basements are finished now and some of the design decisions have been quite odd to say the least.
Worst of all is that we're not allowed to buy some land and throw a small structure or trailer/rv on it for her. Even though it's for family it's not allowed as it could be rented out in the future.
The entire process has been stressful and aggravating, and is made worse by everyone sharing the same space working and going to school.
So, without making any judgements about how people want to live their lives, I think it is a negative for the US that more young people are living at home.
How do you have a grown up, likely physical, relationship with your partner... when your parents are sharing the same rooms? Do you just hide in your bedroom the whole time?
How do you develop your own relationships and life and way of doing things and way of raising your children, inside someone else's house? I can't understand that but I'm open to hearing about how.
The difference is the prudishness of US culture. Those couples are living life as a couple. In a US household they would be treated as kids, with many parents not allowing them to even share a room.
I don't like what the title tries to suggest that living with your parents is something wrong/abnormal?
Why is that? I understand for many it is not a choice, but it doesn't necessarily meaning people are suffering as a result.
Is there any reason to believe this is due to a cultural shift amongst Americans? I don't believe it is controversial that the young have been the most negatively impacted by rising education and housing costs, as well as their demographic being the most heavily impacted by the Covid-19 pandemic. (is it?)
The implication here is that more young adults are staying at home, not because they want to, but rather because they cannot afford to leave (or in some cases, as the article mentions, because it is better than being isolated at home alone). I hope you agree that this is an important distinction.
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Usually any mention of living with your parents implies being lazy ( the whole "neckbeard living in their parent's basement" stereotype ) unless you qualify it with "but I pay rent". If you pay rent then it appears more like you can support yourself and still not relying on mom/dad to pay your way even in adulthood.
The title doesn't suggest anything, it just states an objective fact.
[p.s. one fine day, the internets will unequivocaly sing the same song, with not a single person suffering from misunderstandings. That fine day, HN will do away with anonymous downvotes, since we will be in a state of perfect harmony.]
After graduating college and finding a good job, he went to get a roommate and move out. His parents were horrified. "Why are you going to move out of your family's house so you can pay money to live with strangers you found on the internet?".
At first we all laughed because it seemed like a case of immigrant parents no getting how things worked here, but the more we all thought about it, the more the parents seemed to make an excellent point, and one none of us had really considered.
Not sure when families living together became a sign of failure rather than a sign of a close family.
I moved back in with my Dad with my husband. I'm 32, hubby is 30. He had two strokes and my little sister didn't want to be the only one nearby. It's been 6 months. Is it the easiest? No. But it's amazing to have this day-in-day-out time with my Dad again after not having lived at home for years.
My older sister moved back in with her husband and two kids for 2 months as she studied for her medical school USMLE exams so she could take advantage of the free baby-sitting.
Neither my sister's family or my own would've made this decision without the pandemic. My husband and I were both pushed remote (same salary) and my sister's child care plans went up in smoke.
While 2020 has been shit, moving home in some cases isn't an indicator of a problem. It's just a smart reaction to the new reality of working from home.
I'm a 90th percentile earner. Will 95+ percentile earner in a few years time. Yet it feels like I am not as well off as I should be. I don't live in an expensive area either. Yet I need to save so much money to even have the opportunity to buy a house. Then I also need to save a tonne of money for a nice retirement as government pensions get absolutely gutted.
I'm not going to pretend I won't have a good amount of disposable income even after maxing my pension contributions and paying a mortgage. But it just annoys me that I'm a relatively high earner and yet the money won't go very far. The most expensive thing I'll ever buy would be a brick box, and one that's not even as good as my parents.
This is in stark contrast to my house. We have two iPhones and get new ones every 2-3 years. We have two iPads, 3 computers, and gadgets galore in a house of 4. My countertops are stone, my appliances are stainless. We go on vacations yearly that require planes and hotel, and used to eat out often. I have a house cleaner, and pay for an expensive gym.
I realize I may not have the house my parents have, but I have nicer things. I make more money but I spend it very differently then they did. There was basically nothing we bought that compares to an iPhone every 2-3 years. I know so many people who travel regularly, and don’t seem to realize this was rare 15 years ago. I really feel we spend our money differently.
I say this as someone in the same boat, who could/would/will casually afford to buy an expensive home under 30.
The median net worth of millenial families (35 and under) is $10k. Probably trends negative if you filter down to people below age 30 only.
Everything that requires local labor is very expensive (partly because our expectations and requirements increased, we are willing and able to spend more, so a very high equilibrium point formed), everything that can be mass produced is cheap. (And not just because externalities are hidden, but because technological progress.)
It wasn’t as rosey as it is often portrayed.
You mentioned you had a house. I'm fast approach the top 1-2% by income and think I can maybe swing a 1 bed apartment. It'll be borderline. Not house...apartment.
...no idea what the other 98% of my peers are doing but they sure as hell aren't buying houses. Meanwhile all the landlords I've rented from thus far where a generation older and had entire portfolios of properties.
Pretty sure I'll come out on top of this because I'm doing well, but can certainly understand the disillusionment of the younger generation
Everyone seems to think the oldies had it easy in the good ol' days and the youngens are a bunch of lazy good-for-nothins.
There are probably certain a ways it has gotten easier and others in which it is worse... But I think this is more about generational sentiment than actual facts.
This rarely matters unless you are looking to sell or borrow against.
> We had interest rates peaking at 15%.
But inflation was higher at the time. Also rates are 0% now at the Fed level, but if you are a consumer you are going to pay a bit depending on your credit score.
> I didn’t have student loans but only because I didn’t go to university, just like 90% of my peer group.
The governments (it's really a global phenomena) pushed the general public into universities. It's hard to blame the students when you take that decision at a very early age 17-19 and most of these youth doesn't have any life experience.
> Unemployment was much higher than it is now
I highly suspect the current unemployment rate is meaningful. To be counted as jobless, you need to register with the local employment office. It's possible today's youth no longer rely on that and use modern alternatives instead.
> schools were teaching subjects for obsolete careers
They still are.
> It wasn’t as rosey as it is often portrayed.
It was not. The only difference really is land and housing which was significantly more affordable and did matter less where you lived. Now you need to live next to a "jobs-hub" that have insanely high rent and purchase prices.
The combination of artificially low interest rates with significant inflation in particular make housing spectacularly unaffordable. This combination simultaneously pushes up the costs of housing due to asset bubbles forming while reducing the ability of people who earn money to save for a down payment on a house.
But my wife and I are double earners, unlike my parents. And we both have really good jobs. We don't have it hard, but we don't drive new cars either; we've got a second hand Prius. The only sign that we've got it good is that our house in Amsterdam is not as tiny as most.
But I also wonder if maybe our expectations may be too high due to the constant stream of luxury lifestyles that we're being fed on TV, in movies and on other media.
I probably make 3-4X what he did at the top of his career, and am kind-of hanging on to a house with a tough mortgage and a no-frills lifestyle. My Millennial and younger colleagues' financial lives are even more of a disaster.
I remember when someone reported that GenX was the first generation for a long time whose finances were expected to be on average worse than the previous generation. It looks like this trend has continued at least 2 or 3 more generations. It's not a blip, it's the new actual trajectory.
A vague quote comes to mind, something about the peasant classes of a few hundred years ago would have overthrown the ruling classes a lot sooner if they had any idea the luxuries the ruling classes were enjoying.
I.E., maybe what's happening is thanks to TV maybe we're finally understanding how good some of those on the top have it.
Do you have any data that support this?
It wasn't a particularly palatial house, but the mortgage would have been paid off before retirement.
But this is a direct consequence of a rent-seeking economy which uses property rights as a proxy for political influence. The British economy started being converted from an industrial economy to a patrician rent-seeking speculative economy in the 80s, and the result was massive asset price inflation in property and shares.
This wasn't an accident. It made a certain kind of person extremely rich, and most other people increasingly poor to varying degrees.
Unless there's a change in strategy - unlikely - you can expect the wealth concentration to continue in the UK, with increasing danger to the personal circumstances of any kids you have - if not to yourself if there's a serious downturn.
Even a 95%er is in danger of losing their property if they lose their job for an extended period if they don't live off speculative investments and rent.
It's the same in the US.
>Even a 95%er is in danger of losing their property if they lose their job for an extended period if they don't live off speculative investments and rent.
I fear this the most. My husband and I make more money than the rest of our family combined (both mothers, both fathers, 4 adult siblings, their spouses), but I still feel uneasy about the future. Maybe everyone worries more during uncertain times, but being mid-career with savings/investments I never thought I'd be concerned about losing everything.
I imagine it's only going to be worse for my kids.
Every price is an exchange rate. If things cost more, it's because your income gets less stuff.
$10 for Nextflix, $90 for Amazon, etc. On top of Gas, Electric, Phone, Internet, Car, Insurance, Gas, etc.
It's easy to watch the money flow in... and right back out.
Also the interest rates vs asset prices thing other commenters have mentioned isn't helping.
What's especially worrying is that if I'm "doing well", and I'm so screwed, what's going to happen to the rest of the population below me?
I never had the money to take my kids on nice vacations every year like my parents did. Also never had the money to justify buying a new car. And while I do have a home, I have no hope of paying it off before retirement. (which, as an engineer, in the USA, could be 1-5 years from now, involuntarily - my father worked for the same company his whole life, while I've had to change jobs 6 times, due to either corporate buyouts or layoffs. NEVER had a bad performance review).
All of my kids, my brother and sister's kids (all in their 20's now), are all very much struggling, barely making it (and in a couple of cases, NOT making it). Only ONE of them (my son) got through college and found a reasonably decent job, and even HE is so bogged down with student loans, he may never own a home.
So as a picture of 3 generations, there's a very clear trend.
I don't know what you earn but if you are early 20s it might be less than that. There is a lot of money floating in London, the price of homes almost make sense when you realize what the top earners actually earn, the few percents competing for the same homes.
I’m generally a pro-market person. In the case of UK real estate, I support a ban on non-residents buying property similar to what Canada have.
> I'm a 90th percentile earner. Will 95+ percentile earner in a few years time. Yet it feels like I am not as well off as I should be.
You should correct your attitude then, don't you think? You are a 90%ile earner. I don't know what "should" implies, but put it in terms of where you "are". You'll be happier.
How much is that in the UK?
Those same migrants increase labor supply (thus lowering the equilibrium price) and increase demand for land and real estate.
The end result is high taxes and high real estate cost. Of immense benefit to your dad (and other Baby Boomers) who receive risk-free pensions, and supercharged capital gains for their own assets.
Disclaimer: I’m an immigrant.
https://taxfoundation.org/us-federal-individual-income-tax-r...
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Historically rate of taxes were not much different than they are now, whether for North America or the UK.
Net wage on that is £40,543, so that's 26% tax.
Local taxes would be about £1200 a year (council tax - a property based tax), so call is £39k -- 29% total tax.
In the US a 90% income is $117k gross. Take home pay is 88,866, or 24% tax, that's after Federal Income Tax and Social security
On top of that there's local income tax, picking a random state -- New Mexico -- that's $4,856, leaving about $83k -- 29% total tax.
So seems that UK and US taxes are about the same, but in the US you have to fund your own healthcare.
> "While moving back home during the pandemic makes sense and is seen as socially acceptable or even smart, it also means you are living with people who still see you as your 18-year-old self."
One of the biggest things I’ve noticed among millennials is how many parents fail to understand the emotional and mental situation of what their children are currently experiencing. I feel so incredibly lucky that my parents understand that I’m not 18, and they’re happy to help out during these uncertain times. I’m so much more productive working from my parents house because I now have enough space for a decent home office.
I also have coworkers that have openly talked about how their parents refuse to let them move back in during the pandemic, citing the “time to grow up” mentality. I’m all for taking personal responsibility in one’s life, but there are a whole lot of older people out there that are oblivious to just how serious the pandemic has been economically.
This is crucial to understanding:
- The immediate distress of young males. They have no chance of seducing externally if they don’t have moral support at home. Explains the billion of 9Gag posts about young people who fall addicted to gaming and joke about virginity and lack of self confidence, who joke about the thing they know they’ll fatally become. They’re stuck in a bad place in life.
- The rise in what all Democrat fans would call “Extreme right”, which they don’t understand is just people who we’ve abandoned, who count on no-one because no-one cares for them. Isolation and individualism goes hand in hand. I keep telling my leftist friends if they want solidarity to triumph, they can’t just focus on women-at-the-workplace, one day they’ll have to face the men-at-the-game-addiction-station question. Especially if they want a cohesive society.
Living with the parents isn’t the best way to get social interactions, unless it is a venue where they can be for _caring for others_. Because young men are especially deprived of places where they can care for someone, women being very independent nowadays, especially in their 20ies. And caring for someone is the blood of the soul.
"The child who is not embraced by the village will burn it down to feel it's warmth"
I think you put that very nicely.
I think I understand this problem, and I have empathy for these men (it also took me a long time to get my first relationship, I know how it feels). I just don't know what the solution is. Their frustration might to some extent be caused by the independence of women (where women now may prefer to be single than to be in a relationship they don't really want), but I don't think it's right to hold back on women's emancipation in order to make men feel better about themselves.
What exactly is the right's suggested solution here (I ask this out of genuine curiosity)? Today's mainstream right looks at these frustrated men's hardening hearts, and all it seems to see is an opportunity to accelerate that hardening for political gain, by convincing them that the source of their woes (and the rightful targets of their anger) are immigrants/feminists/protestors/... I'm skeptical that we should expect any workable solutions from there.
Also, as a side note, why do you feel the need to use quotes around "Extreme right"? Do you disagree with labeling rising movements like QAnon and incel/blackpill subculture as "extreme right"?
I actually had to come home when I was in my early 20's. I spent my high-school and post-secondary years pursuing culinary arts. It never dawned on me to actually get a job in a commercial kitchen until I had my culinary degree due to the fact that I worked thru school as a finish carpenter and made a pretty good wage for a 18-19 year old kid. Anyways with degree in hand, I set off for New Orleans to make a name for myself as a chef. From the moment I got into a commercial kitchen I realized I had made a big mistake, while I loved cooking, being a chef in a commercial kitchen has little to do with actual cooking. So I came home hat in hand with no direction, went back to carpentry while I regrouped, the entire time my grandfather (I was raised by my grandparents) kept saying you know you really have a knack for programming those computers. I always viewed it as a hobby but folded to his suggestions and took a job at a local shop doing custom business software. This was the dawn of the internet, so there where still small shops doing desktop software for small businesses. Anyways the rest is history but the point being, is I knew I could come home, I could not imagine not having that relief valve as a young person, especially in today's climate.
I feel that this is the case for many people and in other contexts. If you develop a lot during say two years of employment, then depending on who your manager is, you may still be seen in the same way as when you started.
There is an inherent poetic dilemma with reconciling yourself with how you age. Parents can buffer this change, whether for positive or negative effect.
Get a job? Why? Go to school? Why? Things are fine. I have someone to cook my meals and a warm bed to sleep in.
My uncle ended up booting my cousin out of the house. It was the best thing that happened to him. He matured significantly, went back to school, has a great job. He even admits it himself that he was in a rut that would have never ended had he been able to keep living at home. Living at home sheltered him from the real world.
The fact that it's somehow related in American culture is very unfortunate.
My sarcastic response is that I hope they enjoy the retirement home their kids put them in in the future.
I don't actually mean that, but just to make a point...
Rents have risen a lot since then, but is it really impossible for someone in work to be able to afford rent? Or are they insisting on living in a fashionable part of town? (For me independence from my parents was quite a high priority in those days).
The challenge has been maintaining my sanity. My previous apartment was small and didn’t have space for a good home office setup since I never expected to work from hone when I leased it. Additionally, I was having little social interaction due to the pandemic since Texas wasn’t doing a good job preventing spread early on.
My other reason for moving in with my parents was that my company did a lot of business in the travel industry and I feared layoffs. Not having to worry about my living situation while looking for another job in the midst of a crisis was a huge relief in my mind. Fortunately, I’ve been able to stay at the same company so far.
If being independent is the absolute most important thing to you, that’s great. But I’d argue that America’s individualistic culture is one of the biggest reasons we’re struggling to get past this pandemic. People demand the right to ignore basic public health requests, and it’s a major problem.
https://www.cbpp.org/blog/census-income-rent-gap-grew-in-201...
While I’m sure they’ve gone down a little in certain urban cores, like SF, they remain absurdly high in the midsize, Midwestern city where I grew up and now live. When I moved back, apartments here were going for only a bit less than what I paid in Los Angeles and seem to have not gone down at all. Home prices also remain artificially high because there are less listings and more interested buyers.
Yes. I've seen what my younger sisters and exes earned working in London in jobs like waitress or saleswoman or law.
The salary simply doesn't cover rent and bills for a one bedroom. It doesn't matter how you put it, it just doesn't work.
That's the equivalent of £828 a month now. Bills were included.
You can actually pick up a studio flat for £737 in the same area, which actually looks better - it's about 60 square feet which I think it a little smaller than the one I had, but it has it's own toilet. Council tax is on top of that at £45 a month, but still fits in the budget, just.
Assuming the same 50% of take home wage in rent, or a net wage of £1500pcm, would be about £21k/year
My £17800 salary in 2003 would be £28,300 today, or net of £1900pcm, so could afford (on the same ratio) £910 a month, which gives you a fair amount of choice at the moment in W14 according to rightmove.
I'm surprised as I felt renting was far harder now than 20 years ago, but seems it might be slightly better. Of course rents on tiny studios are presumably depressed because of covid19, I'm not sure what they were this time last year.
I harp on this constantly. But housing is not more expensive in the majority of American metros. Adjusted for inflation the median cost per square foot of new housing is almost exactly the same as it was in 1990. (This doesn't even take into account that mortgage rates are drastically lower since then.)
We get skewed on this for two reasons. One is because homes today are substantially larger and have more amenities than they did in previous generations. We take for granted better fire safety, higher ceilings, central A/C, higher load electrical circuits, attached garages, better lighting, and swimming pools that are much more common in new construction.
Two is that we're highly skewed to a handful of elite metros, whose housing markets are not representative of the country as a whole. Housing is expensive in San Francisco, New York, LA, and DC. But in places like Tampa, Omaha, Cincinnati, and Phoenix the cost of housing (per square foot) has barely gone up at all.
The demand for ultra-expensive housing in places like the Bay Area is driven by the huge earning potential of the high-skilled labor market. (Of course the supply side of the equation is driven by NIMBY zealotry.) If you're talented enough to make it as an L8 at Google, then it probably does make sense to buy a house in Palo Alto. You'll earn far more money than you would in the St Louis tech scene. more than enough to make up for the living costs.
But unless you have the potential to become an L8 at Google (or equivalent), it makes no financial sense to choose to live in the Bay Area instead of Raleigh. It's like somebody who works as a back office bookkeeper insisting on buying custom tailored Seville Row suits for his work attire, then complaining that the costs of clothes has gotten out of hand.
Right, but what matters is the housing price where people are. It doesn't matter what the housing market looks like in South Dakota if I don't want to live there. While houses in South Dakota may be 1/10 the price of houses in NYC (likely cheaper, honestly), they also have 1/10 the population. The notion that the quantity of land somewhere (in this case, quantity for sale) should somehow equate to importance more than the quantity of people is ridiculous.
> It's like somebody who works as a back office bookkeeper insisting on buying custom tailored Seville Row suits for his work attire, then complaining that the costs of clothes has gotten out of hand.
No, it's like someone who works as a back office bookkeeper in New York City being forced to pay insane amounts in rent while seeing thousands of empty AirBNBs, hotel rooms, etc. and complaining that the cost of living has gotten out of hand. Housing is a necessity, "custom tailored Seville Row suits" are not. And it's simply not feasible for the vast majority of people living paycheck to paycheck to just up and leave to Raleigh like you imply.
We're not talking about houses in the middle of nowhere. These are major urban population centers.
The Houston metro area has 7 million people. The Phoenix metro area has 4.9 million people. Tampa metro has 3.1 million people. Houston and Phoenix are both larger than the Bay Area metro is currently. Tampa's just shy of the size of Seattle.
Nor is it the case that these are depressed areas with hollowed out job markets and no opportunity. They all have substantially lower unemployment rates than the national average. Well below the Bay Area in fact. All three of these metros have large-scale employers with plenty of high-skilled jobs. All three have economic growth rates and business formation rates far above the national average.
There was a time where people would move countries with nothing but what they can carry at a chance of improving their life. At a time where the only way to travel was by boat for weeks and the only way to communicate to relatives was by mail.
Now we balk at the idea of moving cities when it's easier than ever before, and we can communicate instantly across the world.
To be clear, it's not just "Raleigh" or "South Dakota", it's really any city outside of California + New York. I live in Richmond, an hour and a half from DC, and you can buy 2000 sqft homes for 200k.
Doesn't really feel like cost of housing is what's changed.
What matters is where HN commenters are, because they are controlling this discussion. Let's not pretend that upvotes here are representative of the wider population, or that the average populations' opinions are well represented here. No, you did not imply that, I'm not attacking you or anything, but I figured it should be said lest we delude ourselves.
> I don't want to live there
Isn't it great that the increasing wealth in society gives us the idea that we can pick and choose anywhere in the country to live and then expect to buy a house there? This was not exactly the case for my (grand)parents. My family came from Buffalo, moved to Phoenix, and settled in the Seattle area(long before there were Amazon jobs, when the PNW was a refuge for weirdos). Imagine how silly it would be if the majority of the US population thought they were entitled to a house in a "tier 1" city.
But then you are choosing to be poorer. And that can be a valid choice, but it is a choice you are making.
Housing is a necessity, but a large detached house in a specific location, is not.
Maybe if you stop looking at like 2018. But my on-the-ground analysis living on one of these cities is cost of housing has fucking exploooded. I built a house just two years ago, which I thought was incredibly expensive at 2 times the median home price in the area. I had it in the back of my head that I was insane to pay so much for a house, but since I could easily afford it, I went ahead with it.
Now, the median price has shot up by 25% and there are literally no new houses available for what I paid. My neighbors are relocating after only a year in their house and sold their house for 20% over what they paid new. The new construction 3 miles down the street from me starts at 30% more than what I paid, and a few are double or more. Meaning, 3-5x the median for the area.
All of this is trickling down to the rest of the area. Houses that went for $130k in 2015 have sale prices in the $200k range. We're talking 60s era ranch houses that haven't been updated since the 90s.
A recognition (debate, but at least some recognition) of what is called "The Missing Middle" (medium density housing, alternative options, not just SFHs and "high rise").
A proposal is put forth, and there are screams from homeowners, because the study shows that the Average Property Value in the urban growth area will _slow_. Not decrease. But instead go from 12% YoY growth (which is insane) over the past 10 years to, if all measures are put into effect, an estimated 7% YoY growth.
Somehow these homeowners have got it into their head that they "have a right to" property value growth which, at its worst, will outpace inflation _by a factor of TEN_.
So back to the drawing board we go...
But so far, that hasn't really created a housing affordability crisis... yet. A lot of the impact has been mitigated by falling mortgage rates and rising wages. Let's just take Tampa, as one of the hotter housing markets. Since 2014, median listing prices have gone up 57%.[1] Adjusted for inflation[2], that's 49% real price growth.
But over the same period, average mortgage rates have fallen from 4.49% to 2.95%[3]. Meaning for the same house cost, the monthly payment on a 30-year fixed mortgage has fallen by 18%. In addition national median incomes have gone up over the period by 10.5%[4]. (And almost certainly more in Tampa specifically.)
Therefore housing affordability has only declined by about 14% for the median household in Tampa. All during an extremely hot housing market. Again, that's still indicative of some recent bad NIMBY policies. If housing supply was perfectly elastic, things like lower mortgage rates and higher wages would benefit consumers instead of inflating property prices.
But there's no indication that housing has become drastically more expensive in "flyover country". This conclusion can be spot checked by comparing national consumer expenditure surveys over time. The percent of after-tax income spent on shelter has actually slightly declined from 17.8% to 17.0% during the 2013-2019 period.[5]
[1] https://www.zillow.com/tampa-fl/home-values/ [2] https://www.bls.gov/data/inflation_calculator.htm [3] http://www.freddiemac.com/pmms/pmms30.html [4] https://fred.stlouisfed.org/series/MEHOINUSA672N [5] https://www.bls.gov/cex/2019/standard/multiyr.pdf
Here is the data adjusted for constant 2020 dollars:
1) They are skewed by a few 'elite' metro areas (which are best avoided by those without very high-paying jobs).
2) The houses are nicer and have more 'features', which cost money.
And that if you remove the high COL areas, and control for the amenities, you will find costs are flat or decreasing.
It has increased even faster than average housing costs. To be fair, that's is expected because rich people don't spend the same percentage their income on housing as most other people.
Grows in expenditures does not immediately imply growth in costs.
Historically a house in the US cost around 3 times the median annual income. During the housing bubble of 2006 the ratio reached 4.5 - in other words, the median price for a single family home in the United States cost 4.5 times the US median annual household income
I think cities are fundamentally the wrong unit to look at when thinking about housing prices.
What we really want to know is "how much does it cost to live some place where I can get a job". Knowing that Tampa is just as cheap today as it was 40 years ago means little if Tampa today has, say, only 70% of the jobs that it did back then.
What we really need is some sort of normalized "job availability unit" like "per capita" but "per employment opportunity" and then try to calculate current and historical housing costs relative to that.
And we'd do well to price that in hours of work per week after taxes, including commute.
That is, making $30 an hour where a house is $300k can be better than making $60 an hour where a house is $600k . Think about progressive tax rates, CoL, commute time et al.
> homes today are substantially larger
Is there any availability of smaller homes in actual markets? If I'm a buyer in the market do I even have the option to buy a cheap smaller home?
Here in the Philadelphia urban real estate market —- which has no shortage of reclaimable housing —- the break-even point for builders is about triple the value of the existing homes. No current resident can afford to buy one, so single family homes get converted into tiny “luxury” condos.
[Edit: there are city subsidized ‘tiny-housing’ developments but these are more for welfare recipients than regular buyers.]
[0]: https://www.supermoney.com/inflation-adjusted-home-prices/
I have noticed that most of my fellow millennials seem to have completely forgotten the concept of "starter home" and assume that as soon as you turn 25 you should be entitled to a 4 bedroom house with a pool, huge yard, wonderful neighborhood, three-car garage, etc.
Among my friends that have bought houses, many of them have gone into significant debt just to buy a 3-4 bedroom house, even though they have no kids and only use one of the bedrooms, because they think that at some point in their life they will put them to use. The extra rooms go completely unused (other than the extra furniture which they also went into debt for). It's like they see the house that their parents own and assume that their house also needs to be that, and ignore the fact that their parents probably started out in a much smaller home and then moved into a big one once necessary.
>Two is that we're highly skewed to a handful of elite metros
I contend that it's not even just this, but also that within metros millenials are highly skewed to a handful of elite neighborhoods.
I live in a medium COL metro, and all of my friends constantly lament the "high" cost of houses and how they will never be able to afford a house. But when I ask what houses they are looking at, it's always the nicest, premiere neighborhoods that have McMansions with huge yards, white picket fences, hip restaurants within walking distance, etc. Not a single one of them even considers living in the many much cheaper neighborhoods.
There certainly are issues with prices in some areas (cough SF cough) but at least in my metro and in my friend group, the "houses cost too much" meme seems to be a scapegoat for what is really just an inflated sense of what housing they are entitled to.
I don't know where you live but I almost find this insulting.
I'm from Amsterdam my self and friends of my are being forced out the city because of the high rent prices. I'm 32 year now and because of some shitty new rent laws that says every tenant needs to have an individual rent contract which our landlord refuses to give I'm also being pushed out of my home. I tried to find something for my self just anything would do, but I'm kinda skewed because I just earn above social housing and here in Amsterdam there is not really a market anymore for middle incomes. So yeah I'm being pushed to either live in a room or move out of the city. But I also couldn't find a room in time so now I'm going back to my parent. So yeah your comment kinda hits a nerve for me.
"Starter homes" for young people is the stuff that was built 30-40 years ago that hasn't been updated. So they are buying those mcmansions because that's what was built in the 80s-90s-00s. The really nice, older urban areas with housing built before that is way more expensive in absolute dollars.
Smaller is not cheaper in most cases. Smaller is "established" and everyone with money wants to live in those established neighborhoods, not the suburban sprawl 50m from the city center.
This ends up being reflected in renal prices. My building has a 578 sf studio @ 1515$/month where a 751 sf 1br is running $1,625/month. Add in parking and your talking 30% more space for 7% more rent.
It’s not that the actual cost per SF is equivalent, it’s that housing got upsized without much input from consumers.
Are you sure your friends aren't just being rational? I thought about the rent vs buy thing pretty constantly in my 20s and always came down on the rent side. Not because renting Dwelling A would be cheaper than buying Dwelling A, but because I was happy living in Dwelling A (a nice-ish 1-bedroom apartment) but if I were to commit to ownership I'd want Dwelling B (at least 3 bedrooms). Life can change fast - you're not sure which fling will turn into a spouse or when a little one will come along or when you'll really need a home office. Selling a one-bedroom condo is obviously doable, but transaction costs are fairly insane on real estate, and it seems like low-end places (like 1-bed condos) haven't historically experienced the same appreciation as standard houses.
It sounds like your friends could get by with a Smart car but bought a Toyota RAV4 instead. And when they decide to trade up to a Tesla in a few years, they might find that the RAV4 retained value better than the Smart car, because that's what "everyone" wants!
I was one of these people who was conservative and bought a small cheap apt starter home instead of a 3-4 bedroom house. 10 years later I can't afford a 3-4 bedroom house because they've gone up in value so much so I'm still in my apt and its crowded.
Looking back and what would have been optimal I should have bought a huge house as soon as possible, probably a couple of them. That way I could retire by now.
I would never recommend the idea of a "starter home" to anyone, ever. It only works when housing prices are on the rise and continue that way the entire time you live there.
It should be noted, they don't build 2 bedroom homes anymore. I was talking to a real estate developer in Sacramento about this. New 3 bedrooms do exist, however, they would rather cram out the lot with a 5 bedroom since the cost to add on another few hundred square feet is nothing if you have the equipment and material right there. PLUS! People will go ahead and take on huge loans with that low interest rate. It is win win (unless you don't want huge crushing loans).
The main reason behind it all is the low costs of taking on debt, which in some scenarios is totally insane. Italy for example that has been bailed out several times can get rates around 1%. What kind of entity would accept the risk of default when the profit is close to none after inflation?
The world is obviously in a debt bubble - the question is only when it will pop & how dramatically it will happen.
In St. Louis there's a small but frothy back-to-the-city movement that's driving prices up to new highs in a handful of trendy neighborhoods. And it's all anybody can talk about. It's a kind of synecdoche for "the housing market" to reference these tiny neighborhoods while using cargo-cult language about "gentrification" that people learned on twitter.
Make no mistake: prices are way up in those neighborhoods. But they're walking distance to far more affordable housing. It's really bizarre.
I've noticed this too, but obviously it's not universal (lest someone accuse me of bashing millennials).
And with regards to houses getting bigger, I keep hearing about the "golden years" when you could buy a home on a single income. Sure, but those homes were similar to what my parents starter home was - 1000 sq ft, 2 bed, 1 bath with a family of 5 living in them (siblings sharing rooms).
"Starter homes" tend to be fewer these days, especially in desirable areas. Much of the old "starter home" inventory has been upgraded and made much larger over the years, making them not really starter homes anymore, and very few builders build small houses these days, since profits for building larger homes are higher. The closest thing to starter homes being built today are condos, but those are usually in high cost areas, so again not terribly accessible.
This is why it would be good to change zoning to allow existing single family zoned lots to be subdivided or turned into multi-dwelling lots, which can accommodate a main home and a separate "starter home". This is starting to be done in places like Toronto with "Laneway houses"
> McMansions with huge yards, white picket fences, hip restaurants within walking distance, etc.
Huge yards, white picket fences, absolutely, but where are you finding "McMansions" with hip restaurants within walking distance? Usually "McMansions" are synonymous with totally un-walkable and car-bound developments.
And cant afford large houses, not even with debt. Cause no bank will borrow them. If your friends could get that much money, they are likely well off and see the house as investnent.
Which is how we bought put flat - rent was only slightly cheaper then mortgage.
The problem is they think they might not be able to afford it once they have enough kids to need it. Ironically lots of people thinking that way reinforces the problem.
Then you've got a non representative sample. This claim is outrageous, and it's not true. Honestly it pisses me off how casually you just assert that most millenials think this way. A very simple search for millenial home buyers surveys will show this is not the case.
https://listwithclever.com/research/millennial-home-buyer-re...
Median price range is below 300k.
Biggest desires are safety and good schools, likely driven by the fact that the ones buying properties are couples looking to start a family.
I've got 500k in liquid assets, a respectable salary and no debts. I'm looking at the housing market and see two options: a junk house in a sketchy area for 600k or a decent house for 1.2M, but I'd have to give up financial security and live pay check to pay check.
If there was a smallish decent condo for 200k, I'd write a check today.
Yes some have trade offs but that seems to be either they are house poor or car poor but mostly the latter. What catches them as with those who do have the money is all those monthly bills can add up really quickly. Adding twenty to thirty to your monthly phone bill for a new phone doesn't sound bad until they add in other similar arrangements.
Sadly far too many seem to think they are just free this or free that away from having it all. (as in if healthcare were only free or college was only free they would not have such problems - welcome to the poison of politicians and mass merchandise marketing combined)
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If we would pay 33% of your income in LCOL housing, and move to someplace that pays us (net) 100% more, we can afford 4x(!) the rent we did previously.
We're bidding against everyone else who wants what we want, so it's no wonder housing is insane in the Bay Area, since household incomes are so much higher.
This is the problem, really. It's hard to find a simple single-floor home for individuals or no-kid couples.
Buying a custom tailored suit requires extra/better labour and materials, so it makes sense that the costs associated with it would be higher.
For this analogy to apply to housing, the cost of constructing and maintaining housing should be higher in the Bay Area too. However, almost all the increases to rent in urban areas has come from increased land values. This isn't a result of the landowner putting in "extra work" to make it better; they get to extract the added land value that the community created while putting in no extra labour or capital.
The fact that private landowners capture all this extra value the community created is not inevitable! It's entirely a result of the economic system we've chosen to stick with. There are solutions that are both more fair, and economically efficient [0].
[0] - See https://en.wikipedia.org/wiki/Georgism and https://en.wikipedia.org/wiki/Land_value_tax
If you leave Google for a job in Raleigh, you're probably going to take a massive pay cut. Remember, the average SWE makes like ~$100k. It's not nothing but it's not that great either after you factor in a mortgage, car insurance, gas, utilities, food, retirement, and increased healthcare costs due to being on an inferior health insurance plan. At a certain point, you're better off at Google.
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Source: https://www.zillow.com/cincinnati-oh/home-values/
Canadians & many europeans on the other hand...
Maybe the Bay area, but that's (sadly) not the case in places like Vancouver and Victoria. Sky high property prices, but no corresponding earning potential.
If we built hundreds of Tokyo-sized apartments over every metro station, the housing shortage would be over.
My parents bought their NYC home in 1976 for $76,000. Adjusted for inflation brings that to around $350,000 in 2020 dollars. The house is currently valued at $800,000.
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Now go back to ~1970, when real wages stopped keeping up with productivity, and old housing started to increase in value instead of depreciating.
Which is an important factor, too! In Germany rates seem to be around 1%, as low as 0.5% fixed for 10 years. (US seems higher though)
W/r/t your point about hedonic adjustments, I’m not sure that matters if most still can’t afford it.
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It doesn't matter that real estate on the Moon is free. There aren't any jobs on the Moon, or in third-tier cities.
My mother stayed home while my father worked an eight hour day as an engineer at the local factory. He never worked overtime or weekends. All this with a bachelor's degree. My mother eventually went back to work so my parents retired quite early.
American workers have been conned into creating the very wealthiest people in the world by continuing to give up more and more earning power, every year, and for being more productive. Europe is slightly better thanks to good public benefits, but it has also gone in the same direction: making the wealthy far wealthier than they were in the past.
I can understand why this latest generation has little enthusiasm for doing anything extra at work. Good for them. Maybe things will eventually head back in the right direction for the middle class in developed countries.
It's fair to note that one party in the USA has worked very hard to break up unions. And it has worked. So it's not just labor vs. capital. It's labor vs. capital allied with the government.
I wonder how much is this due to person-level decisions such as poor life/financial planning and inherited low socio-economic class.
This pendulum seems to swing back and forth. The phrase "conned into" implies that American workers had some kind of choice and were lied to or otherwise induced to making the wrong choice.
That may be true, or there may have been systemic changes, not under the control of American workers, or there may have been choices made by other groups in American society (older workers, politicians, etc.), that led to the current state.
I interpret the “capitalists are screwing the working class” as a) erroneous b) long-term dangerous c) convenient way for those bureaucrats to divide and conquer. Meanwhile they take risks with our economy without accountability.
> I interpret the “capitalists are screwing the working class” as a) erroneous
Isn't support of Wall Street fairly interpreted as support of the uber wealthy capitalists who benefit the most from this monetary policy and artificially boosted stock prices?
And what's stopping the capitalists from using some of that vast wealth to actually pay workers more?
> Instead it’s used for stock buybacks
Who benefits from this? Shareholders, right? Aren't the uber wealthy in the US and Europe getting the vast majority of their wealth thanks to capital gains via shares?
> genuinely free market conditions.
There good reason genuinely free markets exist nowhere in the world and nowhere in history. Negative externalities don't magically disappear all on their own. Privatizing profits and socializing costs is the natural strategy every company must adopt to remain competitive lacking regulations to prevent socializing those costs. It's simply far cheaper to pollute when you are allowed to.
What's amazing is how the narrative around this however is that we need MORE government to set things right. Yet in the tech bubble the government blew up the real este bubble, in 2008 all the banks got saved along with loads of other insurance and other businesses, and now we have the largest stimulus packages ever. (on top of government subsidised student loans, which have made loads of money available for college, pushing up prices).
It's counter intuitive but in the long run this is BAD for anyone that doesn't already have something. It inflates asset prices, it locks in people who already have something. It's bad for millennials. And millennials shouldn't be arguing for more government intervention, but less. Let things fail, so that the waste can get burned off.
Unfortunately it seems a lot of people think things literally need to be burned down for there to be change. But let's be clear, 30-40 years of interventions by governments did this, which is exactly what left leaning people want of government.
Your argument that government intervention is bad for millennials is flawed. Without government intervention such as eviction moratoriums, unemployment benefits and federal government stimulus checks there would have been massive homelessness. Prior to the pandemic 40% of americans could not cover a $400 emergency, all of these people would have been on the street without the government stepping in. At one point the unemployment rate as 15%. I cant really see how this would have been good for them.
I would argue that specific and targeted government intervention such as complete student loan forgiveness would have a massive beneficial effect on millenials.
All of these are easier then digging a shaft, jumping in, and trying to climb out. Speaking as someone who has no assets, no 401k, no home.
It wouldn't have been "good for them" but it will hurt a hell of a lot less than when (at some undetermined point in the future) things come crashing down so hard that the government can't prop them up.
We're preventing fire crackers from going off and eventually we're gonna get hit with a bomb.
Right now the Fed's back is pretty close to the wall in terms of policy levers it can pull. Imagine a financial crisis comes along in 2021 or something, we could really be screwed.
I guess the waste here is people who simply can not pay for food or housing? What a naive take.
"Keep the budgets tight" was the mantra in the early 30s in response to the depression. It took a World War that killed millions of people (and was -- surprise! -- a major artificial government stimulus) to get out of it.
Yes, providing monetary liquidity and fiscal stimulus during times of extreme stress is not purely good. It can have an effect of keeping some companies alive that perhaps should not be. That is bad and we should try to minimize it in the context of a recovery effort. But the fact that it's not perfect is not a reason to claim that burning everything down and creating a decades-long horrible depression in which many die of starvation, and that cripples the country, is a preferable alternative.
They think that if you let everything burn down then green shoots will pop up and everything will be happy and folks will rebuild and it'll be better and the government oughta get its snout out of our business and just let pure capitalism run its course and...
For letting major businesses fail, we really do have the resources to let those former employees do nothing but sit at home and use the internet all day and have no bills. But the US can't handle someone not working and still being able to pay their bills.
I will grant you that the federal government in the US could have done better in some ways by just sending out checks to every citizen instead of loans to businesses, but I don't think that's what you had in mind when you talk about less government.
You Unironically say this yet Trump (a very right candidate) is the one pumping money into the economy to save his election chances.
The reality is each party wants to spend money where it feels it is important. Republicans/right wingers have given up fiscal responsibility a LOOOOOONG time ago.
But the most vocal people who want government intervention are left leaning.
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Letting banks burn down in 2008 would no doubt have been a cathartic moment, but it would be pragmatically a poor decision. Immediately post-crisis those responsible should be held responsible and actual action should be taken, but we don’t elect governments to lead us and then have them do nothing in a crisis.
Source?
We’re seeing just the tip of the iceberg. I expect a lot more social upheaval in the coming years. Social services are going to get severely strained.
How anyone making $100k can be considered "poor" is beyond me.
No wonder everyone on the West coast thinks being a Millennial sucks.
Unless we just forgive rent until a vaccine is out, many people will never catch up.
I’m a renter. Do I need to prove I’ve lost my job to not pay? Do I get to skip out on paying for a luxury apartment if I have money in the bank? Does my landlord get to skip her mortgage? Or only the portion paid by my rent? What about the bank who holds the mortgage? Or the retired bond holder who ultimately gets the mortgage payments?
Every step along the way requires somebody to not get paid.
If the government intervenes, at which step should they do it?
I’m not saying no actions should be taken, just that it’s more complicated than pure rent forgiveness. Perhaps the answer is some kind of short term UBI, but that gets expensive quick. Zero interest government loans puts the burden back on the individual. I’m not fully clear on how to beat balance individual ownership versus protecting the system from collapse. (The latter involves propping up the banks)
If 'we' forgive rent owed landlords, will 'we' also forgive the mortgages those landlords owe the banks? Will 'we' also forgive the obligations the banks which owe to other banks and their investors? Will 'we' also forgive the obligations those investors owe, for example to pensioners? Will 'we' then step up and pay for those pensioners' food and … rent?
An economy is a gigantic web of interlocking relationships. It takes years (one might even say centuries!) to build and develop all of those, but it takes far less effort to destroy them. It is computationally impossible for anyone to understand all of an economy, and thus impossible for anyone to make good decisions on behalf of an entire economy.
If we are worried about folks without resources, we should give them some. Yes, that runs the risk of encouraging those who want to get those resources (e.g. student financial aid encourages the growth of the academic industry, mortgage assistance encourages the growth of the real estate industry &c.): we should probably just give the poor some amount of money and let them make their own decisions about it. Call it unemployment or UBI or whatever.
Corono got me good traveling SEA in February, and have been now living and working at home since March. I could have never thought about living here beforehand. At least I always think that twenties and thirties are for the movement of the city, and then the farm work / home life can begin.
But having been somewhat forced to force myself to settle for an indefinite period, it is giving me much appreciation for a different kind of life. Building stuff, farming and a lot of cooking / baking / fermenting has brought out a real positivity, which now seems impossible to find in the city.
It's even got to the point where we've started inviting friends to come and live and work with us, and there seems to be that community feeling bubbling up all around.
Commuting and travel seem so weird to me by this point, and I know that the logistics are hell to try and rearrange the entire economy to be kind of segmented, but I'm starting to believe that this is the only realistic hope we have left.
I guess it wasn't worded clearly, but I meant that it's the only hope for a less wasteful economy.
EDIT to add: In the short term! Right now the infrastructure is totally oil based, and consumerism relies on ecological destruction. But I am definitely not saying that we can't have a global zero carbon everything you want economy. But that is a question that I do not have the patience or information to ponder seriously!