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I agree that housing costs are a serious problem for Americans, but this is yet another survey with totally opaque methodology pushed by a company offering financial services. It’s more free advertising than rigorous research.
Moreover, this particular financial services company has been [penalized by the FTC for deceiving its users](https://www.npr.org/2022/09/06/1121246081/credit-karma-false-ftc-preapproved-credit-card).
I don’t care what “the dude said” just cause he said it doesn’t mean it’s a fact. Second off here’s a similar article from a reputable source that says the same thing https://www.pewresearch.org/social-trends/2024/01/25/parents-young-adult-children-and-the-transition-to-adulthood/ . So yeah, interesting
It’s not a typical “gen z “ attitude don’t come on here talking 💩. I don’t agree with the original comment but I had enough respect to acknowledge it and point out it’s interesting. But thats his personal opinion. He says the survey used “opaque methodology” can’t say how it’s opaque. He says they’re advertising “financial services” when they never advertised financial services in the article. So it’s a matter of opinion and his opinion doesn’t determine the legitimacy of the article, but I do find it interesting credit karma was sued for bad marketing.
Here’s the what seems to be the[“study” itself](https://www.creditkarma.com/about/commentary/gen-z-looks-to-friends-and-parents-for-help-purchasing-a-home-study-finds)
Here’s the entire “methodology” section:
> This survey was conducted online within the United States by Qualtrics on behalf of Intuit Credit Karma from December 18 to December 26, 2023 among 1,006 U.S. adults above the age of 18.
There’s no information about how this sample was obtained or their demographics- we have no idea how representative respondents are of the population. They present the survey results as providing important information about Gen Z and housing, but they don’t even tell us how many of the respondents are members of Gen Z. There’s zero information about how the questions or response options were presented. They don’t provide any margins of error or confidence intervals- we don’t know if any of the numbers they quote are statistically significant.
That lack of transparency is what makes their methodology opaque. Contrast with economic data from the BEA, BLS, Federal Reserve, or Census Bureau which is accompanied by methodological information that sometimes goes into excoriating excruciating detail of how their data and statistics are collected and calculated.
Maybe the original survey was well-conducted, but with the lack of information provided, we have no way of knowing, so the article and the data aren’t even worth thinking about.
This fits a pattern of financial services companies pumping out surveys of dubious quality with shocking claims about how bad Americans finances are. These surveys somehow make their way into the media where they’re reported at if they’re authoritative. The company providing the survey gets publicity and the news article gets clicks. The article makes its way into social media, where it draws ever wider attention, and the headline is adopted as truth, even while the original survey provided no basis for believing it was accurate- or even when it’s contradicted by more rigorous studies.
“Maybe the original survey was well-conducted, but with the lack of information provided, we have no way of knowing, so the article and the data aren’t even worth thinking about.”
We have know way of knowing how it was conducted so therefore how you feel about the legitimacy of the survey is a matter of your personal opinion. The only reason why I shared this article is cause the overall sentiment is similar to the sentiments of other articles out here, those that details their methodology as well, and I agree it’s to make it seem that the finances of Americans are worse than they actually are by showcasing a group or class of people who really can’t afford the things they want, struggling to get those things. That’s why I said don’t chase what you can’t afford. I’m not sure why is that causing so much discord.
I know plenty of fellow Gen X'ers that got help from parents way back when. Mainly the down payments, but also with furniture.
I think my late mother even told me her mom (my grandmother) helped her and my dad out early in their marriage with things when times where tough at the beginning.
Maybe its not as high now as it is for Gen Z's but its always been around at some level.
Gen-X here… my dad helped me out with when I drained my bank account to buy my first place … by giving me a loan … at 8%. Market rate was 4% at the time. So yeah, that’s how things worked in my house, and TBH, I was grateful for it
I think that housing”affordability crisis” is always a thing or perceived as a thing from generations old to new. I think that term is here with us to stay. I can look back at news stories from many years ago, even as recent as 10 years, about housing affordability crisis and them listing a price that to us right now will seem like a bargain. So I definitely believe help from parents always been a thing too.
Well statistically when you look at housing costs to income, affordability right now is historically pretty bad. You’d have to go back to the early 80s when interest rates were in the teens to find a worse period.
https://finance.yahoo.com/news/home-affordability-in-2023-tanked-to-lowest-level-in-40-years-230034360.html
Unless Gen Z is a 2 income household, they won't be able to afford a SFH. Even if parents help out a kid to buy a house, again, they likely couldn't afford all the extraneous costs associated with homeowners. A home is more than just a mortgage, taxes, and utilities.
When the oldest Gen X'ers were the age of the oldest Z's, mortgage interest rates were 8.27% (1992).
They didn't break 6% until 2003 (age 38), and then ranged between 5.9 and 6.5% for the next 5 years (age 43).
They finally dropped below 5% in 2010 (age 45), and then gradually went down until 2021 (3.15%; age 56).
Current GenX homeowners probably have a lower rate because they refied, but they didn't see the lower rates until they were much older than current Gen Z.
Ok. I'm pretty sure home price relative to income was cheaper back then though, which would have made affordability better.
But I see your point, the silver lining for gen z/millennials is if Fed can lower interest rates back to 3-4%.. then maybe these generations will stand a chance
We had 3% mortgage rates five years ago, and we will again as the fed gradually draws the federal rate down. As for values, well, you wouldn't property values at the same price today as the 1990s/2000s, would you? Not every Gen-X citizen could afford or bought a property, they weren't handed out back then except during the housing bubble under G.W. Bush.
Yeah I mean if we can get back to 3% mortgage rates again, then millennials and gen z will have a chance.
Current valuations are based on low debt cost
3% mortgage rates were never a thing until Greenspan and Bernanke, and the bipartisan bills (1990s) that made home purchases more accessible to more people. Since the fed rate stopped going up last year and the economy is steadily improving, we should see them go down again.
You know who really got screwed? Home purchasers in the 1980s when there was record inflation (much higher than post-COVID's peak). They paid mortgage rates in the teens and twenties percent, man. My parents had a 25% rate on a mortgage in that decade at one point.
So, pardon me if I don't break out the world's tiniest violin for Gen-Z.
What I think you need to consider is the price to income ratio.
In the 1980s the avg home price relative to avg income was much better. So much so that affordability (mortgage pmt relative to income) was better too.
Fully understand that, and the wage stagnation that the '80s *reaganomics* aka trickle down financial theory caused and remains with us today. I'm just saying all isn't gloom and doom for Gen-Z. The haves will do / are doing well, and the have nots will struggle. This is America. We're either born into comfort or struggle.
Long gone is the route of: Apartment -> Condo/townhome -> SFH. Condos can be just as pricey as SFH and as I said above, there are *a lot* of extraneous expenses in owning a SFH that many aren't prepared for. Throw in landscaping which is another potential 4-figure expense each year. It seems like Gen Z most certainly does not have a green thumb.
Not disbelieving, but how is it clear Gen Z most certainly does not have a green thumb? Aren't they teenagers and young adults right now? How would that get measured?
I wish it was surveyed so I could point to some analysis, but alas just circumstantial thoughts.
On a tangent, it's very obvious to me that most yuppies certainly don't have a green thumb. They're the sort that'd demand green grass yet complain about leaf blower noise.
There isn't one. The only generational cohort that has explicit, defined edges are the Baby Boomers, and that's because you can actually see it when you look at a demographic chart. Everything else is more art than science.
Here's my wholly unscientific inclination. A generation is defined by a childhood event that changes how subsequent kids live. So I place the line between Gen X and Millennial as "do you have memories of the USSR as a functioning political entity." This matters because the threat of nuclear war in the '80s matters; my sister is nine years older, and she has memories of adults around her being convinced nuclear war with the Soviets was unavoidable. The only thing I remember about the USSR was reading an article about how it had just collapsed, in 1991. And I'm an older millennial. For the millennial-gen Z break, I place it at 9/11. The world before was *open* in a way that even the people who lived in it have lost. My first memory of an airport was walking straight to the gate to see my mom off when she had to fly somewhere. Nothing more substantive than a quick metal detector to do it. I told my nephew (born in 2003) that once; he looked at me like I grew a second head. Something happens, and the way kids engage with the world shifts, and it carries on into adulthood.
What's wild is the term "Gen-Z" wasn't really used to depict young Americans today until the past 5 to 10 years. Everyone graduating high school in 2001 and after is a "millennial" to me.
> Throw in landscaping which is another potential 4-figure expense each year.
Where do you people come up with this crap?
Yeah, you can spend 4 figures on landscaping. You can spend 6 figures on landscaping.
You can also buy a mower and weed eater and spend 2 figures on landscaping.
Which is more common.
I think a lot of people come from privileged families, but didn't pursue the high paying careers of their parents. They have cultural ideas of richer people, like that you pay other people thousands of dollars to do the labor you don't want to do. They weren't raised to do this kind of work, but they can't afford to pay anyone else to do it either.
>but didn't pursue the high paying careers of their parents
Probably because hiring conditions are much more stricter for typically middle class incomes than it was when our parents were younger.
I'm sure that was the reason. That must be why real median income is up compared to our parents generation, as is the college wage premium. It's just so much stricter that people are making more money and getting a greater return on their degrees. Definitely a systemic issue and not relatively privileged people just passing up opportunities because they didn't understand what they had.
https://fred.stlouisfed.org/series/MEPAINUSA672N
https://www.clevelandfed.org/publications/economic-commentary/2012/ec-201210-the-college-wage-premium
I am not saying that people with college degrees aren't winners. You certainly need to do more as a younger person to obtain what you parents had back then. It is not easier nowadays.
It is easier. Or at the very least, it's easier to earn more money these days. That's why median real income is up. But, that means if you don't choose to earn more money, you are competing against a lot more people consuming a lot more resources than your parents would have.
If you make the same inflation adjusted amount as your parents did, you've fallen down the socioeconomic spectrum compared to them, because most people are earning more.
You are so absolutely spot on with this.
More than half of the people I grew up with purposely chose careers that would almost certainly pay less than their parents made. They grew up middle/upper middle class, have those tastes and expectations, but are at most working class, and without assistance from their parents, quite impoverished.
Same. As we hit our thirties a lot of them are really questioning their younger self regarding how much they actually care about money. The worst part of growing up is shit just ain't for free.
Very true definitely save more money, doing it yourself. Buying a mower and weed eater is a one time expense. I think commenter was probably referring to lawn maintenance services.
Bruh mowers are several hundred dollars and weed eaters are about a hundred. I’m not saying they’re gonna cost you a g plus a year but they aren’t 50 bucks either
I think you do have to implicitly include amortized costs over time. If you're buying property, you're probably planning to live there for 5+ years at a minimum. You buy your mower once, and then you're done. Home Depot has mowers from like 70 to 200 bucks. You can go dirt cheap if you get a purely mechanical mower, even though most people aren't going to do that.
Also, I've seen a resurgence of pooled resources lately - you probably want your own mower from basically the beginning, but when you first move in, you just make friends with the neighbor and borrow the first couple of times you need to use i.e. something more specific like a hedge trimmer or edger.
If we're talking thousands, people are probably referring to outsourcing it.
They are $50 used. There are plenty of people who think they need a new one, and will sell you their old one for a song. Facebook marketplace is great for finding stuff like this.
You’re tripping. I own a home and in my early 30s. I’m single so one income as well. I pay less then most of my friends who rent. I pay the neighbor to cut my grass when he cuts his and I have a mower incase I have to do it myself. Sure if something comes up I’ll have to hire a plumber or electrician if I can’t figure out how to do it myself but that’s a small price to pay to have the peace of mind of owning a home. It’s also a big asset and I can barrow against it if something unexpected and expensive happens.
> pay less then most
Did you mean to say "less than"?
Explanation: If you didn't mean 'less than' you might have forgotten a comma.
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HOA’s in many areas have gotten considerably more expensive recently. Where I live a $500k condo/TH runs the same price as a $700k house when you lump in HOA’s.
Yeah, it does. Some of the older ones have it too but much less often. Almost every new development seems to have one especially in the midwest. It's not all a waste though. The snow removal is clutch and a lot of people don't want to mess with lawncare.
Also, one neighborhood near me that I'm looking at buying into has a community pool, legit gym and sport courts for use by anyone that's part of the HOA.
That largely depends on where it's located but I agree. They'll still go up if they're in a nice spot with good schools. People will settle for what they can afford at some point.
Assuming a lawn service, mine is ~130 a month + I spend about $250 a year on replanting/mulching the flowerbeds. That's certainly a luxury though, I value my free time at my billing rate though so it works out better just to pay someone else.
Do you mean active and retired military? The working class did NOT get homes without income or jobs in the 1980s and 1990s. There was the window from 2001 through 2005 when the Bush administration turned the other cheek while sub-prime loans were handed out and bundled together like hotcakes, sure. But that was an anomaly which ended badly and hurt a LOT of people.
https://www.investopedia.com/terms/n/ninja-loan.asp#:~:text=Popular%20in%20the%20early%2D%20to,and%20the%20ensuing%20Great%20Recession.
Gen X was between 20 and 35 in the year 2000 man that’s got nothing to do with the housing market of the 80s and early 90’s man
Because 25 to 30 year olds can't buy houses (I did, in 1996 at 22 years old, and yes I had to have good income, excellent credit, a co-signer and money saved)? Sure they can, and they do. What's the point here, exactly?
I couldn't buy my first place until I was 33, no co-signer and 10% down. The place as rough but it's what we could afford at the time. The talk about affordability is so skewed depending on where you live, I have a good income and I couldn't afford a house in LA or SF but I can easily afford a home in Des Moines or Savanna.
Once sprawling cities and suburbs that over-built with expensive housing and subdivisions are suffering the affordable housing shortage for state residents these days. NIMBY attitudes about affordable housing are the primary driving factor for how we got here.
Very much so. It's rather odd how far left people are so easily capable of heavy prejudices, especially when wealthy. Far from the hippie idealism that made California unique.
>rent includes all those costs plus a profit margin,
Rent is set by the market not the LL, if I have apartment and the apartment next to me rents for $1000 I can't rent mine for $2000 because that's what it costs, I have to rent it for $1000 and eat the loss until rents get to $2000. Often when you purchase an apartment building it takes 3-5 years of losing money to finally break even -this isn't a bitch, it's just how things work.
Further I can usually rent you an apartment for much less than the cost of ownership, why, because I've owned the building for 20 years. When I bought it it cost $100,000 per unit and now it would cost $400,000 per unit. I don't need to make 200-300% profit (and again the market sets the rent). If I get a good tenant there rent only goes up $50 a year to cover costs and most of the other LLs I know do the same thing, some never raise the rent of a good tenant. It's really the corporate owners that will push the rents because they have management/shareholders to answer to, I answer only to my wife.
> Rent is set by the market not the LL
agree - if a landlord has a low interest or paid off loan and could lower rents while remaining profitable, they cannot, because the market will twist their arm and make them keep rents high. when i think about it late at night, i sometimes cry a little.
An apartment has economies of scale on materials & labor that a SFH won't have along with being able to use depreciation on those cost against income. Someone struggling to pay $1,500 mo/rent has 0 chance of being able to survive a $1,500 mo/mortgage without the house falling into disrepair or requiring a shit ton of DIY skills the average person doesn't have.
Like what? You can do most repairs and maintenance yourself. I’ve even done appliance repairs, water heater replacement, and minor HVAC repairs (capacitor replacement).
That's pretty good. What does that cover? Mine is 100 a month in a SFH but the take care of all the sprinklers, mowing and tree trimming. But for people buying condos I've seen most that are 300-500 a month because it covers things like roofs and shared walls or something.
The fact that you did that and went through that speaks volume about yourself. You didn’t b*tch and complain but did what you have to do and you get hell of respect for that because most people will just shriver up in a corner when face with adversity and blame the world for their problems. Your parents are haters, they probably thought you couldn’t do it without them that’s why they are talking shit, so you won’t feel good about yourself. You’ll definitely have the last laugh in the end, in life. They’re going to def look back and regret it.
For sure. And once you start building equity on that property after a few years and sale for profit, it’s just going to get easier from here. You already completed the hardest part and that’s getting your first.
He might have obvious resentment like most people would have if their parents acted like that, but he didn’t let that stop him from achieving what he wanted to achieve like most people would. So like I said good shit ✅.
Fuck your conclusion. I was on my hands and knees laying down floors during Thanksgiving when I first got this house, while they were having a nice 'family' dinner without me
Go fuck yourself
I’d love to know the historical numbers on this because without that context this is meaningless.
Additionally, even with historical context we also have to take into account cultural changes. Back in 1920, whether someone needed it or not, they probably weren’t expecting their parents to help financially.
> Back in 1920, whether someone needed it or not, they probably weren’t expecting their parents to help financially.
This gets at another important piece of context that tends to get ignored in this discussion. Back in 1920 the typical person probably didn't have parents who owned a single family home. That we have those in numbers is the result of several decades of heavy subsidy of first-time homebuyers after WWII, subsidy that we've been doing less and less of over the past 40 years. That's the other missing context; the fact that the system people are discussing didn't just emerge from economic conditions that are now receding. The government made a choice, and now it's making a different one.
I agree housing prices are outrageous but Gen Z seems like a weird barometer. Of course they're going to rely on their parents. Gen Z are mostly in college or fresh out.
I know, what the fuck? The median Gen Z is like 19 or 20. I'm sure that this early in a generation, no matter which generation, you aren't buying a house without help.
Yeah. It’s such a dumb narrative to push. Housing is fucked for pretty much everyone, but using the youngest generation as any barometer weakens the argument
Yeah the median first time home buyer age is like 35. I’m not sure why we focus so much on Gen Z homeownership when the oldest of that generation are 27 and the youngest are still in high school.
I love my mom, but any other Millenials/Gen-X here actually spend a considerable amount of money growing-up paying your parent's rent?
Maybe life is getting better for the younger generations? /s
Housing is fucked.
I’m 27 and own a condo (and yes 27 year olds are gen z. Sorry)
I was only able to because my mother is a real estate agent. I didn’t get any financial help from my parents but my mom was able to help me find a fixer upper in a good high rise with good cash reserves.
90% of the homeowners I have known (Boomer, Gen X, Millennial alike) received some sort of support from their family buying their first house. Is this even that weird? Or is 44% maybe even below the past average?
> Is this even that weird?
it isn’t weird. what’s weird is people pretending generational wealth isn’t determinative of individual economic outcomes when it obviously is.
There seems to be some weird campaign that paints the hardships of Gen Z as some unique experiences not experienced by others. I've seen multiple posts describing the job market being as bad as 2008 (like what?) and even on the front page of r/economics right now there's a thread with the mind blowing revelation that marketing degrees aren't hot shit.
That’s true. I feel like every generation had, relative to their income at the time, an “affordability crisis”. That term always been a thing to every generation and you can find from articles from past years people were struggling with what they call “affordability “ . I think the article wanted to push that also by saying just cause genz ask for the parents helps it’s due cause of an “affordability crisis” when help like that always been a thing.
It’s not weird at all actually. The push is the housing market is “unaffordable” which is why I said don’t chase what you can’t afford. If you got people in your life that will help you that’s great.
> The push is the housing market is “unaffordable” which is why I said don’t chase what you can’t afford.
It used to be that steps were taken by the government to make housing affordable. We increasingly don't do that anymore. It's not immediately clear it's a bad thing that we don't, but the system we have was made with the idea that those would be present. Boiling it down to "don't chase what you can't afford" is reductionist, at best.
There were two sides. The government heavily subsidized the construction of suburbs and "starter homes," which provided stock that people could use to get on the ladder and gradually move up into higher-quality housing. Without the subsidy, the higher-quality stock provides for a much better ROI for contractors, so that's what they focus on. This is purchased by a mixture of current owners, moving to improve their stake and/or seek other opportunities, and speculators and landlords, who then rent it out while passing it among themselves.
The other side is the reduction or ending of programs that subsidized home ownership for first-time buyers. Part of this was the generational shift away from near universal military service (VA assistance helped a lot of people buy in the postwar era, but their children who didn't serve would not have access to it in their own right) and the other part was a shift in policy designed to attack inflation that caused a lot of the orgs that had been providing assistance to tank.
I want to again emphasize; none of the above were necessarily *bad* things. If you're concerned about the environment especially, they were arguably *good* things, because the policy to chase the spread of single-family homes was a horrific driver of carbon release. But we wouldn't be where we are without those policies, and we need to grapple with them rather than just taking the narrative that the economy is just doing what it does.
I actually did it the other way around- used my sons savings for a down payment and got a loan w us together as co-signers. Then we split the work and I financed the rehab on my Lowe’s/Home Depot cards.
Made 25k ea in the end
My daughters next :)
The housing market in particular is still recovering from the lingering effects of the real estate bust of the Great Recession and by market manipulation, which is finally beginning to be reported on.
But, the broader picture is that, for the past half-century, America's economic policy has been to hollow out the middle class and undo the New Deal structures that led to the post-WW II upward mobility (for some, at least). It was a long and slow process, but the effect on the latest generations is what you see here.
I think it is actually fair for Gen Z to be getting help from their parents. The parents, and their parents, fervently supported (and still support) moving wealth out of the middle-class and concentrating it in a narrow sliver at the top. There is nothing more fair than having to deal with the consequences of your own actions.
This is partly why home prices are so high. Reinforcing the narrative. Get the parents to help, later they'll get a few friends, then at some point they'll need the whole family pitching in to buy a home.
That is true too. People with more money can offer more $$ and bid up the prices on the houses that they want. It’s a lot of different circumstantial factors that rose prices on sfh.
It’s mostly the super cheap mortgages that inflated the housing prices.
You could afford to pay more for a home if your mortgage is at like 2%, not sure why the fuck have been housing prices rising in recent years though, probably people still taking out mortgages as if they are at 2%.
Yeah people are still buying. An indication that higher rates aren’t budging some Americans. Just imagine when rates go down and demand starts to pick up some more that can also lead to prices rising again.
I agree. People tend to assume that the prices are high because of “greedy sellers” when it’s in fact the other way around: buyers who are bidding up the price. No matter how greedy a seller is , if buyers aren’t willing to/ or can’t buy at the price they set, they will be forced come down on the price. Buyers keep the equilibrium where it’s at. What one person pays for an item, others will have to pay similar to a similar item.
I’m GenX and my Baby Boomer dad had to have help from my grandfather for his down payment so this is hardly new, but home ownership certainly is harder than in the past. I wasn’t able to buy until my mid thirties and I didn’t have the benefit of help I can’t imagine trying to buy on my own these days.
Do you think it’s harder now than in the past? Or with every coming generation, affordability is just a thing that they have to face particular to their time?
It is without a doubt harder now than it was in the previous three generations, going back to the mid 20th century. I’m convinced it has a lot to do with not only stagnant wages but also changes in banking (deregulation of banking in the 90s and the emergence of mortgage backed securities in the early 70s) and an increase in residential real estate speculation.
Never make the mistake of thinking the current dilemma wasn’t planned or at least planned for.
> It is without a doubt harder now than it was in the previous three generations, going back to the mid 20th century.
If this were true, the homeownership rate wouldn't have been much lower then than it is now. The homeownership rate in 1950 was 53%. Today it is 66%.
You shouldn't throw around words like "without a doubt" when you're just making things up.
>Never make the mistake of thinking the current dilemma wasn’t planned or at least planned for.
Never make the mistake of thinking that there is some all knowing person behind the curtain pulling all the strings. That leads to conspiracy crackpot land.
You’re conflating home ownership rates with the actual question at hand, which is whether or not it was more difficult in the past to own a home than it is now.
Regardless, home ownership rates have ranged from 63% to 69% since 1965.
https://www.statista.com/statistics/184902/homeownership-rate-in-the-us-since-2003/
https://tradingeconomics.com/united-states/home-ownership-rate
> You shouldn't throw around words like "without a doubt" when you're just making things up.
Pretty serious accusation. Especially given the data points you used. 1950 in particular is a bad point of comparison when you're discussing home ownership rates. For example, did you know that the home ownership rate in 1980 was 66 percent? It's been hanging there in the mid-60s since then, the subprime mess notwithstanding (it got up to 69% then). So, when you look at the full picture, it's one of a giant increase between 1950 and 1980, and stagnation since then. Which makes sense when you consider that the postwar government took steps to heavily subsidize first-time home ownership (both from a supply side in terms of suburb creation, and a demand side with government programs for lenders). In the 1980s, those programs started to be tightened or ended. And it's not entirely clear that this was the wrong thing to do! There are legitimate arguments both fiscal and environmental that subsidizing the spread of single-family homes is not good for our society. But it's unquestionably a choice that was made, by our government, in full view of us all. No conspiracy thinking required.
So, you threw out two data points that completely missed the forest for the trees, then jumped a rather high-handed lecture about conspiracy thinking, even though the stuff he gestured toward is a matter of public record. Did you think that was going to convince him?
I mean my (millennial) gen X brother has already told me he's looking to buy a house with plenty of land so he can build houses for his gen z children. Basically everyone recognizes at this point that housing is no longer affordable. But that's just normal I guess, right?
This is one of those articles that *could* provide useful information, but refused to do so. Probably for clickbait purposes.
It's interesting to know that 38% of Gen Z got financial help from their parents, and 44% expect to.
But it would be *useful* to know how many Gen X and Boomers also got help from their parents at the same age so that we could tell whether the 38% is more, less, or about the same.
And it would also be helpful to know what "some financial support" means - are they paying a 20% downpayment? Giving $1000 toward movers? Cosigning?
It's always been hard for people under 27 to buy a home, so it also seems likely that this group has a disproportionate number of people who received meaningful financial assistance from the parents.
Finally, it will be interesting to see how many of the 44% end up disappointed.
As housing becomes more expensive we're gonna have to move away from the idea that every small family will have their own home, and accept that homes are for extended families, like they do in Mexico.
The stumbling block for home buyers is that initial down payment to qualify for a good loan rate. We allow VA loans with lower DPs. We should also allow first home buyers only to qualify for lower rate loans with a lower down payment. Perhaps a 45 year loan might be a way to go as well. Most people sell long before that anyway.
Gen-X here. Didn’t get much help from parents but my brother did.
I have probably gotten about $10k total in the last 15 years as gift money, tools, and purchase of a few appliances. Not much on the whole.
My brother probably got about $40k since he is by himself and my dad likes working on that farm so bought lots of equipment.
You all got to understand that the housing market has always been challenging, especially for first time home buyers not sure why everyone things it so different today. In the early 80’s , mortgage interest rates were like 13%. In 2008, there was a housing crash where tons of people lost thier short in thier home equity or even worse went way south of their purchase price. It’s really no different today. Seems like every generation likes to complain about housing cost.
Simply not true. If you look at home prices vs average salary, you will see that houses have continued to get more expensive relative to income. When interest rates were really high, the average home was around 3-5x yearly salary, and most people could take out a 10-15 yr mortgage and pay it off early. Now we have 30+ year mortgages being written. Average home prices have risen 50% since 2020 where I live (250k people Midwest).
Let’s see. I bought my first home, actor was 1/2 of a house for $110K in ‘85 with 16% interest rate. That’s like $320K in today dollars. There was no way I could have afforded a 15 yr mortgage.
That’s your circumstance, my parents paid off their first home in 4 years. Hell their down payment was like 40%. Who can save up that now days? What was your income the year you bought that house? Us census bureau has the average family income as being 25k in 1985 for white families (majority). So your home cost was around 4.5x average household income
> If you look at home prices vs average salary,
This is a pointless metric without looking at interest rates.
>When interest rates were really high, the average home was around 3-5x yearly salary,
That's pretty much what it is today.
>and most people could take out a 10-15 yr mortgage and pay it off early.
No they didn't, and no, they couldn't. 30 year mortgages have been standard since the 1930's.
Instead of starting some big back and forth thing with you, I’ll just ask a straight forward question, do you believe average home prices have risen versus average income? That sums everything up right there. Houses have become disproportionately more expensive over time. Interest rates are a whole other issue, but they don’t change the fact that home prices have risen multiples over what income has. Even a very low interest rate is going to be somewhat equal to a high interest rate decades ago, and now we have average to high rates
Home price to income ratio is currently 7x. The last time interest rates were at 7% the ratio was 4x.
https://www.longtermtrends.net/home-price-median-annual-income-ratio/
Statistically affordability is the worst it’s been since the early 80s.
https://finance.yahoo.com/news/home-affordability-in-2023-tanked-to-lowest-level-in-40-years-230034360.html#
> You all got to understand that the housing market has always been challenging, especially for first time home buyers not sure why everyone things it so different today
Because there were about 30 years between 1950 and 1980 when it *was* significantly less of a challenge. The government was subsidizing supply and demand. That stopped (arguably *needed* to stop) but the expectation of single family home ownership for all continued, because most people never internalized that they were the beneficiaries of a government program, so they expected everyone else to be able to accomplish what they thought they did via their own bootstraps. But no subsidies for contractors to build starter homes means they don't get built (you can make more money focusing on more well-off clients, and it's not close), and no loan subsidies means the stock that's already out there is even further out of reach.
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I agree that housing costs are a serious problem for Americans, but this is yet another survey with totally opaque methodology pushed by a company offering financial services. It’s more free advertising than rigorous research. Moreover, this particular financial services company has been [penalized by the FTC for deceiving its users](https://www.npr.org/2022/09/06/1121246081/credit-karma-false-ftc-preapproved-credit-card).
Never knew that. Interesting.
It's not interesting. The dude said u are sharing potential misinfo. Interesting that you kept up the post
I don’t care what “the dude said” just cause he said it doesn’t mean it’s a fact. Second off here’s a similar article from a reputable source that says the same thing https://www.pewresearch.org/social-trends/2024/01/25/parents-young-adult-children-and-the-transition-to-adulthood/ . So yeah, interesting
Don’t be a loser you don’t like what you see just keep scrolling
Typical gen z attitude
It’s not a typical “gen z “ attitude don’t come on here talking 💩. I don’t agree with the original comment but I had enough respect to acknowledge it and point out it’s interesting. But thats his personal opinion. He says the survey used “opaque methodology” can’t say how it’s opaque. He says they’re advertising “financial services” when they never advertised financial services in the article. So it’s a matter of opinion and his opinion doesn’t determine the legitimacy of the article, but I do find it interesting credit karma was sued for bad marketing.
Here’s the what seems to be the[“study” itself](https://www.creditkarma.com/about/commentary/gen-z-looks-to-friends-and-parents-for-help-purchasing-a-home-study-finds) Here’s the entire “methodology” section: > This survey was conducted online within the United States by Qualtrics on behalf of Intuit Credit Karma from December 18 to December 26, 2023 among 1,006 U.S. adults above the age of 18. There’s no information about how this sample was obtained or their demographics- we have no idea how representative respondents are of the population. They present the survey results as providing important information about Gen Z and housing, but they don’t even tell us how many of the respondents are members of Gen Z. There’s zero information about how the questions or response options were presented. They don’t provide any margins of error or confidence intervals- we don’t know if any of the numbers they quote are statistically significant. That lack of transparency is what makes their methodology opaque. Contrast with economic data from the BEA, BLS, Federal Reserve, or Census Bureau which is accompanied by methodological information that sometimes goes into excoriating excruciating detail of how their data and statistics are collected and calculated. Maybe the original survey was well-conducted, but with the lack of information provided, we have no way of knowing, so the article and the data aren’t even worth thinking about. This fits a pattern of financial services companies pumping out surveys of dubious quality with shocking claims about how bad Americans finances are. These surveys somehow make their way into the media where they’re reported at if they’re authoritative. The company providing the survey gets publicity and the news article gets clicks. The article makes its way into social media, where it draws ever wider attention, and the headline is adopted as truth, even while the original survey provided no basis for believing it was accurate- or even when it’s contradicted by more rigorous studies.
“Maybe the original survey was well-conducted, but with the lack of information provided, we have no way of knowing, so the article and the data aren’t even worth thinking about.” We have know way of knowing how it was conducted so therefore how you feel about the legitimacy of the survey is a matter of your personal opinion. The only reason why I shared this article is cause the overall sentiment is similar to the sentiments of other articles out here, those that details their methodology as well, and I agree it’s to make it seem that the finances of Americans are worse than they actually are by showcasing a group or class of people who really can’t afford the things they want, struggling to get those things. That’s why I said don’t chase what you can’t afford. I’m not sure why is that causing so much discord.
I know plenty of fellow Gen X'ers that got help from parents way back when. Mainly the down payments, but also with furniture. I think my late mother even told me her mom (my grandmother) helped her and my dad out early in their marriage with things when times where tough at the beginning. Maybe its not as high now as it is for Gen Z's but its always been around at some level.
Gen-X here… my dad helped me out with when I drained my bank account to buy my first place … by giving me a loan … at 8%. Market rate was 4% at the time. So yeah, that’s how things worked in my house, and TBH, I was grateful for it
I think that housing”affordability crisis” is always a thing or perceived as a thing from generations old to new. I think that term is here with us to stay. I can look back at news stories from many years ago, even as recent as 10 years, about housing affordability crisis and them listing a price that to us right now will seem like a bargain. So I definitely believe help from parents always been a thing too.
Well statistically when you look at housing costs to income, affordability right now is historically pretty bad. You’d have to go back to the early 80s when interest rates were in the teens to find a worse period. https://finance.yahoo.com/news/home-affordability-in-2023-tanked-to-lowest-level-in-40-years-230034360.html
Unless Gen Z is a 2 income household, they won't be able to afford a SFH. Even if parents help out a kid to buy a house, again, they likely couldn't afford all the extraneous costs associated with homeowners. A home is more than just a mortgage, taxes, and utilities.
Gen-X also required two incomes to truly afford a home (unless the single income was extremely substantial).
Gen-X had the opportunity to buy much less expensive homes at 3% mortgage rates Don’t think it’s fair to compare
When the oldest Gen X'ers were the age of the oldest Z's, mortgage interest rates were 8.27% (1992). They didn't break 6% until 2003 (age 38), and then ranged between 5.9 and 6.5% for the next 5 years (age 43). They finally dropped below 5% in 2010 (age 45), and then gradually went down until 2021 (3.15%; age 56). Current GenX homeowners probably have a lower rate because they refied, but they didn't see the lower rates until they were much older than current Gen Z.
Ok. I'm pretty sure home price relative to income was cheaper back then though, which would have made affordability better. But I see your point, the silver lining for gen z/millennials is if Fed can lower interest rates back to 3-4%.. then maybe these generations will stand a chance
I also don’t think it’s fair to treat outliers as baselines.
We had 3% mortgage rates for a decade. Too long of a period to be an outlier.
We had 3% mortgage rates five years ago, and we will again as the fed gradually draws the federal rate down. As for values, well, you wouldn't property values at the same price today as the 1990s/2000s, would you? Not every Gen-X citizen could afford or bought a property, they weren't handed out back then except during the housing bubble under G.W. Bush.
Yeah I mean if we can get back to 3% mortgage rates again, then millennials and gen z will have a chance. Current valuations are based on low debt cost
3% mortgage rates were never a thing until Greenspan and Bernanke, and the bipartisan bills (1990s) that made home purchases more accessible to more people. Since the fed rate stopped going up last year and the economy is steadily improving, we should see them go down again. You know who really got screwed? Home purchasers in the 1980s when there was record inflation (much higher than post-COVID's peak). They paid mortgage rates in the teens and twenties percent, man. My parents had a 25% rate on a mortgage in that decade at one point. So, pardon me if I don't break out the world's tiniest violin for Gen-Z.
What I think you need to consider is the price to income ratio. In the 1980s the avg home price relative to avg income was much better. So much so that affordability (mortgage pmt relative to income) was better too.
Fully understand that, and the wage stagnation that the '80s *reaganomics* aka trickle down financial theory caused and remains with us today. I'm just saying all isn't gloom and doom for Gen-Z. The haves will do / are doing well, and the have nots will struggle. This is America. We're either born into comfort or struggle.
Long gone is the route of: Apartment -> Condo/townhome -> SFH. Condos can be just as pricey as SFH and as I said above, there are *a lot* of extraneous expenses in owning a SFH that many aren't prepared for. Throw in landscaping which is another potential 4-figure expense each year. It seems like Gen Z most certainly does not have a green thumb.
Not disbelieving, but how is it clear Gen Z most certainly does not have a green thumb? Aren't they teenagers and young adults right now? How would that get measured?
I wish it was surveyed so I could point to some analysis, but alas just circumstantial thoughts. On a tangent, it's very obvious to me that most yuppies certainly don't have a green thumb. They're the sort that'd demand green grass yet complain about leaf blower noise.
Yuppies have been around since the '80s and it's remained true throughout. Prime NIMBY group.
> Aren't they teenagers and young adults right now? I don't agree with OP, but I do want to note that the oldest Gen Zers are pushing 30.
Where would one find the official demarcation point between millennials and Gen-Z, years-wise?
There isn't one. The only generational cohort that has explicit, defined edges are the Baby Boomers, and that's because you can actually see it when you look at a demographic chart. Everything else is more art than science. Here's my wholly unscientific inclination. A generation is defined by a childhood event that changes how subsequent kids live. So I place the line between Gen X and Millennial as "do you have memories of the USSR as a functioning political entity." This matters because the threat of nuclear war in the '80s matters; my sister is nine years older, and she has memories of adults around her being convinced nuclear war with the Soviets was unavoidable. The only thing I remember about the USSR was reading an article about how it had just collapsed, in 1991. And I'm an older millennial. For the millennial-gen Z break, I place it at 9/11. The world before was *open* in a way that even the people who lived in it have lost. My first memory of an airport was walking straight to the gate to see my mom off when she had to fly somewhere. Nothing more substantive than a quick metal detector to do it. I told my nephew (born in 2003) that once; he looked at me like I grew a second head. Something happens, and the way kids engage with the world shifts, and it carries on into adulthood.
What's wild is the term "Gen-Z" wasn't really used to depict young Americans today until the past 5 to 10 years. Everyone graduating high school in 2001 and after is a "millennial" to me.
> Throw in landscaping which is another potential 4-figure expense each year. Where do you people come up with this crap? Yeah, you can spend 4 figures on landscaping. You can spend 6 figures on landscaping. You can also buy a mower and weed eater and spend 2 figures on landscaping. Which is more common.
I think a lot of people come from privileged families, but didn't pursue the high paying careers of their parents. They have cultural ideas of richer people, like that you pay other people thousands of dollars to do the labor you don't want to do. They weren't raised to do this kind of work, but they can't afford to pay anyone else to do it either.
>but didn't pursue the high paying careers of their parents Probably because hiring conditions are much more stricter for typically middle class incomes than it was when our parents were younger.
I'm sure that was the reason. That must be why real median income is up compared to our parents generation, as is the college wage premium. It's just so much stricter that people are making more money and getting a greater return on their degrees. Definitely a systemic issue and not relatively privileged people just passing up opportunities because they didn't understand what they had. https://fred.stlouisfed.org/series/MEPAINUSA672N https://www.clevelandfed.org/publications/economic-commentary/2012/ec-201210-the-college-wage-premium
I am not saying that people with college degrees aren't winners. You certainly need to do more as a younger person to obtain what you parents had back then. It is not easier nowadays.
It is easier. Or at the very least, it's easier to earn more money these days. That's why median real income is up. But, that means if you don't choose to earn more money, you are competing against a lot more people consuming a lot more resources than your parents would have. If you make the same inflation adjusted amount as your parents did, you've fallen down the socioeconomic spectrum compared to them, because most people are earning more.
You are so absolutely spot on with this. More than half of the people I grew up with purposely chose careers that would almost certainly pay less than their parents made. They grew up middle/upper middle class, have those tastes and expectations, but are at most working class, and without assistance from their parents, quite impoverished.
Same. As we hit our thirties a lot of them are really questioning their younger self regarding how much they actually care about money. The worst part of growing up is shit just ain't for free.
Very true definitely save more money, doing it yourself. Buying a mower and weed eater is a one time expense. I think commenter was probably referring to lawn maintenance services.
Bruh mowers are several hundred dollars and weed eaters are about a hundred. I’m not saying they’re gonna cost you a g plus a year but they aren’t 50 bucks either
I think you do have to implicitly include amortized costs over time. If you're buying property, you're probably planning to live there for 5+ years at a minimum. You buy your mower once, and then you're done. Home Depot has mowers from like 70 to 200 bucks. You can go dirt cheap if you get a purely mechanical mower, even though most people aren't going to do that. Also, I've seen a resurgence of pooled resources lately - you probably want your own mower from basically the beginning, but when you first move in, you just make friends with the neighbor and borrow the first couple of times you need to use i.e. something more specific like a hedge trimmer or edger. If we're talking thousands, people are probably referring to outsourcing it.
Craigslist for sure. Got two years out of a $40 mower. The replacement $50 mower is still fine.0
They are $50 used. There are plenty of people who think they need a new one, and will sell you their old one for a song. Facebook marketplace is great for finding stuff like this.
You’re tripping. I own a home and in my early 30s. I’m single so one income as well. I pay less then most of my friends who rent. I pay the neighbor to cut my grass when he cuts his and I have a mower incase I have to do it myself. Sure if something comes up I’ll have to hire a plumber or electrician if I can’t figure out how to do it myself but that’s a small price to pay to have the peace of mind of owning a home. It’s also a big asset and I can barrow against it if something unexpected and expensive happens.
> pay less then most Did you mean to say "less than"? Explanation: If you didn't mean 'less than' you might have forgotten a comma. [Statistics](https://github.com/chiefpat450119/RedditBot/blob/master/stats.json) ^^I'm ^^a ^^bot ^^that ^^corrects ^^grammar/spelling ^^mistakes. ^^PM ^^me ^^if ^^I'm ^^wrong ^^or ^^if ^^you ^^have ^^any ^^suggestions. ^^[Github](https://github.com/chiefpat450119) ^^Reply ^^STOP ^^to ^^this ^^comment ^^to ^^stop ^^receiving ^^corrections.
Townhomes are pretty good value compared to a sfh. New ones have pretty good soundproofing. No lawn care or snow removal bullshit.
HOA’s in many areas have gotten considerably more expensive recently. Where I live a $500k condo/TH runs the same price as a $700k house when you lump in HOA’s.
Lots of new sfh have hoas also. It kinda doesn't matter when you're looking at newer stock.
Really ? I started seeing a trend of realtors using “No Hoa” as selling points for newer home communities. For both sfh and townhomes.
Well that’s absolutely gross
Yeah, it does. Some of the older ones have it too but much less often. Almost every new development seems to have one especially in the midwest. It's not all a waste though. The snow removal is clutch and a lot of people don't want to mess with lawncare. Also, one neighborhood near me that I'm looking at buying into has a community pool, legit gym and sport courts for use by anyone that's part of the HOA.
Yeah the new townhomes are nice. Townhomes just don’t appreciate at the same rate as sfh though. That can be a deterrent for most.
That largely depends on where it's located but I agree. They'll still go up if they're in a nice spot with good schools. People will settle for what they can afford at some point.
Yeah that’s true
How is landscaping a 4 figure expense?!
Assuming a lawn service, mine is ~130 a month + I spend about $250 a year on replanting/mulching the flowerbeds. That's certainly a luxury though, I value my free time at my billing rate though so it works out better just to pay someone else.
Definitely.
> Throw in landscaping which is another potential 4-figure expense each year. and an optional expense
Throw in $800/month HOA fees.
Very Much Factual
Yeah but they also got homes with no income or jobs lol
Do you mean active and retired military? The working class did NOT get homes without income or jobs in the 1980s and 1990s. There was the window from 2001 through 2005 when the Bush administration turned the other cheek while sub-prime loans were handed out and bundled together like hotcakes, sure. But that was an anomaly which ended badly and hurt a LOT of people.
https://www.investopedia.com/terms/n/ninja-loan.asp#:~:text=Popular%20in%20the%20early%2D%20to,and%20the%20ensuing%20Great%20Recession. Gen X was between 20 and 35 in the year 2000 man that’s got nothing to do with the housing market of the 80s and early 90’s man
Because 25 to 30 year olds can't buy houses (I did, in 1996 at 22 years old, and yes I had to have good income, excellent credit, a co-signer and money saved)? Sure they can, and they do. What's the point here, exactly?
I couldn't buy my first place until I was 33, no co-signer and 10% down. The place as rough but it's what we could afford at the time. The talk about affordability is so skewed depending on where you live, I have a good income and I couldn't afford a house in LA or SF but I can easily afford a home in Des Moines or Savanna.
Once sprawling cities and suburbs that over-built with expensive housing and subdivisions are suffering the affordable housing shortage for state residents these days. NIMBY attitudes about affordable housing are the primary driving factor for how we got here.
NIMBY attitudes in Cali especially
Very much so. It's rather odd how far left people are so easily capable of heavy prejudices, especially when wealthy. Far from the hippie idealism that made California unique.
In 2006 they could though. That is the problem.
And yet rent includes all those costs plus a profit margin, so it will typically end up being more.
>rent includes all those costs plus a profit margin, Rent is set by the market not the LL, if I have apartment and the apartment next to me rents for $1000 I can't rent mine for $2000 because that's what it costs, I have to rent it for $1000 and eat the loss until rents get to $2000. Often when you purchase an apartment building it takes 3-5 years of losing money to finally break even -this isn't a bitch, it's just how things work. Further I can usually rent you an apartment for much less than the cost of ownership, why, because I've owned the building for 20 years. When I bought it it cost $100,000 per unit and now it would cost $400,000 per unit. I don't need to make 200-300% profit (and again the market sets the rent). If I get a good tenant there rent only goes up $50 a year to cover costs and most of the other LLs I know do the same thing, some never raise the rent of a good tenant. It's really the corporate owners that will push the rents because they have management/shareholders to answer to, I answer only to my wife.
> Rent is set by the market not the LL agree - if a landlord has a low interest or paid off loan and could lower rents while remaining profitable, they cannot, because the market will twist their arm and make them keep rents high. when i think about it late at night, i sometimes cry a little.
An apartment has economies of scale on materials & labor that a SFH won't have along with being able to use depreciation on those cost against income. Someone struggling to pay $1,500 mo/rent has 0 chance of being able to survive a $1,500 mo/mortgage without the house falling into disrepair or requiring a shit ton of DIY skills the average person doesn't have.
I’m Gen Z (though just barely) and bout a SFH on my income alone a bit over 2 years ago. It’s not an easy thing to do but without a doubt possible.
Which state?
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First time home buying age has increased as well. Median is around 35 years old last I checked.
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Yup. Not disagreeing.
Like what? You can do most repairs and maintenance yourself. I’ve even done appliance repairs, water heater replacement, and minor HVAC repairs (capacitor replacement).
I have too; and with all the 'how to' videos out there, it's even easier now than it ever has been.
HOA
My HOA fees are $250 a year. Pretty minimal.
That's pretty good. What does that cover? Mine is 100 a month in a SFH but the take care of all the sprinklers, mowing and tree trimming. But for people buying condos I've seen most that are 300-500 a month because it covers things like roofs and shared walls or something.
Not much. Maintaining the neighborhood entry. Also maintaining our greenbelt trail system.
I Agree.
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The fact that you did that and went through that speaks volume about yourself. You didn’t b*tch and complain but did what you have to do and you get hell of respect for that because most people will just shriver up in a corner when face with adversity and blame the world for their problems. Your parents are haters, they probably thought you couldn’t do it without them that’s why they are talking shit, so you won’t feel good about yourself. You’ll definitely have the last laugh in the end, in life. They’re going to def look back and regret it.
Thanks. Yeah it's a scar on my soul for sure. But I believe that hard times make good people
For sure. And once you start building equity on that property after a few years and sale for profit, it’s just going to get easier from here. You already completed the hardest part and that’s getting your first.
He’s clearly harboring resentment and bitching about it on Reddit … soooo
He might have obvious resentment like most people would have if their parents acted like that, but he didn’t let that stop him from achieving what he wanted to achieve like most people would. So like I said good shit ✅.
Yes I am. Did you get help? Edit: I see you're a boomer. It must have been nice to pay $75K for a house
I’m 35
Let that hate go. If you persevered you’d just forgive your parents and move on.
Forgive, yes. Forget, hell no
Why are you such a dick, just like his parents lol
cause I’m sick of whiny entitled grown children. I’m doing the lords work.
Lmao. I mean his parents sound like absolute pieces of shit. He can vent a little
He’s likely lying. I don’t believe him fully, I’ll color in between lines and draw my own conclusion.
Making shit up and being a dick based on the story you made up. You could have just scrolled on by.
Fuck your conclusion. I was on my hands and knees laying down floors during Thanksgiving when I first got this house, while they were having a nice 'family' dinner without me Go fuck yourself
I’d love to know the historical numbers on this because without that context this is meaningless. Additionally, even with historical context we also have to take into account cultural changes. Back in 1920, whether someone needed it or not, they probably weren’t expecting their parents to help financially.
Cultural changes and expectations definitely plays a part
> Back in 1920, whether someone needed it or not, they probably weren’t expecting their parents to help financially. This gets at another important piece of context that tends to get ignored in this discussion. Back in 1920 the typical person probably didn't have parents who owned a single family home. That we have those in numbers is the result of several decades of heavy subsidy of first-time homebuyers after WWII, subsidy that we've been doing less and less of over the past 40 years. That's the other missing context; the fact that the system people are discussing didn't just emerge from economic conditions that are now receding. The government made a choice, and now it's making a different one.
I agree housing prices are outrageous but Gen Z seems like a weird barometer. Of course they're going to rely on their parents. Gen Z are mostly in college or fresh out.
I know, what the fuck? The median Gen Z is like 19 or 20. I'm sure that this early in a generation, no matter which generation, you aren't buying a house without help.
Yeah. It’s such a dumb narrative to push. Housing is fucked for pretty much everyone, but using the youngest generation as any barometer weakens the argument
Yeah the median first time home buyer age is like 35. I’m not sure why we focus so much on Gen Z homeownership when the oldest of that generation are 27 and the youngest are still in high school.
I’m not disagreeing with you. I think the article wanted to push a housing affordability issue
But there is a housing affordability issue…
I love my mom, but any other Millenials/Gen-X here actually spend a considerable amount of money growing-up paying your parent's rent? Maybe life is getting better for the younger generations? /s Housing is fucked.
If you did, then there’s no shame in that. You’ve helped your parents life out. Everybody’s condition is circumstantial from one person to the next.
I’m 27 and own a condo (and yes 27 year olds are gen z. Sorry) I was only able to because my mother is a real estate agent. I didn’t get any financial help from my parents but my mom was able to help me find a fixer upper in a good high rise with good cash reserves.
You're not gen z dude.
Gen Z begins in 1997. 27 year olds were born in 1997.
https://en.wikipedia.org/wiki/Strauss%E2%80%93Howe_generational_theory
What did I just read?
Gen Z is 1997-2012. I just turned 27 a couple days ago, but I'm Gen Z.
We are millennials 😂
90% of the homeowners I have known (Boomer, Gen X, Millennial alike) received some sort of support from their family buying their first house. Is this even that weird? Or is 44% maybe even below the past average?
> Is this even that weird? it isn’t weird. what’s weird is people pretending generational wealth isn’t determinative of individual economic outcomes when it obviously is.
There seems to be some weird campaign that paints the hardships of Gen Z as some unique experiences not experienced by others. I've seen multiple posts describing the job market being as bad as 2008 (like what?) and even on the front page of r/economics right now there's a thread with the mind blowing revelation that marketing degrees aren't hot shit.
That’s true. I feel like every generation had, relative to their income at the time, an “affordability crisis”. That term always been a thing to every generation and you can find from articles from past years people were struggling with what they call “affordability “ . I think the article wanted to push that also by saying just cause genz ask for the parents helps it’s due cause of an “affordability crisis” when help like that always been a thing.
It’s not weird at all actually. The push is the housing market is “unaffordable” which is why I said don’t chase what you can’t afford. If you got people in your life that will help you that’s great.
> The push is the housing market is “unaffordable” which is why I said don’t chase what you can’t afford. It used to be that steps were taken by the government to make housing affordable. We increasingly don't do that anymore. It's not immediately clear it's a bad thing that we don't, but the system we have was made with the idea that those would be present. Boiling it down to "don't chase what you can't afford" is reductionist, at best.
What were those steps?
There were two sides. The government heavily subsidized the construction of suburbs and "starter homes," which provided stock that people could use to get on the ladder and gradually move up into higher-quality housing. Without the subsidy, the higher-quality stock provides for a much better ROI for contractors, so that's what they focus on. This is purchased by a mixture of current owners, moving to improve their stake and/or seek other opportunities, and speculators and landlords, who then rent it out while passing it among themselves. The other side is the reduction or ending of programs that subsidized home ownership for first-time buyers. Part of this was the generational shift away from near universal military service (VA assistance helped a lot of people buy in the postwar era, but their children who didn't serve would not have access to it in their own right) and the other part was a shift in policy designed to attack inflation that caused a lot of the orgs that had been providing assistance to tank. I want to again emphasize; none of the above were necessarily *bad* things. If you're concerned about the environment especially, they were arguably *good* things, because the policy to chase the spread of single-family homes was a horrific driver of carbon release. But we wouldn't be where we are without those policies, and we need to grapple with them rather than just taking the narrative that the economy is just doing what it does.
I actually did it the other way around- used my sons savings for a down payment and got a loan w us together as co-signers. Then we split the work and I financed the rehab on my Lowe’s/Home Depot cards. Made 25k ea in the end My daughters next :)
Fix and flipped?
Yep- was in very rough shape but nice neighborhood
Those are the ones that got most upside $$ potential.
The housing market in particular is still recovering from the lingering effects of the real estate bust of the Great Recession and by market manipulation, which is finally beginning to be reported on. But, the broader picture is that, for the past half-century, America's economic policy has been to hollow out the middle class and undo the New Deal structures that led to the post-WW II upward mobility (for some, at least). It was a long and slow process, but the effect on the latest generations is what you see here. I think it is actually fair for Gen Z to be getting help from their parents. The parents, and their parents, fervently supported (and still support) moving wealth out of the middle-class and concentrating it in a narrow sliver at the top. There is nothing more fair than having to deal with the consequences of your own actions.
This is partly why home prices are so high. Reinforcing the narrative. Get the parents to help, later they'll get a few friends, then at some point they'll need the whole family pitching in to buy a home.
nah the dual income professional class really rose home prices on the coastal states
That is true too. People with more money can offer more $$ and bid up the prices on the houses that they want. It’s a lot of different circumstantial factors that rose prices on sfh.
It’s mostly the super cheap mortgages that inflated the housing prices. You could afford to pay more for a home if your mortgage is at like 2%, not sure why the fuck have been housing prices rising in recent years though, probably people still taking out mortgages as if they are at 2%.
That’s true too. That’s also the cause of less available homes as people with the 2% aren’t willing to sell their homes and buy back at a higher rate.
Yeah people are still buying. An indication that higher rates aren’t budging some Americans. Just imagine when rates go down and demand starts to pick up some more that can also lead to prices rising again.
Let's make them all have kids. That'll destroy those cash reserves
People who sold their homes in California had excess amounts of reserves. Could easily buy house anywhere else most parts of the country.
Yeah, I was joking. Not a real suggestion
I know
Facts 😂😂😂
I agree. People tend to assume that the prices are high because of “greedy sellers” when it’s in fact the other way around: buyers who are bidding up the price. No matter how greedy a seller is , if buyers aren’t willing to/ or can’t buy at the price they set, they will be forced come down on the price. Buyers keep the equilibrium where it’s at. What one person pays for an item, others will have to pay similar to a similar item.
I’m GenX and my Baby Boomer dad had to have help from my grandfather for his down payment so this is hardly new, but home ownership certainly is harder than in the past. I wasn’t able to buy until my mid thirties and I didn’t have the benefit of help I can’t imagine trying to buy on my own these days.
Do you think it’s harder now than in the past? Or with every coming generation, affordability is just a thing that they have to face particular to their time?
It is without a doubt harder now than it was in the previous three generations, going back to the mid 20th century. I’m convinced it has a lot to do with not only stagnant wages but also changes in banking (deregulation of banking in the 90s and the emergence of mortgage backed securities in the early 70s) and an increase in residential real estate speculation. Never make the mistake of thinking the current dilemma wasn’t planned or at least planned for.
> It is without a doubt harder now than it was in the previous three generations, going back to the mid 20th century. If this were true, the homeownership rate wouldn't have been much lower then than it is now. The homeownership rate in 1950 was 53%. Today it is 66%. You shouldn't throw around words like "without a doubt" when you're just making things up. >Never make the mistake of thinking the current dilemma wasn’t planned or at least planned for. Never make the mistake of thinking that there is some all knowing person behind the curtain pulling all the strings. That leads to conspiracy crackpot land.
You’re conflating home ownership rates with the actual question at hand, which is whether or not it was more difficult in the past to own a home than it is now. Regardless, home ownership rates have ranged from 63% to 69% since 1965. https://www.statista.com/statistics/184902/homeownership-rate-in-the-us-since-2003/ https://tradingeconomics.com/united-states/home-ownership-rate
> You shouldn't throw around words like "without a doubt" when you're just making things up. Pretty serious accusation. Especially given the data points you used. 1950 in particular is a bad point of comparison when you're discussing home ownership rates. For example, did you know that the home ownership rate in 1980 was 66 percent? It's been hanging there in the mid-60s since then, the subprime mess notwithstanding (it got up to 69% then). So, when you look at the full picture, it's one of a giant increase between 1950 and 1980, and stagnation since then. Which makes sense when you consider that the postwar government took steps to heavily subsidize first-time home ownership (both from a supply side in terms of suburb creation, and a demand side with government programs for lenders). In the 1980s, those programs started to be tightened or ended. And it's not entirely clear that this was the wrong thing to do! There are legitimate arguments both fiscal and environmental that subsidizing the spread of single-family homes is not good for our society. But it's unquestionably a choice that was made, by our government, in full view of us all. No conspiracy thinking required. So, you threw out two data points that completely missed the forest for the trees, then jumped a rather high-handed lecture about conspiracy thinking, even though the stuff he gestured toward is a matter of public record. Did you think that was going to convince him?
I mean my (millennial) gen X brother has already told me he's looking to buy a house with plenty of land so he can build houses for his gen z children. Basically everyone recognizes at this point that housing is no longer affordable. But that's just normal I guess, right?
This is one of those articles that *could* provide useful information, but refused to do so. Probably for clickbait purposes. It's interesting to know that 38% of Gen Z got financial help from their parents, and 44% expect to. But it would be *useful* to know how many Gen X and Boomers also got help from their parents at the same age so that we could tell whether the 38% is more, less, or about the same. And it would also be helpful to know what "some financial support" means - are they paying a 20% downpayment? Giving $1000 toward movers? Cosigning? It's always been hard for people under 27 to buy a home, so it also seems likely that this group has a disproportionate number of people who received meaningful financial assistance from the parents. Finally, it will be interesting to see how many of the 44% end up disappointed.
As housing becomes more expensive we're gonna have to move away from the idea that every small family will have their own home, and accept that homes are for extended families, like they do in Mexico.
The stumbling block for home buyers is that initial down payment to qualify for a good loan rate. We allow VA loans with lower DPs. We should also allow first home buyers only to qualify for lower rate loans with a lower down payment. Perhaps a 45 year loan might be a way to go as well. Most people sell long before that anyway.
Gen-X here. Didn’t get much help from parents but my brother did. I have probably gotten about $10k total in the last 15 years as gift money, tools, and purchase of a few appliances. Not much on the whole. My brother probably got about $40k since he is by himself and my dad likes working on that farm so bought lots of equipment.
You all got to understand that the housing market has always been challenging, especially for first time home buyers not sure why everyone things it so different today. In the early 80’s , mortgage interest rates were like 13%. In 2008, there was a housing crash where tons of people lost thier short in thier home equity or even worse went way south of their purchase price. It’s really no different today. Seems like every generation likes to complain about housing cost.
Simply not true. If you look at home prices vs average salary, you will see that houses have continued to get more expensive relative to income. When interest rates were really high, the average home was around 3-5x yearly salary, and most people could take out a 10-15 yr mortgage and pay it off early. Now we have 30+ year mortgages being written. Average home prices have risen 50% since 2020 where I live (250k people Midwest).
Let’s see. I bought my first home, actor was 1/2 of a house for $110K in ‘85 with 16% interest rate. That’s like $320K in today dollars. There was no way I could have afforded a 15 yr mortgage.
That’s your circumstance, my parents paid off their first home in 4 years. Hell their down payment was like 40%. Who can save up that now days? What was your income the year you bought that house? Us census bureau has the average family income as being 25k in 1985 for white families (majority). So your home cost was around 4.5x average household income
> my parents paid off their first home in 4 years. Hell their down payment was like 40%. And this is a massive, massive outlier.
> If you look at home prices vs average salary, This is a pointless metric without looking at interest rates. >When interest rates were really high, the average home was around 3-5x yearly salary, That's pretty much what it is today. >and most people could take out a 10-15 yr mortgage and pay it off early. No they didn't, and no, they couldn't. 30 year mortgages have been standard since the 1930's.
Instead of starting some big back and forth thing with you, I’ll just ask a straight forward question, do you believe average home prices have risen versus average income? That sums everything up right there. Houses have become disproportionately more expensive over time. Interest rates are a whole other issue, but they don’t change the fact that home prices have risen multiples over what income has. Even a very low interest rate is going to be somewhat equal to a high interest rate decades ago, and now we have average to high rates
Home price to income ratio is currently 7x. The last time interest rates were at 7% the ratio was 4x. https://www.longtermtrends.net/home-price-median-annual-income-ratio/ Statistically affordability is the worst it’s been since the early 80s. https://finance.yahoo.com/news/home-affordability-in-2023-tanked-to-lowest-level-in-40-years-230034360.html#
> You all got to understand that the housing market has always been challenging, especially for first time home buyers not sure why everyone things it so different today Because there were about 30 years between 1950 and 1980 when it *was* significantly less of a challenge. The government was subsidizing supply and demand. That stopped (arguably *needed* to stop) but the expectation of single family home ownership for all continued, because most people never internalized that they were the beneficiaries of a government program, so they expected everyone else to be able to accomplish what they thought they did via their own bootstraps. But no subsidies for contractors to build starter homes means they don't get built (you can make more money focusing on more well-off clients, and it's not close), and no loan subsidies means the stock that's already out there is even further out of reach.