The young generation is ‘blameed’ for wasting money but can’t buy a house
Millennials (those born in the early 1980s to mid-1990s – early 2000s) are criticized for many things, but the truth is that splurging on avocado toast and everyday lattes is not a big deal. The reason why they can’t own a home.
With the median home price in the US currently as high as $330,000, and decade-high inflation outstripping wage growth, the current generation between the ages of 26 and 41 is feeling tremendous pressure as they enter the early stages of their lives. financial calculation, forcing them to give up the idea of getting married and having children.
It’s easy to say that young people should buy a home when home prices fell after the 2008 financial crisis. However, even then, this generation is carrying a heavy burden of debt and finding work in a tough market. towel. Both the 2008 crisis as well as the Covid-19 epidemic came at an important stage in their career development.
The four charts below show why the dream of home ownership and financial stability is far away for more than 70 million Americans.
Young people of working age carry more student debt than previous generations. Median earnings fell 3.6% in 2008 – the biggest one-year decline since 1967, continuing to decline through 2012.
According to economic data from the New York Federal Reserve Bank, consumers between the ages of 18 and 29 had total debt of $1.01 trillion in 2007. Student loans accounted for $211 billion of that debt — high. more than 40 billion USD compared to the group of 30 – 39 years old.
Those in this generation who have entered the workforce have experienced a widespread job loss crisis that has reduced their jobs by as much as 2.2 million, according to the Bureau of Labor Statistics. With a constrained labor market, millennials fresh out of college have limited job prospects and little bargaining power, sometimes competing with more experienced workers.
Median household income in the US increased 3.5% from 2012 to 2013 as home prices rose 6.5% over the same period. Only 47.9% of young Americans own a home in 2020. At age 30, young people own a home at 42%, compared with 48% of Gen Xers and 51% of baby boomers.
Currently, Americans are paying more to own a home. A single-family home averaged $383,000 in February, according to Zillow. House prices rose 20.3% last year. Faced with rising house prices, 18% of millennials say they may have to rent a house for the rest of their lives.
When house prices hit a record high, the cost of living for families also increased.
Even as the US economy begins to show signs of recovery, consumer purchasing power is weaker as the cost of living rises faster.
For middle-income families, the US Department of Agriculture estimates that the total cost of raising a child until his 18th birthday, including food, clothing, transportation, health care, and more, can reach 204,060. USD in 2009. By 2013, this figure had increased to 245,340 USD.
In 2022, household budgets were higher as inflation hit a 40-year high of 7.9%. For those looking to have children, financial planning and the amount of money needed to support the family can increase even more than before.
As a result, many Americans are choosing to stay together without getting married. A 2019 survey by Pew Research Center shows that the number of adults who have cohabited has increased while the number of married has decreased.
Source: Bloomberg
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