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The End of Ownership: Why Aren't Young People Buying More Houses?
The Atlantic ^ | 2/29/12 | Derek Thompson

Posted on 03/01/2012 6:02:37 AM PST by Haiku Guy

Richer couples! Cheaper mortgages! Millions of unwanted houses! Despite all this, young home owners declined for 30 years, even before the Great Recession. Here's how the American Dream shrank.

When older generations wonder what's the matter with Millennials, they often judge their younger cohorts against such financial and social benchmarks as finding a job, getting married, and buying a home. These observations often come wrapped in weak science -- "blame Facebook for their indolence" -- or dripping with judgment -- "blame their parents for making them weak." The science is weak, but the observations are true. Fewer young people are finding jobs. Fewer young people are getting married. Fewer young people are buying homes.

Between 1980 and 2000, the share of late-twenty-somethings owning homes had declined from 43% to 38%. The share of early-thirty-something home owners slipped from 61% to 55% in that time. After the boom and bust were over, both rates kept falling. The rate of young people getting their first mortgage between 2009 and 2011 was chopped in half from just 10 years ago, according to a recent study from the Federal Reserve.

(snip)

It's no wonder that in an environment that punishes the long-term faithful, more young people are planning month to month.

(Excerpt) Read more at theatlantic.com ...


TOPICS: Business/Economy; Culture/Society; Extended News; Government
KEYWORDS: millennials
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To: Michael Barnes

We live in a small town in Pa. Not much going for it except low crime, lots of churches, gun-friendly, and very low taxes. Our house is over 100 years old, over 2000sf, and the property tax is $350 a year.
If people would shop around more they’d find affordable homes. The trade-off is, they might not find the job they want, or keep the one they have. So they go on paying 10x, or 20x, what I pay in property tax, to keep the job they need to pay the tax...


41 posted on 03/01/2012 8:02:18 AM PST by HomeAtLast
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To: yefragetuwrabrumuy

The problem is that everything that people really want has been larded up with extraneous expenses, so they can’t afford it anymore. Willie Sutton used to say he robbed banks because that is where the money was. Nowadays, people run universities or charge property tax.

The result is that young people cannot afford to graduate without crushing death, get married, start a family or buy a house. Their decisions to forgo these things are perfectly rational, because the costs of doing all of these things is just so damn high.


42 posted on 03/01/2012 8:08:52 AM PST by Haiku Guy ("The problem with Internet Quotes is that you never know if they are real" -- Abraham Lincoln)
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To: Haiku Guy

crushing death = crushing debt

Damn You Autocorrect!


43 posted on 03/01/2012 8:10:03 AM PST by Haiku Guy ("The problem with Internet Quotes is that you never know if they are real" -- Abraham Lincoln)
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To: yefragetuwrabrumuy
Back then, a house that cost $10,000 to build could sell for $17,000 on a 30-year lease. Today a house that costs $30,000 to build can have a price of $300,000 or more.

One thing you are forgetting is the cost of regulation that has ballooned over the last 40 years. The first thing you need to do before subdividing property is to have the government inspectors come in, do the A2survey, the Environmental impact study, the soil type engineering survey, and in some areas the school use impact study -- That's right, permits can be declined because the town determines that Property taxes on that house will not cover the school costs of the house.

it's to the point that in order to operate in certain areas that contractors and developers need to budget for "Unforeseen Incidentals" (AKA bribes) and all of these costs need to be included in the cost of the house.

44 posted on 03/01/2012 8:11:46 AM PST by Cowman (How can the IRS seize property without a warrant if the 4th amendment still stands?)
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To: Haiku Guy

Today, home ownership is no longer an investment. You can rent a condo for 1/3 of what it was 4 years ago.


45 posted on 03/01/2012 8:16:38 AM PST by org.whodat
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To: GlockThe Vote

We don’t own our homes or our property, we rent both from the tax man and insurance company.

All of these factors are passed on to renters but renters are accepting less and less, smaller and smaller to just stay even.

The home in the suburbs will eventually become a relic of the past for the most part. The collective block apartment will become the norm. Less is becoming the norm for young people. They have learned to live in a fish bowl much easier than we have.


46 posted on 03/01/2012 8:24:06 AM PST by Sequoyah101 (Half the people are below average.)
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To: yefragetuwrabrumuy

Good one, but today a house that cost thirty thousand to build is called a mobile home. It cost 45 dollars a finished foot to build a home years ago. That is the big problem today, home prices have dropped but building materials has not.


47 posted on 03/01/2012 8:53:59 AM PST by org.whodat
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To: Haiku Guy

Why buy a house when you know Obama is going to tax the hell out of you to support redistribution of wealth? FUBO!


48 posted on 03/01/2012 10:34:43 AM PST by AngelesCrestHighway
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To: Haiku Guy

Jobs for young people are increasingly rare in a Communist, post-industrial economy.


49 posted on 03/01/2012 11:02:41 AM PST by TexasRepublic (Socialism is the gospel of envy and the religion of thieves)
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To: frithguild
Who is John Gault?

I don't know. Could he be a friend of John Galt?

50 posted on 03/01/2012 11:03:17 AM PST by zeugma (Those of us who work for a living are outnumbered by those who vote for a living.)
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To: zeugma

doh!


51 posted on 03/01/2012 11:34:22 AM PST by frithguild (Withdraw from the 1967 Treaty on Outer Space. It bans private property and profits.)
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To: Haiku Guy

The comments I read and heard at or near the trough of a housing cycle are as ridiculous as the comments I read and heard neaer the peak.

This trough may be the worst in my lifetime, but the comments aren’t really any different than I heard in 1996.

“Housing will never come back”.

“Prices will never rise again”.

“Housing will never be a good investment again”.

“Rent - buying is just throwing your money away.”

“Clinton destroyed housing.”

I heard all this back in 1996.

I agree that this housing bust is the worst since the Great Depression and is accompanied by the worst economy since the Great Depression. But there is no changing human nature, or economic cycles, including the booms and bust in real estate.

Mark my words, we’ll have a new housing boom no later than 2025.

Yes, I’ve read all the posts about demographics & etc. No, I don’t believe it. As long as their are couples there will be motivated home buyers. As long as they can get credit, they will buy homes. That is never going to change. All that changes is that the boom/bust cycle switches back in forth.

Right now we are in a trough, and we still haven’t hit bottom of the trough. We have to clear a lot of debt and foreclosures and excess inventory. New housing starts have to remain dead for several more years. At some point the slack in the inventory will be taken up and a new boom will begin.

It may take to 2030 to form, but mark my words, human nature and the boom/bust housing cycle will never change. So I am just loving it reading all of the doomage comments from all Freepers. It is music to my ears even more than it was in 1996, because at that time I guessed right, but now I actually KNOW better. There is always another housing boom and it is never more than a generation away.

You can’t stop natural cycles based on the greed and dreams and ambitions of people because you can’t change human nature.


52 posted on 03/01/2012 11:55:46 AM PST by Freedom_Is_Not_Free (The only priority: Repeal Obamacare)
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To: frithguild
“but ony for thse who meet underwriting guidelines that are historically stringent.”

Not really. I do this for a living; people I see are probably more qualified than before; they have cleaned up their credit.
We may hassle you more for more documentation; but it's not that hard to get qualified overall.

53 posted on 03/01/2012 12:00:36 PM PST by HereInTheHeartland (I love how the FR spellchecker doesn't recognize the word "Obama")
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To: The Iceman Cometh
Why bother buying a house when you have to get rid of it in the divorce 3 years after getting married?

Why not just save a step and just find a woman you can't stand and buy her a house?

54 posted on 03/01/2012 12:06:29 PM PST by central_va ( I won't be reconstructed and I do not give a damn.)
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To: TexasRepublic
Jobs for young people that pay a decent wage are increasingly rare in a Communist, post-industrial outsourced H1-b economy.

Fixed.

55 posted on 03/01/2012 12:08:44 PM PST by central_va ( I won't be reconstructed and I do not give a damn.)
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To: bmwcyle
“Two words -— Property Taxes”

Not being argumentative but do you think you are not paying taxes when you are renting? Who is paying them? The home owner is “responsible” for them but believe me when you write that check every month you are “paying” for them. If you aren't you wont be renting that place for long because the state will come take the house or the owner will eventually go bankrupt...

56 posted on 03/01/2012 12:26:49 PM PST by Syntyr (Happiness is two at low eight!)
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To: Syntyr

People are not buying due to affordable monthly payments. It is the taxes that are driving the payments up.


57 posted on 03/01/2012 1:30:04 PM PST by bmwcyle (I am ready to serve Jesus on Earth because the GOP failed again)
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To: Lou L

It’s easier to move away from property taxes when you’re a renter - to another town or county or much further away.

Renters can play the market. Owners are largely stuck - especially these days.


58 posted on 03/01/2012 1:33:36 PM PST by sbMKE
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To: HereInTheHeartland
not that hard to get qualified overall

Not my experience by a longshot. I went through a year and a half of the extra documentation two step and never closed. In the 90's, it would have been no problem.

59 posted on 03/01/2012 1:38:24 PM PST by frithguild (Withdraw from the 1967 Treaty on Outer Space. It bans private property and profits.)
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To: frithguild
That can happen also.
If you are refinancing; it might be easier than a few months ago; depending on who is servicing your loan.

If a good lender servicing your loan, and it is owned by Fannie or Freddie; you might qualify for the HARP program.

That definitely makes things easier. Or FHA or VA loans can be done on a streamline basis.

60 posted on 03/01/2012 1:44:12 PM PST by HereInTheHeartland (I love how the FR spellchecker doesn't recognize the word "Obama")
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