Skip to comments.The End of Ownership: Why Aren't Young People Buying More Houses?
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.
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 ...
Housing is a dead end. Skyrocketing property taxes to pay for the union thugs, higher and higher insurance premiums, etc etc.
Energy prices are skyrocketing.
Etc. Young people are learning how the new rules work and want no part of it.
RE: The End of Ownership: Why Aren’t Young People Buying More Houses?
1) Because Youth Unemployment is the highest its been in decades.
2) Many young college grads are struggling to pay their college debt.
3) Government is ARTIFICIALLY HOLDING UP home prices, thus, distorting market prices, preventing them from reaching their natural market level.
that looks like 3 pretty good reasons
Agree with you 100% - home ownership allows government to put the shackles on you. Parking fees, wheel taxes, special assessments, property tax hikes.
In Milwaukee, the housing market has been crushed in part by runaway property taxes. An extra $200 a month in property taxes means almost $40,000 of principle that can’t be paid on a mortgage.
Most people budget on total monthly payment, so seemingly small hikes in government overhead have huge impacts on the market and housing “investments.”
I would agree, home ownership isn’t what it used to be. It used to be an investment, now, it’s pure loss on the balance sheet. With the ever shrinking liberty that comes with home ownership, the benefits aren’t there.
But, there is a societal factor. Younger people have been groomed to be good commies. The would gladly accept a government cooperative type shelter.
The previous generation established certain benchmark requirements for what constituted the Good Life.
You had to have a House.
You had to have a Car.
You had to have a College Education.
You had to have a Family.
The government saw that the people all really, really wanted these things, and moved in to profit from this demand.
If you want a House, you have to pay an every increasing Property Tax. You have to pay a Transaction Fee. You have to pay for Permits and Services and Education and a million other things. When you buy a house, you are strapping yourself into the Government Money Milking Machine, and who wants to be strapped to that?
If you want a Car, you have to pay a Registration Fee. You have to pay Plate Renewal Fee. You have to pay the Gasoline Tax. If it is a nice car, you have to pay the Gas Guzzler Tax. You have to buy insurance and pay taxes on that. You have to buy a certain kind of car with a certain kind of engine. When you buy a car, the Government puts it’s hand into your pocket, and they never take it out.
If you want a College Education, you have to pay inflated tuitions, registration fees, book fees, access fees. To pay the tuition and fees, you have to submit to loans, and pay the interest. You have to pay for bloated college staffs, where Administrators outnumber the Faculty. You have to buy books at inflated prices, food at inflated prices, housing at inflated prices and supplies at inflated prices. When you buy a College Education, you commit yourself to a lifetime of expenses that far outstrips the increased earning potential the education represents.
If you want to have a Family, you have to commit yourself to take on all of these expenses for yourself and for the next generation. Meanwhile, the irresponsible are subsidized at every turn, and you pick up the cost of that, as well.
Is it any wonder that young people are refusing to adopt these things. We have priced them out of the market.
4) The X-box works better in the basement where it is darker and the bigscreen seems brighter.
All those things lead to the American ideal of independence.
This is one thing the left cannot stand - individual independence.
You can’t control independent people.
If you make the costs of the American Dream Package high enough, and make the rewards of the Sociental Leech Package good enough, young people will make the rational decision to opt out of productive society and go on the dole.
This is a false assumption. True, mortgage rates right now are at an all time low, but ony for thse who meet underwriting guidelines that are historically stringent. A late student loan payment or an unfavorable LTV, and you don't qualify. Underwritng standards even in the 1990's were more relaxed probably due to comopetition. You had many sources of potential funding for mortgages that filled niches - say if you had one late student loan payment, but otherwise qualified. Now, all you have is government programs. You can't argue with city hall, if you don't qualify. Once you have tried, you end up asking, "Who is John Gault?"
The more I think about it, the more I am committed to working for the rest of my life to provide whatever subsidies my children require to make sure their costs of being a productive and responsible citizen are achievable. This is a personal decision for my own family. I cannot and will not subidize the rest of society.
If that means picking up their housing down payment, property tax bill, paying for their car insurance, children’s tuition and whatever fees and taxes as yet undreamed of, that is what I can do.
Who is John Gault?
(5) Why bother buying a house when you have to get rid of it in the divorce 3 years after getting married?
Also, transient pre-adulthood now increasingly includes grad school after a few years and no settling down into marriage until around age 30 for most professionally tracked young professionals.
Because most of the young don’t have stable jobs.
Well, when property taxes, city ordinances and grass care are reasons to steal property in cities, why would there be incentive?
It started with Judge Souter on landgrabs.
You’re correct. But there’s an even more profound reason they aren’t buying homes. Taxes, as you’ve pointed out, are one major consideration; they recognize that with the property tax burden no one ever actually “owns” a home; even if the mortgage is paid off, rent must still be paid to the gov’t.
A bigger reason, in my opinion, is that they’ve seen what their parents have gone through and are going through and want no part of it. And what they’ve seen is specifically this: in the county in which I live and in and around every major urban area in the state, the Feds and the State/County Housing authorities have been and are continuing to build MILLIONS of Section 8, Low income housing projects. Even in this crap economy, as I type, another huge project is being built in the northern part of our county.
And these projects follow a pattern: they are always constructed on major streets next door to middle and upper middle income residential subdivisions. There are two effects immediately felt; 1) the middle and upper middle income people can’t leave their neighborhoods without passing the Section 8 housing and 2) crime in the area immediately soars. Long term, i.e. 9 to 12 months after construction of the Section 8 housing, homes in the adjacent neighborhoods can’t be sold and end up being sold to investment buyers who turn the homes into Section 8 housing; the thing so few know is that Rental Homes have become an industry because under the programs administered by HUD, if you place your house up with HUD, they’ll pay the rent regardless of whether its occupied or not!
What we’ve experienced is that entire swaths of the county have been economically devestated by this phenomenon. My daughter who is an EMT responded two nights ago to a shooting/drive by just blocks where she grew up; the house we were forced to sell because of the growing crime problem. What I’ve seen is that her 20/30 something generation can’t even return to their high schools for re-unions because the schools are now in high crime areas.
With that example of Gov’t induced property value destruction on a scale this massive, the last thing these people want to do is sink a large sum of money into residential housing. Would anyone want to buy a home in Beirut/Bagdhad/Somalia?
I'm pretty sure that even if you rent, part of your rent goes to pay for property taxes that are charged to your landlord. Thus, ALL housing costs go up, not just for those who own houses.