Home Economy Millennials barely have the chance to buy a house. Here's what...

Millennials barely have the chance to buy a house. Here’s what can be done:

This is my life over the past few months in Austin, Texas. Before working at 7am I check out the new listings that may have been marketed. “Check in on Thursday,” said the real estate agent. “That’s when the best brokers will post. The house will go live on weekends and disappear on Sunday night.”

They are right. One day I looked at a house, and the next day, a small red icon said “pending”. Some people say “fallback”, that I had to use Google. In short, I am having a toast. The real estate market is currently in complete turmoil, and it is time for the federal government to take steps to increase affordable housing.

Perhaps the federal government should step in, but this is a terrifying argument in favor. The hot housing market has not cooled due to federal incentives for affordable housing construction.

Most millennials are renters and nearly half of those aged 18 to 34 are rent burden – that is, 30% or more of their income is carried over to the rent.

Sure there are some people who are burdened with rent, but this definition is terrible. Budgeting a third of your income for housing has been standard advice forever.

A recent Unison report shows nationwide need almost 15 years to save 20% upfront for a mid-priced home if you are on average income. In Los Angeles, someone must saving for 43 years; in New York City and Miami, for 36 years; and San Diego, 31 years old.

Median income is not suitable for middle-priced homes, because only 65% ​​of Americans own it. A middle-income person is looking for a starting home, and perhaps not a starter in a desirable market.

That is not good. We, as a nation, need to find a way to give young people a slice of the pie, a chance to grow their wealth and invest in something important for the future. their. The thought of letting young middle-aged to old age without a major stake in the economy is scary to think of.

Housing can be affordable. Housing can be a good investment. It cannot be both. Affordable housing approaches will make it a worse investment.

We know that one of the best methods for building and maintaining wealth, especially wealth between generations, is home ownership. For low and middle income earners, nearly 50% Their net worth is achieved from equity in their homes.

This is wrong. We know that many low and middle income people have invested money in their homes and now their net worth is mainly determined by the increase in home prices. We also know that the rich disproportionately invest their money in stocks and they get better long-term returns than the middle-class homebuying.

If you are worried about building and maintaining wealth, you need to have yourself some stock, not some real estate. Most American families have overweight housing in their portfolio.



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