Home & Family / Politics

Millennials Can’t Afford Homes And That’s A Big Problem

AMAC Exclusive

millennials

For years, it’s been difficult for millennials to catch a break, especially when it comes to being able to afford a home. And it’s only getting worse in 2021 for that generation, comprised of individuals born between 1981 and 1996. Some have claimed that millennials don’t want to own a home, and are satisfied with renting. Nothing could be further from the truth—a whopping 89% of millennials say they want to own a home. They just can’t afford it.

Many millennials were just entering the workforce in 2008 when the financial recession sent the American economy tumbling. This turned out to be only the first of many crises that have marked their adult economic lives. Millennials have also been the hardest hit by the student debt crisis, with millions unable to pay off their student loans fast enough to begin saving for things like having children and retirement. Then the COVID-19 lockdowns again upended lives and killed jobs, right when many were beginning to get back on their feet. Now, as the country struggles to recover, ill-advised economic policy from the Biden administration and the resultant spiraling inflation have made it increasingly difficult for millennials to realize the American Dream of being able to buy a home.

The National Association of Realtors (NAR) tracks home prices in 183 metro areas across the country. As of early August, in all but one of those areas, home prices were higher than a year ago. In 94% of them, median prices rose by more than 10% from the previous year. Nationwide, the median single-family existing-home sales price rose 22.9% from a year ago to $357,900—the highest price since records began in 1968. Most of the increases have taken place in the southern and western portions of the country. But some localities experienced even greater increases in prices, such as Pittsfield, Massachusetts (46.5%), the Austin, Texas metro area (45.1%), and Naples, Florida (41.9%).

A recent lumber shortage has been a major driver of the crisis, with overall prices jumping by nearly 200% since April 2020. But despite the fact that lumber prices have finally begun to stabilize, housing prices continue to rise, and the U.S. is desperately short on homes; Freddie Mac recently estimated the number to be 3.8 million, but the actual figure could be higher. There have been twenty times fewer homes built in the last ten years than any decade since the 1960s.

Homebuyers are feeling the pinch. According to a survey by Fannie Mae in July, only 28% said it was a good time to buy a home—the lowest number going back to 2010. Nor are the record low interest rates alleviating the pain of higher prices. During the second quarter of 2021, the average mortgage payment for a single-family home rose nearly 17% from a year ago, going from $1,019 to $1,215.

A good deal of the rise in prices is being driven by cash purchases of homes, leaving those without large cash stockpiles in a more difficult position, which includes many millennials who are still in the early stages of their careers. The NAR reports that half of existing-home buyers who used mortgages put at least 20% down—which has only happened three times over the last decade, and all three times occurred since last fall. Moreover, FHA loans, which usually help first-time homebuyers, accounted for only 10% of home purchases in the first quarter of 2021, the second-lowest percentage since the housing and financial crash of 2008.

What does this all mean for millennials? It means far fewer of them are able to purchase homes than previous generations.

Even before the pandemic, millennials struggled to purchase real estate due to rising prices and the prevalence of student-loan debt. As late as 2019, 69% of millennials said they couldn’t afford a home. As of 2019, first-time homebuyers paid 39% more than first time homebuyers nearly 40 years prior, with only 13% of millennial renters expected to be able to afford the traditional 20% down payment within the next five years.

That was all before COVID. The record inflation and rise in home prices has made it even harder for millennials to get ahead. Just as millennials were beginning to recover from the worst economic and housing crisis of the 21st century, they got hit with another hurdle thanks to the Biden administration’s runaway spending plans that are further fueling inflation. The record demand for homes has caused some homebuilders to put a pause on building more homes as they race to complete the ones they’ve already committed to, exacerbating the housing crisis even further.

To make matters worse, the Biden administration is going after the suburbs and single-family housing that have been the pathway to home ownership for generations.

Owning a home brings stability, independence, and a degree of self-respect that all Americans should have the opportunity to earn if they work hard and save wisely. Homeownership also encourages people to be more invested in their communities, strengthening the country as a result. If an entire generation—the largest so far in American history—cannot afford to purchase a home, the consequences could be disastrous, making economic uncertainty the new normal and threatening the very existence of the American middle class.

It’s not an accident that millennials are much more open to socialism than past generations. With skyrocketing costs of living—preeminently in housing costs (a basic necessity)—there is a generational sense among millennials that the “free market” is not working for them, which would justify using the power of the state to make up for such “failures.” If the housing crisis persists, not only millennials, but the rising Generation Z could find themselves much more willing to depend on Uncle Sam than on a “free market” which, for them, has proven anything but dependable.

We hope you've enjoyed this article. While you're here, we have a small favor to ask...

As we prepare for what promises to be a pivotal year for America, we're asking you to consider a gift to help fund our journalism and advocacy.

The need for fact-based reporting that offers real solutions and stops the spread of misinformation has never been greater. Now more than ever, journalism and our first amendment rights are under fire. That's why AMAC is passionately working to increase the number of real news articles we deliver WEEKLY, while continuing to strengthen our presence on Capitol Hill.

AMAC Action, a 501 (C)(4), advocates to protect American values, free speech, the exercise of religion, equality of opportunity, sanctity of life, the rule of law, and love of family.

Thank you for putting your faith in AMAC!

Donate Now

If You Enjoy Articles Like This - Subscribe to the AMAC Daily Newsletter
and Download the AMAC News App

Sign Up Today Download

If You Enjoy Articles Like This - Subscribe to the AMAC Daily Newsletter!

Sign Up Today
Read more articles by AMAC Newsline
Subscribe
Notify of
22 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments
Beverly Deck
1 month ago

It’s not that they “can’t afford homes”, it’s that 1. They WANT a bigger, nicer home than they can afford, and 2. They aren’t willing to WAIT, and WORK, and SAVE, until they can afford what they NEED, not what they WANT. My son is a millennial. He has worked as a Youth Pastor and Christian schoolteacher and his wife is a stay-at-home mom. They bought their first home last year. On one very modest salary. It can still be done. Their kids might have to share a room, and they may not be able to afford cable, but that’s OK.

Becky
1 month ago

And yet…It is that generation that mostly votes for Communists.
Their ‘thinking’ needs repair.

JEFF TURMAN
1 month ago

Here it comes…. “THE EVIL RICH PEOPLE AND BIG CORPORATION MADE IT IMPOSSIBLE TO BY PROPERTY”Here’s a question for the clowns feeling sorry for themselves…. nevermind, it’s a waste of my time trying to educate the willfully ignorant..

Chuck
1 month ago

Millennials have a major philosophical flaw: “Vote blue. No matter who.” No help there.

Joseph McDonald
1 month ago

It would help if Millenials actually wanted to work.

Jim Jolly
1 month ago

Washington has really screwed the people they are suppose to be representing and helping. China Joe and his group have to be the worst of all. It’s not only the Pelosi Democrats but the Crossover Republicans looking at what is best for their political carrer. All of Washinging should be ashamed, BUT THEY ARE NOT!

Nick
1 month ago

Wow, I guess nobody here got an affordable rate FHA loan back in the day, huh? OK cool!

george
1 month ago

There is another tiny problem. Many went after student loans to get that “great” education that would enable them to become millionaires and pay off the incredibly high loans in a short time. Then follows economic crises which prolong their payment schedules and increase the interest. Apparently no one told these guys that having a doctorate in philosophy or being another Master of Business Administration were not the fields that would survive economic turndowns. Left a lot of people without assets.

Barb
1 month ago

Just like everything else in this country the housing prices have climbed unreasonably high! GREED has a chokehold on America!!!

oren
1 month ago

So I guess the next bunch who feel they are “entitled” to have a home will be the millennials. They’ll want subsidized mortgages paid for by everyone except themselves. Sorry, doesn’t work like that. I graduated from college in 1973. I went to Vietnam in 1967 and then came home to finish school in engineering. I worked horrendous hours and traveled where ever I had to go to maintain a decent salary. I bought my first home straight out of college. I literally built my second home. I paid for the framing and sheet rocking but everything else I did. Took awhile but the payments were held down. The next home I had to buy due to a relocation. Spent one year in the house and then bought a piece of land. Lived in a mobile home while again I built another home starting in 1998. Took about 3 years to build it. Today, it’s paid for. We paid it off 2011. If you want something, you have to work for it. It isn’t handed to you.

Barbara D
1 month ago

Millennials, I’ve been told, don’t want homes. When I left CA three years ago, they were building hundreds of 6-story high rise apartments and condos because they said “Millennials didn’t want the cost of property upkeep, nor the tie down of location.” Since CA already has restricted water usage due to overpopulation, and brown-outs due to no power plants being constructed for over the last 40+ years, the handwriting on the wall is plain to see: Living in the most expensive state without enough water and power is going to be very unpleasant. And where, and how, are all those electric car users going to charge their cars when the power is cut?? And on top of all that, where do you think all those illegals crossing the border are going to live? In the nearest “Sanctuary State – CALIFORNIA” of course. Yeah, the coastal state is becoming a mecca for all that is “progressively liberal” and “progressively illegal.” Needles, druggies, homeless and feces cover the streets of San Francisco and the same is happening in Los Angeles now. Welcome to the “City of Angels.” Pelosi and Newsom have advanced the mess to this crisis level, but they live behind gate guarded communities, so what do they care. They just want the votes, legal or illegal. They don’t care. And that’s the problem with Democrat politicians: THEY DO NOT CARE ABOUT AMERICA.

Becky
1 month ago
Reply to  Barbara D

Very well said. And it is the millennial generation that espouses how wonderful bringing in foreigners is. Too dumb to understand the housing effects this causes.

Myrna
1 month ago

It is not just now that young people recently graduating college can’t afford to buy any home. We started out with (small) college loans to repay and a good job. We would not have been able to buy a home without family assistance. That was after gas prices skyrocketed. 1977

Kyle Buy you some guns,and learn how to shoot
1 month ago

mR. dAVE BELOW IS CORRECT. tHERE IS AFFORDABLE HOUSING EVERYWHERE. tHESE mILLS. WANT A HALF MILLION DOLLAR HOME FOR 10k AND THE GOVT. TO PAY THE REST. aLSO LOAN MONEY IS SO CHEAP NOW. mY HOME WAS AT 7%. wISH I COULD HAVE GOTTON 2%. kYLE l.

David Spade
1 month ago

Suggesting that Uncle Sam might help those who cannot afford a home is mere folly. The government wants to control people, and that control would include housing. The government does not build single family homes for millenials or anyone else. The government would, however, provide for rental appartment projects where they can control rent costs and services with the expectation that votes will go along with those “subsidies”. The government was never meant, in the United States, to provide everything to everybody. But with the leftist leaning by the Marxist Democrats, that seems to be the angle of government today.

PaulE
1 month ago

This article pertains to the millennials that bought into the whole “free lunch”, society owes us a living no matter what and “we’re all victims” crowd. Every generation has had a few of these going back as far as you want to look, but thanks to our glorious public education system, the notion that one gets out of life what one puts into it is now a foreign concept.

Today a large segment of the millennial generation, and Gen Z right behind them, think working your way up the economic ladder is a four letter word. They confuse the value of a over-priced degree in art history, political science, liberal arts or any one of a dozen other generally worthless tracks of study with something that has an actual market value today. Being able to be constantly outraged by everyone and anything around you is NOT a marketable skill set. That leads to a job at Starbucks or McDonalds, which will make paying off that 5 or 6 figure college loan difficult at best.

Instead of focusing on “the fun or socially conscience courses” that have zero economic value, they would be better off focusing on subjects that would allow them to actually make the kind of salary that would lead to being able to afford a starter home and then work their way up from there. Yes, I know that entails actual hard work and commitment to a long-term goal, both things that interfere and cut into FB and Instagram time and are unpleasant to think about. Yet that is how you get economically ahead in this life.

Rik
1 month ago
Reply to  PaulE

Hi PaulE, your comments are ALWAYS on mark and you express them so that everyone can understand precisely! I always look forward to reading your comments and always agree with you! I’m afraid that my anger shows in my comments but I wasn’t taught to hold my anger if I thought it justified. Stay safe and keep educating us with your commentary. Thanks from all of us!

dave
1 month ago

This article misses on several issues. It frames the story as if the Millennials were saddled with their situation. If they have high student debt, it is because they voluntarily signed for student loans that they wanted. They may need to delay buying a home, while they pay down the debt. Their choice.
Nobody needs to pay 350k for a home. Both of my daughters are Millennials, and they both own homes. Every town in America has affordable homes. The dream of owning a home is easy to do with a little planning.

PaulE
1 month ago
Reply to  dave

Exactly correct. Everything is a choice in life. No one walks out of college or any other school with millions in the bank or a home waiting for them. That is all earned over one’s lifetime. Decisions matter. No one is owed anything simply for being. We all have opportunities in life and how we take advantage of them or squander them decides where we end up. That some millennials are upset that they haven’t done as well as other millennials is not society’s fault. It is their own poor choices that have led to the sub-optimal outcomes they complain about. I know many millennials that have made intelligent choices and they’re doing just fine. I also know many millennials with degrees in diversity studies, political science or some other economically worthless field of study, that are either waiting tables or working at Starbucks. Choices matter.

Max
1 month ago
Reply to  dave

Agree with you that affordable homes are out there. 4 of my 5 own their homes including 1 Millennial. My other Millennial got caught by the 20% down payment and now is looking for what he and wife can afford.

Larry W.
1 month ago
Reply to  dave

Yes, and many young folks want to start out bigtime with 2500 and larger sq ft homes. Plus the newest cars and mowers and boats, etc. Most of us started out small and worked our way up. I think young folks need to be satisfied with less but our culture pushes that you need the best of everything.

Oclaf
1 month ago

Let’s see how the so called “depend on Uncle Sam” works, it will work as well as this generation… nothing is given. Work hard and home ownership comes.

22
0
Would love your thoughts, please comment.x
()
x