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In my area new apartment complexes are going up and old ones are being remodeled. Practically all of them are being made into luxury units where the rents are definitely more than what a mortgaged house goes for here. Since where I live is basically a long distance commute hub the rental companies are going for people who probably don't have the time and energy to maintain a house because work and long commutes.
In my area new apartment complexes are going up and old ones are being remodeled. Practically all of them are being made into luxury units where the rents are definitely more than what a mortgaged house goes for here. Since where I live is basically a long distance commute hub the rental companies are going for people who probably don't have the time and energy to maintain a house because work and long commutes.
Definitely a factor - if you want to live downtown or urban areas in some cities, there aren't really that many cheap houses in more desirable areas of these urban areas. The houses younger folks can afford are more likely in the suburbs where they don't want to live (yet)
I make about $28k each year as a grad student and a typical house around here is $300k or so. Let's see, I could:
A) Rob a bank
B) Quit school and move to Detroit and buy a house for $20k in cash from my savings, but be without a job
C) Sell illegal drugs for a long period of time to come up with the money
D) Buy a house for $30k 2 hours away and commute, but have no time left for school and after 3 years no car either because I would have burned through all the miles, and no job either because I failed school
E) Get a sugar mommy who makes 4x my salary, and then buy the house
F) Similar to D, except do all my work, get another job and commute, but then get so little sleep that I am going to die in a car accident on my two hour commute while getting 2 hours of sleep each night
OR
G) continue renting a room, for now.
For me, the choice is crystal clear.
Yes it's the life of a broke grad student, many of us know that all too well. But it will be temporary and eventually you may be able to buy that 300k house.
I don't know if it has been mentioned in this thread, but the average age parents have their first child has been rising for decades. There could be a clear correlation between this and buying a house, as many people don't feel the need to purchase a house until they have a family. In 1970 the average age for a first time mother was 21; in 2014 it was 26 (CDC data). This is even more pronounced in urban areas.
Definitely a factor - if you want to live downtown or urban areas in some cities, there aren't really that many cheap houses in more desirable areas of these urban areas. The houses younger folks can afford are more likely in the suburbs where they don't want to live (yet)
And they might not move to the suburbs like prior generations did. The cities are gentrifying and are becoming fine places to go to school and raise a family. There seems to be a stigma that urban areas are a terrible place to raise a family but that isn't true at all.
Yes it's true rates are quite a bit less then they were way back when.
The problem is the DTI ratio has gotten stretched as home affordability is based off payments. Interest rates going down means lower payments means higher home prices relative to income.
You're really just robbing from peter to pay paul here.
In Sweden things got so bad they had 140 year mortgages. Japan had 100 year mortgages before their housing collapse (that they haven't recovered from 35 years ago...).
Nope. Don't conflate those with what is happening here. The situation isn't the same in Sweden (and likely, Japan from what I remember). Switzerland has something similar too from conversations with friends who have relatives there. There you can offset other taxes by writing off certain types of repairs, etc. They often have second mortgages with similar terms/length to ours in the USA. The tax write offs of the interest paid on the other (longer term) one is a benefit. For this reason they don't usually pay off the longer one (spare someone cheating a typical lifespan). They also pay some astronomical income taxes though, especially Sweden.
Renters generally aren't getting new kitchens and baths, so they don't get the satisfaction and enjoyment of such things. There has to be monetary value to that.
Exactly! We spent $250,000 redoing our home last year. We love the results, the do over makes the house look new and more upscale. Yes there is a monetary amount to enjoying where you spend the majority of your life. We have the unobstructed view, here forever so no worries about not getting our money back.
Lots of things in life you don't get your money back on. Do you go on vacation and think your going to get your money back? Aren't living if one is obsessed with money.
Enjoy life, you only get one. And we are NOT obsessed with leaving money to successful heirs.
Never mind in my hood, homes that have been upgraded are going for $200,000 + more than their equal counterparts. And are sold within 1 week. Where as 'old interiors' take a month to sell.
Not disagreeing, as many people raise children in urban environments. But you'd be shocked how quickly your views on that could change. Just warning you
For me it wouldn't be a big deal, because I actually grew up in an urban environment. Many millenials that love the urban life will eventually settle in the 'burbs because that's where their roots lie. For millenials that grew up in the 'hood, the white picket fence dream is an option, but not the only option.
In my area new apartment complexes are going up and old ones are being remodeled. Practically all of them are being made into luxury units where the rents are definitely more than what a mortgaged house goes for here. Since where I live is basically a long distance commute hub the rental companies are going for people who probably don't have the time and energy to maintain a house because work and long commutes.
My city had its first new apartment complex in thirty years open recently. The local paper did a feature on it - I think 1BRs start around $800. Local residents were complaining on Facebook that's it not needed and will fold in a few years and become low income housing.
The old complexes from the 60s-80s are charging $679-$699 for a 1BR. Even with a low downpayment mortgage, PMI, PITI, etc., you're still probably out considerably less on a cheap 2 BR house than a 2 BR apartment.
The problem is the definition of millennials is far different that the perceived demographic. By definition a millennial is anyone born between 1982 - 2002. My definition would be anyone born after 1995. People born in the 80's and early 90's are culturally far different from those born in the internet era. The value, decisions, interests, and choices vary vastly from those that are true millennials.
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