Few milestones in life mean as much to the American Dream as owning a home. And millennials have encountered the kind of trouble totally befitting their generation, which largely graduated into the teeth of the disastrous post-2008 job market. Just as they entered peak homebuying and household formation age, housing affordability is at 40-year lows, and mortgage rates are near 40-year highs.
The anxiety this generation feels about the prospect of never owning their own home affects their entire perception of their finances and the economy, says Moody’s chief economist Mark Zandi.
“If they feel like they’re locked out of owning a home it colors their perceptions about everything else going on in their financial lives,” Zandi says.
Millennials have long been dogged by a brutal housing market. They faced not one, but two, cataclysmic economic events—the Great Financial Crisis in 2008 and the pandemic in 2020. Both of which left them reeling financially and struggling to afford a home. The Great Recession decimated the real estate market as the economy nearly collapsed under the weight of tenuous mortgage backed securities. While the pandemic brought with it a remote work boom that caused millions of citydwellers to flee to the suburbs, sending housing prices soaring.
It’s a shame that FHAs are gatekept with PMI, even for those with great credit. I’m on a VA Loan which is probably responsible for the vast majority of mortgages in my age group ('96). With good credit on FHA you only need 3.5% down minimum but will need to carry PMI either way which has been historically expensive and has never gotten cheaper. Tack on the considerable rise in both interest rates and prices at the same time the past year or so, it all looks pretty bleak. I am just so fortunate we locked in at 2.35% in an area which hasn’t ever seen decline in home values other than a blip in '08, but it took military service to even qualify for. This doesn’t even bring up my degree being free.
It’s just wild how large the gap is growing, my younger brother ('02) works as a mechanic and as a manager at a furniture store, his girlfriend is a team lead at the furniture store, they really can’t afford to just rent on their own and this is rural Delmarva. Houses that were built new not even 10 years ago for $120k are now $280k+. My thing is full-time workers shouldn’t have to worry about the bare necessities but even mid-level jobs only paying $18/hr is just gross. I’m the only college grad in my family and work in big tech now and it’s just silly how much of a game upward mobility, heck, just stability, is getting.
Heh, my wife makes more working for big tech one day per week from home, than i do working full time for service work at a hospital. It’s a shitshow.
Socialism really worked for you.
Service guarantees citizenship. Would you like to know more?
How much are people paying for PMI? Mine is $38/month. I put roughly ten percent down so maybe it’s cheaper?