Why aren't millennials buying houses? They can't afford it.

[eridani]

http://www.upworthy.com/why-arent-millennials-buying-houses-they-cant-afford-it



Friends, meet "Old Economy Steve."

On the Internet, Steve has become the judgmental, clueless baby-boomer embodiment of millennials' worst money-related frustrations.

Who is he, exactly? Well, Old Economy Steve knew how to pull himself up by his bootstraps. He graduated from college without student debt, immediately got a high-paying job, and plans to retire with a pension. He just can't understand why those lazy millennials are living with their parents and still unemployed. (Spoiler: Old Economy Steve is kind of a jerk.)

Not quite. A lot of folks would argue that it's because millennials have no money (check out that point of view in an article from the New York Times earlier this year). Here are a few

truth bombs that might explain what's going on:

1. Millennial wages aren't just frozen — they're actually shrinking.Many millennials were either in college or about to graduate when the recession hit hard. Lots of employees across the U.S. were let go — not exactly the best economic climate when you're looking for your first job.

[pnwmom]

1. Another good article. Thanks.

[SheilaT]

2. A few years ago I told my Millenial son that

when I was his age, a summer job earned enough money to pay for college tuition at my state University, and he found it impossible to believe. But it was true. Of course, you did need to be living at home and saving most of what you earned, but it was still true.

[Maeve]

16. And we worked part-time in college, which paid our rent and tuition

Yeah, we had to eat way too much spaghetti, but we could do it. Rent for a one bedroom, all utilities apartment off campus was $110 (mid '70's).

[hobbit709]

3. A lot of them today can't even afford rent.

[Alkene]

4. "judgmental, clueless baby-boomer..."

"I'd like to think most boomers are a little more compassionate toward us young folk than he is..."

Nice.

Divide and conquer.

[MisterP]

21. yeah, the joke is that the Old Economy Steve types were nurtured on the state's milk--

and then decided they wanted burgers, too

[ileus]

5. Must have been a early 90's college grad.

[joshcryer]

6. RIP Fanny Mae and Freddie Mac.

The Republicans successfully pulled it off.

The Democrats fell for it, mind you, they wanted to expand housing to low income people, but the mortgage crisis guaranteed it would fail (no thanks to Bill Clinton, of course).

It will be seen by political historians as one of the greatest misteps Democrats ever made. They wanted to expand ownership but failed to assure regulations, or rather deregulation, wouldn't backfire. They just weren't forward thinking enough. And yes, unlike others, I think it was a mistake of the party, not some intentional "oh we'll let lower income people get mortgages but then we'll purposefully let them default."

As Sanders says, rent is basically not allowing the poor to get anywhere.

[DhhD]

7. Some Democrats operate through the third way instead of social democracy.

There is the Progressive Democratic Party of FDR and Sanders, the New Democratic Party of Bill and Hillary Clinton and then there is the Tea Party Republican Party.

In my opinion, the New Democratic Party and the Old (1998-99) Republican Party are the same based on policy and Plans of Bill and Hillary Clinton.

Third way has an internet site. Please feel free to compare its Issues drop down, with social democracy. Another way is to compare the difference between the policies and plans of Sanders against Bill and Hillary Clinton. And compare Bill Clinton policies to the likeness of policies of the Republicans in Congress especially during Bill's second term. One example is privatization of Big Banks, otherwise known as the removal of Glass-Steagall.

[DhhD]

8. Here is another consolidation: Recently JEB said that he would rather vote for Hillary Clinton

than Donald tRump.

[joshcryer]

10. Not a single Democrat wanted this end.

Your argument is absolutely absurd. A huge chunk of Democrats, including the progressive caucus, went for low mortgage rates.

[hifiguy]

30. The Turd Way types

are basically 1980s-1990s republicans who can't bear the religulous and xenophobic stench of the buybull-bangers and racist asshats. The don't give a hoot bout issues like gay rights/civil rights/women's rights because don't affect the one and only thing they care about - the corporate bottom line that feathers their nests. It's easy to be for issues that are culturally symbolic - and undeniably important to the people affected - when you're still raking in that lovely corporate cash.

They are, however, eternally welded at the hip to Reagan/Thatcher economics, and no one should ever forget it. And there are no better examples than the Clintons.

The only thing that really matters to the Turd Way is this, and they want in:

[Taitertots]

9. The "mortgage crisis" is better described as "a run on the shadow banking system"

The "mortgage crisis" was a result of the 2008 collapse and not a cause of it.

The basic explaination is: the laws said I could promise you a billion dollars when I knew I'd never be able to pay you back. One morning you woke up and realized everyone was a billion dollars in debt and no one was going to pay them back.

[joshcryer]

11. Absolutely.

But credit default swaps endangered Fanny Mae and Freddie Mac, and in the end, we saw what happened. They got shut the fuck down.

This would not have happened if the Democrats saw the deregulation as a threat, they sat fat and happy, and didn't think Bush era policies would be a big deal. They were wrong. (Difference, they did not want it to happen, they fucked up.)

[Travis_0004]

29. RIP?

They made a bit over 2 billion in sales last quarter, and are doing quite well.

[joshcryer]

34. Freddie Mac just lost a half a trillion dollars.

http://www.wsj.com/articles/freddie-mac-swings-to-loss-1446558583

They are no longer able to give the low interest mortgages to low income people. As it stands now they're hemorrhaging just trying to keep the entire economy from collapsing again.

[Arugula Latte]

33. I don't think all of them were naive. The DLC/Clinton/Third Way types

are just Republican Lite. They are a bit more socially liberal but if Wall Street says "dance!" they do a jig.

[joshcryer]

35. Home ownership is like a Third Way plank.

http://www.thirdway.org/report/theres-no-place-like-home-housing-market-indicators

Even the dirty capitalists can see that home ownership and not renting benefits you more. It's basic math, renting is just giving landlords free money for very little effort.

[alarimer]

12. Not just millennials

I'm 47 and have never owned a house. I couldn't afford to even in Texas, where it's cheap and I had a (relatively) good job. Now that I am in Annapolis, no way I could afford to buy at my salary at the prices here. So I rent, for an outrageous sum. Now that I am no longer alone, though, and my partner makes way more than me, we will probably buy at some point. He has never owned a home either and he's 54.

[raccoon]

13. "Millennial wages aren't just frozen — they're actually shrinking..." True.

And so are everybody else's, except CEO's and their ilk.

[dixiegrrrrl]

14. Not just millennials.....

Retirees who got screwed over with their pension losses thanks to ZERO interest rates since 2009, or did not have enough saved at all.
Plus the economy has dented credit scores.

"economy Steve" up page could, and did, get a good job in 1964, have a wife and kids, buy a home, and have affordable medical care
(not insurance, but health CARE) and then retire with a decent pension. all on his paycheck.
This was before health insurance took over the health care system and inflated costs thru the roof.

[jeff47]

18. Ah pensions. Good thing we got rid of those. (nt)

( )

[SheilaT]

20. Or they got screwed out of their pension

when the company they'd worked for declared bankruptcy, turned the pension obligation over to the PBGC, and everyone's pension was cut by 2/3.

That happened to me, although in my case I'd worked for that company for ten years from 1969-1979, and I never included the eventual pension in my retirement income calculations. Good thing, too.

I do find that Medicare and an Advantage Plan, which is entirely paid for by my Part B fee, is remarkably cheap. I'm paying less out of pocket than I was when I worked and had a very good health care plan through my employer.

[dixiegrrrrl]

22. Medicare here too, and "cheap" depending on how you look at it.

We just got a bill for Mr. Dixie's lumbar MRI ( he broke a lumbar disk).
Hospital charged 1500.00 for that little picture taking
the max allowable charge by Medicare is 1400

we ended up owing 98.00.

Mr. Dixie is plenty happy, but I had to point out that he is paying 140.00 per month in deductibles, which, if put into a medical emergency account each year, would cover the procedure.
Which is what we did before he went on Medicare.

Still, compared to most insurance, Medicare is great.

[SheilaT]

23. Maybe the hospital could

be persuaded to accept the Medicare amount as full payment.

I'm under the impression that there are some things that doctors or hospitals must take Medicare amount as full payment, but perhaps I'm wrong.

[dixiegrrrrl]

24. The test was on an outpatient basis

and outpatient services come with a Medicare mandated 20% co-pay per service.

It was interesting when he was IN the hospital for 3 days with a collapsed lung.
Every x-ray they took in his room was billed as an outpatient service.

I am not quibbling over a 98.00 bill for the MRI. I am so grateful we have Medicare and wish everyone could be on it.

[SheilaT]

32. I didn't know that.

You can tell I am never in a hospital, other than to visit someone.

And yes, we really do need to make Medicare for all.

[HughBeaumont]

15. I don't think The Ownership Society, Inc. even thought about this ahead of time.

Or maybe they DID and they just didn't give a shit. Because they got theirs.

That second chart is telling. Median household income has not changed since 1990 and has barely moved since 1975.

[smirkymonkey]

17. +1000

It's not just millennials, a lot of middle aged and older people are getting squeezed as well. This economy sucks for everyone but the very wealthy.

[Scootaloo]

27. "But me too!"

Yeah, sure, plenty of middle-aged people are "squeezed." But millenials are getting crushed. Y'see, sure it's bad to take a paycut, or lose benefits. it sucks! But millineals aren't even getting work in the first place. They don't have their own homes, and rent is exploding.

[abelenkpe]

31. Rent is crazy!

In 2000 our place and places like it went for 1500 a month. Today they want between 4000-11,000 for the same size place in the same neighborhood. I do not know who can afford these rents.

[bigwillq]

19. A large chuck of the country can't afford anything

Times are still so bad for so many people.

[mnhtnbb]

25. The only reason my oldest millenial son owns a 2 BR townhouse

was that he didn't go to college (didn't want to) and started working
in computers after HS. We had saved money to help him with college
and after our youngest went to college (on a scholarship that covered
most of his in-state tuition so we only needed to help with his books and living expenses)
we offered the same amount of what we spent on the youngest for his college
to our oldest for a down payment. That, plus money his grandmother had left
him, was enough to buy the loan he needed down to a level where he could
qualify--thanks to low interest rates.

The youngest millenial son is now in grad school--with excellent financial aid--
but we're still helping him with living expenses. He is spending the money his
grandmother left him on grad school. So...when he's finally done, he won't
have any money for a down payment on anything...but he also won't have
any student loans since that's why we're helping him now. I just hope he
can find a job when he's finished because by that time we're going to be fully
retired and not have any extra $$ to help him!

[Cali_Democrat]

26. LOL....I just did a google image search for "Old Economy Steve"

Too funny.

[Snobblevitch]

28. I know a young man who graduated from college in 2012.

He got a good job (he was hired before he graduated) and a year ago he bought his own house. He's an electrical engineer and is single, probably not for long, my nephew tells me he has women after him all the time.

[yewberry]

36. This article appears to ignore a generation.

"Old Economy Steve" as a baby-boomer pretends that Gen X doesn't exist. Oh, yes, sure, that makes sense. People born in the late 40s lead directly to people born in the 90s.

Gen Xer here-- buying a home? Not in my lifetime.