So how will the next generation handle such expensive housing?

[entremet]

Anyone with a brain has noticed the traditional markers of adulthood have become harder to obtain compared to other generations.

Personally, I think these traditional markers are BS, in most cases. If you want marriage and family, I'm all for it, but that's not the only life template.

However, it's clear that attaining these, along with others, such as moving out and fending for yourself is empirically harder. Wages are lower, real estate, including rent, is way more expensive, especially compared to percentage of income.

I personally know many folks that lived at home post college to save up to buy a house. A good strategy, IMO. However, at least in American culture, this can be shunned (see Shaq's statement on his sons).

Moreover, I also know people that stuck renting because they moved out, rented, never had a chance to build out a downpayment, and are stuck renting without any end in sight financially. They "grew up" and moved out early, but strategically, they made a mistake. I'm not talking abusive situations. I'm taking about situation where you do get along with your parents. Immigrants commonly have multigenerational housing because they have less generational wealth and some come from more collectivist cultures.

But I do wonder with people with young children today. It seems the US housing crisis or North American housing crises (check out Toronto) is not abating. If it was hard as heck for Millennials to buy their first homes, most of time requiring two incomes, what about Gen Z and below?

The biggest trends I can see:

• Moving to low cost of areas. Something accelerated by the pandemic
• Retiring outside of the US. Pensions are dead. Many don't fund IRAs/401k, so many are going retire broke sadly.
• The rise of multigenerational housing. This is currently happening. You see this very prominently in Hawaii, for example, a HCOL state.

It seems North America is failing hard here and no solution in sight. Inequality will only get worse it seems.

 

[HStallion]

Yurts in the middle of nowhere

 

[Wrexis]

They "grew up" and moved out early, but strategically, they made a mistake.

Click to shrink...

This was my mistake. I moved out at 22 - 2 weeks after getting a job - even though I had a great relationship with my parents.
If I had stayed 6-12 months even on a grad's salary I would have saved a ton.

I ended up moving back for a year in my early 30s instead - a much more humiliating experience.

 

[Transistor]

Retiring outside of the US. Pensions are dead. Many don't fund IRAs/401k, so many are going retire broke sadly.

Click to shrink...

The problem with this is the costs associated with leaving the US. I don't see this one being an option for most people.

 

[chefbags]

I can see myself just never buying a house. I'd rather just pay rent.

 

[maigret]

Next generation? I'm in my 30s and my hopes of affording anything in my current city (Austin) are basically non-existent.

 

[Dyle]

Here in the US at least things will collapse long before the next generation comes into the picture so it's pointless to try predicting anything. It's not really possible to predict such things when there's a giant black hole of uncertainty sitting in January 2025.

 

[OrangeNova]

Here in the US at least things will collapse long before the next generation comes into the picture so it's pointless to try predicting anything. It's not really possible to predict such things when there's a giant black hole of uncertainty sitting in January 2025.

Click to shrink...

That's what we said in Canada years ago, but it's only gotten worse.

 

[entremet]

I can see myself just never buying a house. I'd rather just pay rent.

Click to shrink...

Nothing wrong with renting. However, it is lifetime fixed expense. It tends to rise over time. So you have to make sure you you have funds to pay that ever increasing fixed expense into old age, when income decreases.

With a home payment, there's an end state. You still need pay property taxes and repairs. But that could be cheaper than rent once paid off.

 

[PeskyToaster]

This was my mistake. I moved out at 22 - 2 weeks after getting a job - even though I had a great relationship with my parents.
If I had stayed 6-12 months even on a grad's salary I would have saved a ton.

I ended up moving back for a year in my early 30s instead - a much more humiliating experience.

Click to shrink...

Yeah I'm still with my parents but it (plus getting a job right out of college) allowed me to save up a giant chunk of change for a down payment and early on I put all my money towards paying off student loans so it only took me about a year or two after graduating to fully pay them off.

 

[sfedai0]

Van life.

 

[entremet]

Next generation? I'm in my 30s and my hopes of affording anything in my current city (Austin) are basically non-existent.

Click to shrink...

I agree!

But if it hard for you, imagine the next generation? This is not a great way to build a society, but it seems the powers that be don't give a shit only care about the Dow Jones. This is the problem with capitalism run amok. It can't think generationally.

 

[Lobster Roll]

Yurts in the middle of nowhere

Click to shrink...

You joke, but my friends and I a few years back kicked around the idea of setting up a small community to live on collectively like a cult, without the cult aspects. Buy a plot of land, have enough yurts / cabins for us and our SOs, and one small community center in the middle that has entertainment, a kitchen, showers, etc.

 

[Deleted member 4212]

In many parts of the world it's normal to live with your parents until you get married, even into your 30s and 40s.

 

[TitlePending]

This was my mistake. I moved out at 22 - 2 weeks after getting a job - even though I had a great relationship with my parents.
If I had stayed 6-12 months even on a grad's salary I would have saved a ton.

I ended up moving back for a year in my early 30s instead - a much more humiliating experience.

Click to shrink...

I'm a strong advocate for in-state colleges (if they want higher education) and staying at home for a few years to build some wealth. That was my path and it served me well.

 

[krazen]

I wonder; houses are only worth as much as people are willing to pay for it. It's going to be interesting when the boomers, older Gen X have to offload their houses as they go into retirement and expect Millenials, Gen Z to buy up that property and give them their 'worth'.

 

[klastical]

Gentrification is what will happen. White people will move into "the bad parts" of town in mass and force out minorities and the poor.

 

[entremet]

I'm a strong advocate for in-state colleges (if they want higher education) and staying at home for a few years to build some wealth. That was my path and it served me well.

Click to shrink...

Heck, not just to build wealth. But pay off loans! Even state schools are getting pricey.

Ohio State tution is 11,518 USD. After 4 years that's close to 50k. If you parents didn't save for up, you will on the hook for some debt. Unless you got a full ride.

 

[Wrexis]

I wonder; houses are only worth as much as people are willing to pay for it.

Click to shrink...

People are willing to pay a lot, see the current market.

 

[TitlePending]

Heck, not just to build wealth. But pay off loans! Even state schools are getting pricey.

Click to shrink...

100%

"Building wealth" to me also mean "paying off loans."

 

[subpar spatula]

Depends on how legislature grows to meet this issue. Mixed zoning will make things more affordable and abundant if cities allow it.

There is also that more and more financial and post secondary literacy is being talked about. I assume more people are going to universities for things that will help them in a career. Anecdotally, my sister in law and her boyfriend are doing fine. Lived at home through university and their first jobs pay pretty well for their age (25 each and both make over 80k while in health and tech). They can afford to rent while saving for a downpayment. Our expectations of ourselves, what we want, and how to get them need to be more thought out. Long gone are the days of just getting a job at the local whatever and buying a house on that wage.

 

[Deleted member 2802]

Anyone with a brain has noticed the traditional markers of adulthood have become harder to obtain compared to other generations.

Personally, I think these traditional markers are BS, in most cases. If you want marriage and family, I'm all for it, but that's not the only life template.

However, it's clear that attaining these, along with others, such as moving out and fending for yourself is empirically harder. Wages are lower, real estate, including rent, is way more expensive, especially compared to percentage of income.

I personally know many folks that lived at home post college to save up to buy a house. A good strategy, IMO. However, at least in American culture, this can be shunned (see Shaq's statement on his sons).

Moreover, I also know people that stuck renting because they moved out, rented, never had a chance to build out a downpayment, and are stuck renting without any end in sight financially. They "grew up" and moved out early, but strategically, they made a mistake. I'm not talking abusive situations. I'm taking about situation where you do get along with your parents. Immigrants commonly have multigenerational housing because they have less generational wealth and some come from more collectivist cultures.

But I do wonder with people with young children today. It seems the US housing crisis or North American housing crises (check out Toronto) is not abating. If it was hard as heck for Millennials to buy their first homes, most of time requiring two incomes, what about Gen Z and below?

The biggest trends I can see:

• Moving to low cost of areas. Something accelerated by the pandemic
• Retiring outside of the US. Pensions are dead. Many don't fund IRAs/401k, so many are going retire broke sadly.
• The rise of multigenerational housing. This is currently happening. You see this very prominently in Hawaii, for example, a HCOL state.

It seems North America is failing hard here and no solution in sight. Inequality will only get worse it seems.

Click to shrink...

- Corporations will own all cities or major city block/apartments
- Instead of working jobs for companies like salary and money - you work for housing/food credits for the housing corporations
- Police will not exist, it will all just be corporation security

 

[FliX]

The rise of multigenerational housing. This is currently happening. You see this very prominently in Hawaii, for example, a HCOL state.

Click to shrink...

While I don't do it myself I do feel like multigenerational housing sounds very appealing and is something we as a species have always done till relatively recently when it was for some reason demonized.

 

[bmdubya]

I wonder; houses are only worth as much as people are willing to pay for it. It's going to be interesting when the boomers, older Gen X have to offload their houses as they go into retirement and expect Millenials, Gen Z to buy up that property and give them their 'worth'.

Click to shrink...

It will just be investment firms buying up the property and then boomers will complain because "nobody wants to buy anymore, they just want to rent," and they'll also complain how their old neighborhood went to shit because it's only renters.

 

[L Thammy]

While I don't do it myself I do feel like multigenerational housing sounds very appealing and is something we as a species have always done till relatively recently when it was for some reason demonized.

Click to shrink...

Specifically, the nuclear family structure was something that popped up in England I think just a couple of hundred years ago, then gelled well with the industrial revolution and people moving around for jobs, and so started to spread from there.

 

[entremet]

While I don't do it myself I do feel like multigenerational housing sounds very appealing and is something we as a species have always done till relatively recently when it was for some reason demonized.

Click to shrink...

It was the norm in America as well.

The current single family home primacy was created when the burbs were created and financed by the government post WW2. Leavittown in Long Island being the first.

That created the housing boom and also led to the rise to automobile to support it. It also created the mortgage financing industry. It also was very racist and black people were forbidden to get loans--another US government special.

Housing then became a driver of middle class wealth, basically creating it.

Before that intergenerational housing was a norm in the US. Nursing homes are relatively new.

 

[Kill3r7]

People will find a way. Home ownership might drop to below 60% but younger generations will eventually inherit their parents' home.

 

[Planx]

They're gonna vote to destroy housing as an investment. The people who caused the situation will be long dead/retired and current Millenials/Gen Xers who will have not really done anything to correct or contribute to the problem, and had to buy in at the hugely inflated prices previous generations caused, will have their equity laid on the altar so that the mistake can be corrected, and we're gonna resent the hell out of them for it.

 

[entremet]

People will find a way. Home ownership might drop to below 60% but younger generations will eventually inherit their parents' home.

Click to shrink...

What about families that don't own homes?

What about if you have multiple kids. There's only one home to inherit.

Unless we fundamentally change how we do housing in North America, I predict it will quickly become a place with a very small middle class.

 

[Thorn]

 

[Gwarm]

Hopefully the growth of remote work will allow people to move away from larger cities and help populate/repopulate smaller metropolitan areas. Even small towns can be quite livable if developed properly. I would happily live in a small town if there was infrastructure for walking, biking, and a downtown area instead of just 4 lane roads and Walmart. I'm probably dreaming here.

 

[Soapbox Killer]

Tiny House communities.

I have 1 house in .25 acres of land. I could fit 4 families of 4 on the same plot of land and still have yard space for the exact amount of money I paid for this. Which leads me to say that my house is almost worth double its value vs when I purchased in 2019 which is insane.

 

[Jakten]

In many parts of the world it's normal to live with your parents until you get married, even into your 30s and 40s.

Click to shrink...

Problem with that is it's assumed to not be normal for parents to allow that here so you just deal with endless abuse from parents and their friends, and worry about the destruction of everything you own constantly and you never get a day of peace ever again. Then when you finally move you get to hear everyday about how you ruined the best years of your parents lives. Plus since they took all your shit to the dump at some point to try and force you out you have nothing to put in your new place when you finally get out.

 

[saturnineCarrier]

People will find a way. Home ownership might drop to below 60% but younger generations will eventually inherit their parents' home.

Click to shrink...

How does that work with multiple siblings ?

 

[Zulith]

I'm completely cynical on the issue after being on this planet long enough to see how lawmakers fail to address important issues, leaving people to fend for themselves at every turn. You'd better get comfortable living with multiple people sharing the expense for the rest of your life unless you are highly paid. Two generations ago anyone could up and leave their current living situation and move to any city in the lower 48 with little to no resources or job skills and find ways to make it work out. Imagine trying that today.

 

[entremet]

The problem with this is the costs associated with leaving the US. I don't see this one being an option for most people.

Click to shrink...

I'm not talking about HCOL countries like Western Europe. I'm taking areas in LATAM for example. It's already happening. People retiring in Mexico, Costa Rica, Colombia.

But yeah, if you're completely broke, you can't do that. But as a way to stretch retirement funds, it's better than staying in the US.

 

[Bjomesphat]

Hopefully I'll be in a position to help my kids. Probably with inheritance from mine and my wife's parents.

 

[Kill3r7]

What about families that don't own homes?

What about if you have multiple kids. There's only one home to inherit.

Unless we fundamentally change how we do housing in North America, I predict it will quickly become a place with a very small middle class.

Click to shrink...

Silent generation and boomers have close to 78% ownership rates. Gen X is the high 60s. Millennials are in the low 50s.

In 2020 millennials made up 37% of home buyers followed by boomers at 32% and Gen X at 24%.

To fundamentally change homeownership model in the US you would have to change the financial dynamics of ownership.

 

[Dyle]

That's what we said in Canada years ago, but it's only gotten worse.

Click to shrink...

I'm talking about much bigger things than just housing. Canada has always been a stable country with no plausible scenario where the services and law its government provides might be in jeopardy and while the US used to be like that, it's become clear that such political and economic stability is no longer certain. The assumption inherent in this thread's premise is that business will continue largely as usual and I don't think that is likely to be true which introduces so many questions with unknowable answers that it's impossible to predict how things will shake out with any certainty.

 

[Liquidsnake]

And how will they pay the taxes on it?

 

[Tobor]

Yurts in the middle of nowhere

Click to shrink...

Large swaths of the "middle of nowhere" will become unliveable in the next two decades. Should be fun.

 

[entremet]

Silent generation and boomers have close to 78% ownership rates. Gen X is the high 60s. Millennials are in the low 50s.

In 2020 millennials made up 37% of home buyers followed by boomers at 32% and Gen X at 24%.

To fundamentally change homeownership model in the US you would have to change the financial dynamics of ownership.

Click to shrink...

Do you think all those homes will go children? Not the free market, real estate investors looking to get tenants, investment groups, REITs, and the like?

The big factor you're also missing is how investment groups and companies are buying property post 2008.



This is a very canary in the coal mine situation and if we don't act, it's going to get really bad. Especially with a middle class culture that has been programmed to buy housing so strongly as the US.

Housing also makes a huge part of the US economy as well. This is a massively ignored situation.

 

[crimsonECHIDNA]

Just playing the long game for the housing market to crash again.

 

[Tttssd1972]

Being 29. Stuck living at my Mom's house. Make a little over $51k a year and can't afford a decent 1 bedroom apartment in South East PA. Have $14.4K in the bank with an additional $11k I could pull from 401k… not even close to being able to afford a down payment on a decent home.

It. Sucks.

 

[Ionic]

People will find a way. Home ownership might drop to below 60% but younger generations will eventually inherit their parents' home.

Click to shrink...

If the answer to the housing crisis is generational wealth then this country is fucked.

 

[entremet]

If the answer to the housing crisis is generational wealth then this country is fucked.

Click to shrink...

Yep because it also hurts class mobility. Everyone else "on the comeup" will have a harder time finding affordable housing.

 

[Kill3r7]

How does that work with multiple siblings ?

Click to shrink...

You sell the house and hopefully use the proceeds for a down payment.

Do you think all those homes will go children? Not the free market, investment groups, REITs, and the like?

The big factor you're also missing is how investment groups and companies are buying property post 2008.



This is a very canary and coal mine situation and if we don't act, it's going to get really bad. Especially with a middle class culture that has been programmed to buy housing so strongly as the US.

Click to shrink...

Sure but that money from the sale of the house doesn't disappear. Once the boomer generation starts dying off there will be a glut of available properties on the market or their kids will inherit them.

Edit: I think a bigger hurdle with boomers is their desire to live in these 55 and over communities which restrict your opportunity to sell or occupy.

 

[entremet]

You sell the house and hopefully use the proceeds for a down payment.



Sure but that money from the sale of the house doesn't disappear. Once the boomer generation starts dying off there will be a glut of available properties on the market or their kids will inherit them.

Click to shrink...

I think you're using metrics based on 1990s trends. Corporate investors, REITS, real estate investors, Airbnb, have all changed the prorperty game.

And do you think ever family will do this? I've seen estate squabbles. Not every family is responsible. Not every heir will use that money for a downpayment. Some may already own a home. And if they buy another home, for an investment property for example, that house is not on that market for another person to purchase.

 

[Qikz]

Nothing wrong with renting. However, it is lifetime fixed expense. It tends to rise over time. So you have to make sure you you have funds to pay that ever increasing fixed expense into old age, when income decreases.

With a home payment, there's an end state. You still need pay property taxes and repairs. But that could be cheaper than rent once paid off.

Click to shrink...

It's also a fixed payment that you never get anything back on. You're literally throwing money away.

At least if you can get a mortgage when you sell your place you get the money back.

 

[entremet]

It's also a fixed payment that you never get anything back on. You're literally throwing money away.

At least if you can get a mortgage when you sell your place you get the money back.

Click to shrink...

That's fine. We're all gonna die lol. I think the consideration with renting is can you afford to do it for life. That's an important calculus to take.

Housing is great as a forced saving account that appreciate nicely and also provides a utility--shelter. Along with psychic benefits--space, schooling, etc.