A lot of people are going to jump on this comment and say something along the lines of "change your lifestyle and you can afford one".
That's not the problem here.
House prices (in my location) have risen from 4x the average annual salary to 10x. Like the above commentor, I'm better off than most and I can just barely manage to scrimp and save enough to enter the housing market, by buying the parents home at a slight discount. There's not much more I could sacrifice.
I have a huge advantage on the average Joe for a number of reasons and am still struggling. Sure, it's possible for me, but it's not possible for them. And that's the problem.
People are very opposed to the idea that they can’t buy a house where they grew up, or in an area they feel is comparable. Which I suppose I can understand.
But to your point — things change, you aren’t rich enough, it sucks, get over it.
It looks like the flow of your idea is to examine a "typical" family, demonstrate that they can't easily afford a home, and rely on most real-world distributions being nice to conclude that many people can't easily afford homes.
Ignoring the conclusion for the moment, that kind of an argument shouldn't just take into account the median savings balance; the median family has one or more individuals age 35+ and $40k+ in home equity -- they can afford a home as evidenced by the fact that they already bought one, and that additional factor to net worth is sufficient to allow them to easily switch homes if desired.
The conclusion itself definitely seems true in many cases, but if families are willing to move and switch careers I'm not sure it's that big of a deal. In every city over 30k people I've visited I've been able to clear $25+/hr just delivering doordash, and many of those have nice 2-3 bedroom homes under $150k. I nearly bought a $180k triplex after a couple years as a lowly pizza driver, and the only reason I didn't become a landlord then and there is because my girlfriend at the time convinced me college would be a better investment (I don't know that it necessarily was, but looking at my current career trajectory I don't have any evidence to the contrary).
Home ownership still wouldn't be totally trivial per se (maybe taking up to 3-5yrs), but in the vast majority of circumstances I'd wager without further proof that the things holding people back from home ownership are stronger alternative preferences (particular careers, cities, ...), and a lack of knowledge about what opportunities are available.
It's not impossible. If you live off your income then you've already been excluded from purchasing a house. This is what happens when wealth inequality becomes very extreme.
What you're saying surely has elements of truth, in average the struggle is real and it's hard.
But it's also a matter of perspective. Here's a few additional perspectives, none of them the whole answer. But possibly provide insights and even hope for those who are most motivated.
Creating a house is a huge achievement, if you had to build it, and it's components, yourself, you would spend decades building a modern style house. It's unrealistic to expect that everyone can get this easily and early in life. Our mortgage system allows people to own earlier while paying it off to make that possible, but otherwise this is something that only a skilled person after decades of work would achieve.
Minimum wage isn't expected to be the maximum income achievement for someone who works hard, the idea is to find a niche where you can make more than minimum wage. This takes time of hard work, but it's patently still very possible in Australia, and much harder in many other countries overseas.
People who bought houses in the past had it easier in some ways, but lived a much much more basic standard of life. If you talk to average (ie not wealthy) people who bought houses from 50 to 20 years ago, it was incredibly hard for them, and involved sacrifice of pretty much everything to the mortgage for a decade of their life, while working hard and supporting a family. No overseas holidays, computers phones and entertainment, paying for kids sports programs, home delivery of meals etc etc. The standard of entitlement has raised incredibly decade on decade - in the past it was Expected to sacrifice to afford a home.
Some people still, despite the challenges were buying homes on minimum wage jobs in the last decade, before the current waves of price rises, and some probably are still buying now. But those people who did structured their life in a way to reduce every expense and save then buy modest places, away from conveniences and lifestyle areas. Similar sorts of sacrifices that people of the past would have done, just they are living in an era of inflated lifestyle expectations so they socially making more sacrifices even if the actual physical sacrifices are less in that they e.g. still have a phone and more entertainment than the past.
I second this. Not having parents who spend their life accumulating wealth (read: bought a house which increased an order of magnitude in value over the last 20 years) makes it very hard to even afford a house for your own use, let alone buying one to rent out. With the wealth gap growing ever larger, it becomes increasingly hard to 'break out' of the (lower) middle class.
Right, and for good reason. It used to be the case that houses were affordable on a basic salary. That hasn’t been the case for a long time for a lot of people. (And to be fair, still isn’t in urban areas.)
The combo of slightly higher wages, more young people moving out, and low interest rates does mean more people have the opportunity. And that’s not a bad thing. If you cancel any of those factors, you’re blocking access to people who would love to own a home.
I think the factors that should change are supply and investors. It’s not like we live in an era where housing is cheap and bountiful. Clearly it’s severely constrained. The other part is investment. With low interest rates, it’s easy to justify a house as an investment vehicle.
Legislatively, it needs to be easy to build and hard to buy more than one property.
The debate annoys me. Housing has become more expensive and food, including eating out, has become cheaper. Yes, a totally financially responsible person should be minimising eating out in order to save. I do this. I'm on close to average full time wage. Even though I'm saving very carefully, it's still going to take me a lot longer before I own my own home than an average wage earner from the previous generation.
Yes, stop buying avocado every day, if you do. But also, Australian housing needs to come down in cost if you don't want people like me to be renting forever.
It's not the end of the world if I rent forever, but it is a bit sad. Everyone else got to own a home, why should that be so much harder for me?
Not to mention that it takes considerably greater qualifications now to earn an average wage compared to the past. So I'm starting later and with student debt.
I don't want to completely absolve myself of agency. I plan on doing the best I can with my situation and I will probably own a home one day. But is it unfair? Yes. There really is no argument.
Us modern folk have it easier in many ways, but in terms of home ownership we're not hallucinating that it's harder. Wages aren't going up as fast as house prices, and that's really what it comes down to.
I think people are overthinking the problem when it is quite simple: Housing prices have put owning your own home out of reach for the vast majority of young people.
I worked hard to pay my mortgage, feeling happy that I was on my way to owning a house. With a house, I started a family and life was good. I didn't mind putting up with corporate nonsense.
Without a house, I most certainly would not done this. I probably would have kicked around doing odd jobs to save for going backpacking in Thailand. Why the hell would I want to be part of a system that doesn't reward me? There's no reason to buy in (or sell out)
10 years ago one person buys a house for £100K
10 years ago one person buys a house for £250K
They both buy their houses in accordance with the level of income they earn.
The person who bought the £100K home could not afford the £250K home.
10 years later house prices have increased by 100%.
The person who's home is now worth £200K still cannot afford the house which is now worth £500K even though, on paper he is £100k richer.
The person who owns the £200K home can only buy the expensive £500K house if he increases his mortgage which involves increasing their earning capacity.
Back in 1982 I bought my first home for £29,500 (cheap as chips) with a 25 year mortgage. The mortgage adviser said that over the 25 year period I would pay back £160,000 in interest. 42 years later that same house is on the market for £360,000.
On paper I am considerably richer today than I was 42 years ago. This is meaningless. I have no access to that money. I cannot just sell my home and have loads of cash in my bank account. I would be homeless. I cannot buy a cheaper home because my home was cheap when I bought it and is still cheap.
As a 25 year old I loved my new home. I looked around at all the more expensive homes and thought that one day I would buy one of them. Naively misunderstanding that as my home went up in value so would all the other homes around me even the more expensive ones.
After working all my life I finally retire. My dream is to sell my home and move to the seaside and enjoy my final years and die in peaceful surroundings. Alas, my home will not sell for enough money to buy a home near the seaside. I remain forever stuck in the home I bought 42 year ago.
It is increasingly more difficult for young poeple to buy their own homes. Unless you are earning £120,000 per annum you cannot afford the house that I bought for £29,000 when I was 25 years old.
Who really benfits from home ownership?
Who really benfits from ever increasing house prices?
Who really controls house pricing?
My parents had paid off their mortgage when they were my age. My father was self employed and my mother a housewife. I’m on a reasonably good salary but banks won’t loan us enough to buy an averaged sized family home even though we have a reasonable deposit. My partner would have to be on an equally sized salary but her teaching job pays very little.
Sure we have some nicer gadgets and personal comforts but the cost of accommodation and property has skyrocketed way out of proportion.
> We went from multigenerational homes and kids living with their parents, inheriting their houses, and if buying -- doing it after they grew up and saved / got help to buy their own house. To a situation where everybody thinks the first thing you have to do after you get your first job is to get expensive mortgage and buy your own house
the situation is pretty much the opposite of this, we went from where folks could afford a house pretty quickly, sometimes even on a single salary, to double incomes not being enough, and the only hope of housing for some now being multigenerational and/or inherited
As a side effect of historically cheap money, house prices have risen so high that entire younger generations are locked out of home ownership in quite a few areas.
There are a few outliers but in general it's good jobs, affordable housing, pick one.
My gf and I are fortunate to earn high incomes and it still difficult to find acceptable housing.
Like you, I knew many upper middle class kids when I was younger. The only ones who have purchased houses (so far) are the ones who received help from their parents.
People with top paying jobs are still able to afford houses, thats nothing new. The problem is that there is a growing proportion of people that cannot.
I think this is a fallacy perpetuated by unrealistic ideals. I bought a house for 175K at 24. I only make 50K a year. I don't have a college degree.
Lot of people saying buying houses is hard, unrealistic, or impractical want to buy mansions with a 10 second commute to their workplace in silicon valley but the reality is most people are not living like that.
Wage workers are still buying houses no problem in what are considered "low income" areas as they have been and interest rates are better than ever.
I don't agree. I made under $80k in household income when I bought my first home in 2014. This was in (well, just outside) Seattle, which was and remains one of the more expensive markets in the country. I saved up for a down payment; it took years. It wasn't my dream home, but it allowed me to build equity and continue saving for the one that was. I am not ready to say "kids these days want everything handed to them," but I will say that if you can't commit to a decade-long, multi-step process, then it may seem impossible, when it's just rather hard.
That's not the problem here.
House prices (in my location) have risen from 4x the average annual salary to 10x. Like the above commentor, I'm better off than most and I can just barely manage to scrimp and save enough to enter the housing market, by buying the parents home at a slight discount. There's not much more I could sacrifice.
I have a huge advantage on the average Joe for a number of reasons and am still struggling. Sure, it's possible for me, but it's not possible for them. And that's the problem.
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