Antonio Arellano, a spokesman for liberal youth organization NextGenAmerica, does not mince words on how younger Americans are feeling in today’s housing market. He says they’re hopping mad.
“Skyrocketing rents and house prices are especially hard on young people, who are already buried under student debt,” Arellano says.
“Inflation is a cruel tax that hurts younger, entry-level workers the hardest. It’s time to bring back fiscal sanity.”
— Anthony Sabatini, Republican candidate for Congress in Florida’s 7th Congressional District
As the highest inflation in 40 years continues to hammer Americans and their wages, a group that heavily voted for President Biden in 2020 is becoming irritated with the Biden administration’s impact on housing costs, Politico reports.
Home Buying Prospects Dim
Rising interest on mortgages, high rents, and inflation eating into wage gains that could be used for a down payment, threaten young Americans’ homebuying prospects. This unfortunate combination has caused a strong majority, over 80%, of Americans 18-34, to feel current economic conditions make now not the right time to buy a home, while just 25% of Americans of all ages think now is a good time to buy home, a Fannie Mae survey shows.
A respective 65% and 59% of Millennials and Gen Z believe homeownership is a sign of success, a Bankrate survey finds, but 44% of Millennials who do not own homes, said home prices have climbed too high, and 24% of Millennials said their credit scores are hampering their ability to own a home.
As a result of a housing market with very high barriers to entry for younger Americans, only 48% of Millennials expect to be homeowners in their lifetimes.
The problem is a longer-term one, with 63% of Millennials who plan on purchasing a home saying they have no money saved for a down payment, ApartmentsList reports.
The home ownership rate for Millennials is at 48.6%, per recent Census Bureau data, a figure that is almost 30 percentage points below the rate of Baby Boomers, despite Millennials being a bigger group.
As bad as this may seem, Martin Orefice, CEO of Rent to Own Labs, says the landscape is just as difficult for Gen Z buyers. While they may not be major homeowners now, they’re set to grow in market share in the housing market.
“Most of the trends that contributed to Millennials’ struggles finding homes still apply today for Gen Z house hunters,” Orefice says. “College education is expensive, and the debt that comes from it is a burden. Rent is high, making it hard to save for a down payment. Property values are incredibly high, too, and wages are fairly stagnant, especially when you control for inflation.”
While young voters overwhelmingly voted for Biden in 2020, the country’s oldest president has seen his approval ratings collapse to only 35%, Pew reported in July. In the 2020 election, 60% of those between 18-29 and 52% of those 30-44 voted for Biden, CNN exit polls showed.
Tara Raghuveer, a housing organizer who works as director of KC Tenants, tells Politico she has “observed young people mourning a future that was promised to them, that they now know is not guaranteed, is not coming,” adding that the Biden administration needs “to take a no-stoned-unturned strategy to regulating rents—and regulating rents today, not just in five years.”
Rents now stand at a national average of $2,495, increasing substantially in the first half of this year. Rent growth Year-over-Year (YoY) stands at 12.3% and so far this year, rent increases are at a rate of 6.7%, according to newly released National Apartment Association data.
On the purchasing side, the numbers are not rosy either. Prices for a home jumped nearly $59,000 compared to 2021, and the median price of a home nationwide for the first quarter of 2022 is $428,700. To top it all off, mortgage rates remain volatile.
If these figures are enough to cause a nervous breakdown, data from a Zillow study released in June backs it up. A respective 65% and 61% of Gen Z and Millennial homebuyers cried at least once during their house hunting experience.
‘Generation of Serfs’
For a generation of younger Americans struggling simply to gain a toehold in today’s housing market, the risk of Millennials becoming a permanent class of renters is real, especially when considering only 48% of Millennials own a home.
Fears over the worsening crisis are shared by members of both major political parties, with Democratic Senator Sherrod Brown of Ohio remarking, “Skyrocketing rents and a shortage of homes for sale are pushing homeownership further out of reach for millions more families — especially younger households. If we don’t address the high cost of housing, we could lock in and exacerbate the housing and wealth inequities we have.”
Anthony Sabatini, himself a Millennial at age 33, is a Republican candidate for Congress in Florida’s 7th Congressional District. Sabatini tells Newsmax Finance “Millennials are being turned into a generation of serfs. The only way to reverse this trend is to throw Biden out of office and start passing tax relief and targeted pro-growth policies for our younger middle class. Inflation is a cruel tax that hurts younger, entry-level workers the hardest. It’s time to bring back fiscal sanity.”
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