Why can't today's young adults leave the nest? Blame high housing costs • Hacker News Board

Re: Why can't today's young adults leave the nest? Blame high housing costs

#101

Post by wait_a_minute » Fri, Jan 12, 2024, 10:21 PM UTC

hotpotamus wrote: post #96

wait_a_minute wrote: post #82

Earlier quoted context omitted.

People have decent enough access to fiat already. Certainly better than what our parents and grandparents and so on went through. What’s absent is the foresight to think about the future with wisdom. People are in party mode for too long and think life is just about single life living or an endless consumption-based vacation type of experience. We require a return to maturity and responsibility and clear, focused tho…

I suspect wisdom is not having children when you can't afford to take care of them. Just ensuring that my own medical care is met is a challenge - to add a couple kids to that equation is a terrifying notion. School and housing certainly haven't gotten any cheaper either.

There are always exceptions and it’s fine if wisdom leads someone in this direction.

I believe those costs will decrease in real terms with time. Note that we were also higher up discussing staying home longer precisely to facilitate more affordability for the individual, an additional 3-5 years saving and investing into career and skills will help most individuals in this area significantly if they can do it.

Re: Why can't today's young adults leave the nest? Blame high housing costs

#102

Post by rufus_foreman » Fri, Jan 12, 2024, 10:31 PM UTC

aschearer wrote: post #65

atonse wrote: post #15

(Genuine questions, please don't misinterpret as negative judgement): How much of this is actually new as far as income vs costs, and how much of this is unwillingness to make sacrifices that older generations did? For example, in my 20s (20 years ago), it was very common for 20somethings to live in shared housing with 2-3 roommates. They would share kitchens, fridges, everything. And these houses weren't even that g…

Twenty years ago the Case-Shiller index was 140. Today it's 312.[1] The index tracks individual home sales over time -- that is a single home sold repeatedly. I interpret that to mean someone purchasing a home today must have roughly twice the resources to purchase the same home as someone in the past. Which leads me to conclude it's harder to own a home today than in the past all else being equal. What's your interp…

> I interpret that to mean someone purchasing a home today must have roughly twice the resources to purchase the same home as someone in the past

Case-Shiller is not adjusted for inflation. In addition, it does not take into account interest rates. Until recently, mortgage rates were extremely low. It takes less resources to pay the mortgage on a $1,000,000 house at 3% interest than it does to pay the mortgage on a $250,000 home at 19% interest (which is where interest rates topped out at in the 1980's).

Re: Why can't today's young adults leave the nest? Blame high housing costs

#103

Post by hotpotamus » Fri, Jan 12, 2024, 10:32 PM UTC

wait_a_minute wrote: post #101

hotpotamus wrote: post #96

Earlier quoted context omitted.

I suspect wisdom is not having children when you can't afford to take care of them. Just ensuring that my own medical care is met is a challenge - to add a couple kids to that equation is a terrifying notion. School and housing certainly haven't gotten any cheaper either.

There are always exceptions and it’s fine if wisdom leads someone in this direction. I believe those costs will decrease in real terms with time. Note that we were also higher up discussing staying home longer precisely to facilitate more affordability for the individual, an additional 3-5 years saving and investing into career and skills will help most individuals in this area significantly if they can do it.

I don't believe costs will decrease because they never have in my lifetime, and I don't think I can be called a young adult any more. I'd be happy if they did though.

Re: Why can't today's young adults leave the nest? Blame high housing costs

#104

Post by toomuchtodo » Fri, Jan 12, 2024, 10:35 PM UTC

jevoten wrote: post #97

toomuchtodo wrote: post #83

Earlier quoted context omitted.

We disagree it’s a problem, or that a fix is needed.

Populations that don't think it's a problem will be replaced by those who do.

I don’t think attempting to outbreed each other out of some concern about replacement is a rational or logical course of action, but alas, such is the human condition. A concern for someone else.

Re: Why can't today's young adults leave the nest? Blame high housing costs

#105

Post by fallinghawks » Fri, Jan 12, 2024, 10:44 PM UTC

atonse wrote: post #15

(Genuine questions, please don't misinterpret as negative judgement): How much of this is actually new as far as income vs costs, and how much of this is unwillingness to make sacrifices that older generations did? For example, in my 20s (20 years ago), it was very common for 20somethings to live in shared housing with 2-3 roommates. They would share kitchens, fridges, everything. And these houses weren't even that g…

When I graduated and moved out -- mid 1980s -- I had no desire to share an apartment with anyone, and no need since apartments were still kinda affordable. They were not the majority of your paycheck -- maybe 30, 35%. When we got to the early 2000s rents started to climb and I started hearing a lot more about people needing roommates. Wages have not kept pace with rent, not by a long shot.

Re: Why can't today's young adults leave the nest? Blame high housing costs

#106

Post by spacemadness » Fri, Jan 12, 2024, 10:49 PM UTC

autoexec wrote: post #60

atonse wrote: post #15

(Genuine questions, please don't misinterpret as negative judgement): How much of this is actually new as far as income vs costs, and how much of this is unwillingness to make sacrifices that older generations did? For example, in my 20s (20 years ago), it was very common for 20somethings to live in shared housing with 2-3 roommates. They would share kitchens, fridges, everything. And these houses weren't even that g…

> How much of this is actually new as far as income vs costs, and how much of this is unwillingness to make sacrifices that older generations did? Considering that the costs of everything have not only skyrocketed but wages were stagnated for decades ( https://www.pewresearch.org/short-reads/2018/08/07/for-most-... ) before declining ( https://www.axios.com/2023/09/12/real-incomes-fell-last-year... ) - the largest de…

It makes me sad that “not making sacrifices” can be said with a straight face to the latest generations growing up in our never ending housing and affordability crisis. I’m really starting to get fed up with people in my own generation (Gen-X) who increasingly seem to be losing the plot.

Re: Why can't today's young adults leave the nest? Blame high housing costs

#107

Post by johnchristopher » Fri, Jan 12, 2024, 10:51 PM UTC

atonse wrote: post #15

(Genuine questions, please don't misinterpret as negative judgement): How much of this is actually new as far as income vs costs, and how much of this is unwillingness to make sacrifices that older generations did? For example, in my 20s (20 years ago), it was very common for 20somethings to live in shared housing with 2-3 roommates. They would share kitchens, fridges, everything. And these houses weren't even that g…

Reading comments like that, if they are not loaded questions or trolling in disguise, really saddens me. How out of touch some people are that even in the face of raw numbers and interpretations they come up with "but what if people are just lazier now ?". It's like reading climate change deniers routine.

Re: Why can't today's young adults leave the nest? Blame high housing costs

#108

Post by aschearer » Fri, Jan 12, 2024, 10:55 PM UTC

rufus_foreman wrote: post #102

aschearer wrote: post #65

Earlier quoted context omitted.

Twenty years ago the Case-Shiller index was 140. Today it's 312.[1] The index tracks individual home sales over time -- that is a single home sold repeatedly. I interpret that to mean someone purchasing a home today must have roughly twice the resources to purchase the same home as someone in the past. Which leads me to conclude it's harder to own a home today than in the past all else being equal. What's your interp…

> I interpret that to mean someone purchasing a home today must have roughly twice the resources to purchase the same home as someone in the past Case-Shiller is not adjusted for inflation. In addition, it does not take into account interest rates. Until recently, mortgage rates were extremely low. It takes less resources to pay the mortgage on a $1,000,000 house at 3% interest than it does to pay the mortgage on a $…

Inflation: according to several calculators online, $100 in 2003 is roughly $170 (rounding up) in 2023 dollars. So 70% over 20 years. Meanwhile Case-Shiller has grown 123% over the same period.

Interest rate: in 2003 the interest rate was in the high 5's. Today it's in the mid 6's. So let's call it a wash.[1]

What I'm saying is, today someone is buying the same house, at roughly the same interest rate as someone twenty years ago except that today 1) the house is twenty years older, 2) it's also about 30% more expensive after adjusting for inflation.

I grant that means the person needs fewer than 2x the resources, but my point still stands.

[1]: https://fred.stlouisfed.org/series/MORTGAGE30US

Re: Why can't today's young adults leave the nest? Blame high housing costs

#109

Post by poisonborz » Fri, Jan 12, 2024, 11:04 PM UTC

aantix wrote: post #14

I'm surprised with remote work we haven't seen a resurgence of the small town. Towns within an hour of a bigger city, but small enough where the real estate is still reasonably priced. Maybe when this young adult generation starts to consider kids, this option might become attractive.

> Towns within an hour of a bigger city, but small enough where the real estate is still reasonably priced.

Haha. In my EU region those towns, and even villages around those towns are outpriced. What you can afford with a garden, 2-3 rooms you need to look in end of world villages, and those building are from the 60-70s.

Re: Why can't today's young adults leave the nest? Blame high housing costs

#110

Post by johnchristopher » Fri, Jan 12, 2024, 11:10 PM UTC

advael wrote: post #32

atonse wrote: post #15

(Genuine questions, please don't misinterpret as negative judgement): How much of this is actually new as far as income vs costs, and how much of this is unwillingness to make sacrifices that older generations did? For example, in my 20s (20 years ago), it was very common for 20somethings to live in shared housing with 2-3 roommates. They would share kitchens, fridges, everything. And these houses weren't even that g…

No, the vast overwhelming majority of people in major cities (where the jobs are) rent houses with roommates or live in small apartments. Moreso than in previous generations. Renting a house with roommates is increasingly the best long-term plan even many 30-somethings I know can ever hope to afford The instinct to assume that trends affecting entire generations of people are "personal choices" rather than economic i…

It's insidious. Here's a translation of something I just read today:

> Shared accommodation is on a roll. Traditionally aimed at students in search of cheaper rents and conviviality, it is now attracting young working people looking for flexibility and quality solutions to the increasingly restricted access to home ownership.

> Amandine Cloot and Paolo Leonardi are journalists with the Economy division. They came into the studio to talk about young people's current real estate real estate.

> Translated with DeepL.com (free version)

They make it sound like it's a choice.

It's getting clearer to me everyday that journalists are just parroting bullet points from "experts". Just like they call on temporary employment agency to talk about labor law reforms. We are fucked.

In my country they are trying to transform social housing (housing built by the state for low-income households or people who can't work anymore) into a investment product. They try to get deals with private investors to finance the buildings in exchange of interests on the rents or monopolies on services. Social housing can't bring in enough money to be an investment product. This won't end well.