Is it really true that previous generations didn't have to sacrifice to buy homes? That seems patently false to me.
First, previous generations were significantly more thrifty which meant more cash on hand. Don't believe me? Let's say you save 30 bucks a day starting at 20 (most of us can easily do that by controlling how much we eat out) - that means you have 110k in your bank for a down payment on your 30th birthday (ignoring interest). How much of the current generation thinks that way and cares about saving 30 bucks a day?
Second and perhaps more obviously - our parents generation and their parents traded off affordable housing for long commutes. They weren't buying 3 bedroom apartments on park avenue, they bought 3 bedroom houses in the burbs and commuted an hour+ each way every day.
Compare to that, your options of working remote or living somewhere basic for a bit sound obviously better.
If you aren't willing to trade off what you want long term for something you can give up now, you won't have anything. And neither would anyone in a previous generation.
Okay. You now have a harder time at being accepted at the highest paying companies because you didn't graduate from a select few universities. Hell, in law, most companies where you can really earn a good wage don't even hire outside of harvard.
Ok, if you get into Harvard, go to Harvard. Your opportunities in the long run should outweigh any sort of student loans you have to pay back. If you're going to NoName Private College that's 90% of the cost of Harvard, go to state school instead.
And apply to scholarships. Lots and lots of scholarships.
So a 4 year degree is on the order of 30k, aka what a lot of people pay for one year on campus. That’s pretty easily achievable on entry level salary (I know, work while you’re in school, le horror). Even if you have to take loans the whole way that’s a car note.
Are there people who this is out of reach of? Yes. Would it be cool if it were free? Of course. Is it crippling debt that makes a comfortable life impossible? Don’t be absurd.
Don't forget that until about the mid 90s most people were only buying with one income. And even into the 2000s that second income was often significantly lower.
So that graphs never align that well when you look back and try to say 'in the past it was 3x salary for a house, now it is 6x'
That is as buyer are now competing for houses with two good salaries to buy with.
To add to this, the low interest rates have added the ability for these joint income purchasers to bid higher to win the property they want.
In the UK at least, the move has broadly been in line with the 3x joint salary with mild adjustment for increased borrowing opportunities, but largely driven by the increase in joint salary.
$30 a day is almost $1000 per month, that's completely unrealistic for 90+% of under 25s, most people don't hit that kind of saving power til they are 30. And I don't see any evidence in your post that previous generations did that? My parents certainly didn't, they started saving at 30 on teacher's salaries and bought a house three years later. That house (in Cambridge, UK) is now worth £800k, I can't afford that, despite earning far more than their salaries at retirement put together.
We are not talking about "90%+" here. This thread is in response to someone who "can't afford a house on a tech salary." Tech comp has been over 100K/year out of college for a while now, and even on somewhat less you should either be saving a ton or have much fat to trim in your expenditure.
It is true that good money can be made in tech, and that some companies pay > 100K/year out of college, but it's worth pointing out that even in the US this isn't true in general or in the majority of cases. There are a lot of people in tech making less than that even years out of college - it's largely a function of where you live and whether you land your first job at a handful of particular companies.
> Tech comp has been over 100K/year out of college for a while now
The vast majority of IT work in the US pays around half that.
Even taking that figure at face value...
> or have much fat to trim in your expenditure.
Yeah, fat like exorbitant rents that landlords keep jacking up year after year solely because they have the power to do so. Fat like corporations charging more for less because they can get away with it. Fat like our federal government and the banking system it artificially props up debasing our currency and whittling away at the buying power of those dollars.
The fat to trim ain't in individual working Americans' budgets. The fat to trim is systemic - and by God are we overdue for some trimming, no matter how badly it might hurt the feelings of the ownership class.
OK well tech comp is very much not that high in the UK, so I guess we're not all in the same boat here. But the fact remains that things are objectively, numerically harder for us, and getting a lesson in life from those who had it easier is not very convincing.
I suspect the numbers would be worse if you looked at households instead of individuals due to declining marriage rates (but I'm not willing to put in the effort to find numbers).
I don't understand what you're saying. To me, if the rate stays flat but represents fewer married couple, then this same rate actually means more homes are owned by people of that age.
Meaning - if guy and girl are married and own a house together, that counts as 2 people towards home owner bucket.
If they are not married, they'd need to each own a house for the same rate to hold.
First, previous generations were significantly more thrifty which meant more cash on hand. Don't believe me? Let's say you save 30 bucks a day starting at 20 (most of us can easily do that by controlling how much we eat out) - that means you have 110k in your bank for a down payment on your 30th birthday (ignoring interest). How much of the current generation thinks that way and cares about saving 30 bucks a day?
Second and perhaps more obviously - our parents generation and their parents traded off affordable housing for long commutes. They weren't buying 3 bedroom apartments on park avenue, they bought 3 bedroom houses in the burbs and commuted an hour+ each way every day.
Compare to that, your options of working remote or living somewhere basic for a bit sound obviously better.
If you aren't willing to trade off what you want long term for something you can give up now, you won't have anything. And neither would anyone in a previous generation.