One of the biggest complaints that older generations have of millennials and younger generations in general, is that they’re not as independent as they were at the same age. But is this really the fault of millennials or is it something that they can’t control.
After all, wages used to stretch a lot further than they do now and house prices were also drastically lower, as this article shows.
How Prices Then vs Now
Eighty years ago, the average house price in the US was just under $3,000. If you adjust for inflation, this takes the total to around $40,000, which is tiny when compared to the average of over $200,000 today.
And this was just a couple decades after the Great Depression. If you flash forward to the 1980s, when parents of millennial were buying their homes, the difference was even more notable. Wages were nearing their highest, house prices were stable, and as a result the average age of a first time buyer was 25, compared to 44 today.
It was also easier to rent a home back then, with a fraction of a worker’s wage going toward their rent, compared to today, when the average city dweller spends most of what they make on rent, food, and other living costs.
Right now, house prices are the highest they have been in the country’s biggest cities. This has had a massive impact on several industries, all of which are flourishing, from
Estate planning lawyer in Long Island, NY to real estate management in Atlanta, but the people living in these houses are struggling to get by, paying more than half of their wages on rent.
This issue is not just resigned to the United States either. In fact, London has some of the worst examples of this. Just fifty years ago houses were built in the city to cater for the poorest citizens. This social housing offered them a chance to get their feet on the ladder, paying small amounts of money to live in the house. A couple decades later, the government enacted a law that said the people in these houses could buy them outright cheaply if they had lived in them for an extended period of time.
The prices they paid were very reasonable. Fast forward to today, those same houses are selling for 7 figures, and some of the owners, who purchased their properties for just a few grand, are renting them for in excess of $1,000 a month.
In London it’s common for someone earning more than an average wage to be spending over 70% of their wage on rent, even though many of them are living in tiny apartments. It’s a similar issue in Japan and other highly populated rich cities.