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The article says "The conventional explanation for what’s freezing young adults in place is that they can’t afford to grow up, given rising inflation and balloo

by ndiddy 2y ago

The article says "The conventional explanation for what’s freezing young adults in place is that they can’t afford to grow up, given rising inflation and ballooning housing costs. Yet this doesn’t quite explain what’s going on." It attempts to counter this explanation by saying that median wages increased 16% between 2000 and 2024 after adjusting for inflation, but leaves out that median housing prices increased ~45% during the same time period after adjusting for inflation (source: FRED & BLS CPI inflation calculator). Of course this leads to fewer people moving out and having kids.

anotherhue 2y ago
Yes I really hate this false equivalence. What does it matter if certain metrics improved if we literally cannot purchase the (reasonable and necessary) things we want, like basic housing, childcare and healthcare. I don't want the money, I want the things people used to be able to buy with the money.
hdjjhhvvhga 2y ago
I find it ridiculous that the article blames the young generation. It is as if someone calculated their projected profits but the trends are different. Calling the young "Peter Pan"s will not solve the issue in any way. The society changes and marrying, taking a mortgage and having kids is no longer the norm.
- spwa4 2y ago
  That's what happens when owning a home is essentially the pension plan of 5 generations. Eventually you'll stop working due to age. Government or private pensions simply will not pay for you to live, to say nothing of inevitable increases in medical expenses. So you make investments. Housing has been the big investment people make. One might just as well say that you're blaming the older generation for not just dying to make place for the younger generation after 40/50 years of constant work. It's the same claim. If you take away housing as an investment ... will you then double existing pensions, by working harder? You'll call that absurd. So, here we are. The older generation has something you need and needs the younger generation to work and pay for their old age ... Banks are indeed profiting off this, but the very large bulk is pensions of tens of millions of other Americans.
DougN7 2y ago
My sons worry a lot about this. In my (non-economist) mind, this will sort itself out in a few years. All the old people that own homes will die. Those homes will be empty, and everyone moves up a level, or prices are forced to drop from lack of demand (or ability to purchase). The one thing that really screw up my scenario is private equity buying up homes, and maybe AirBnB-type companies renting what should otherwise be on the market. Those could (and should?) be fixed with legislation.
- mikewarot 2y ago
  Private equity firms are vacuuming up houses as they become available. Aging out of homeowners isn't going to help, sorry. Yes, governance is the answer.
ProfessorLayton 2y ago
Whats going on is that the U.S. also used to build housing! U.S. population has increased ~19% since 2000 [1]. Has there been an ~19% increase in housing in the last quarter century? (Spoiler: No!!). Basic necessities like housing are priced at the margins, so of course costs have exploded by ~45%, and they trickle into literally everything else getting more expensive. This is a political problem, and I've done the best I can to support the creation of more housing by voting accordingly, even though I've been lucky enough to buy at what now looks like a much more reasonable price. At this point it's up to younger people to push politicians to get more housing built, because the older generation has clearly voted for what they want. Not everything is a culture war, sometimes you just gotta show up at a hearing and tell your neighbor/councel member to STFU and let that multiplex get built. [1] https://www.census.gov/library/stories/2024/12/population-estimates.html https://www.census.gov/library/stories/2024/12/population-es...

by ndiddy 2y ago

anotherhue 2y ago

Yes I really hate this false equivalence. What does it matter if certain metrics improved if we literally cannot purchase the (reasonable and necessary) things we want, like basic housing, childcare and healthcare. I don't want the money, I want the things people used to be able to buy with the money.

hdjjhhvvhga 2y ago

I find it ridiculous that the article blames the young generation. It is as if someone calculated their projected profits but the trends are different. Calling the young "Peter Pan"s will not solve the issue in any way. The society changes and marrying, taking a mortgage and having kids is no longer the norm.

spwa4 2y ago
That's what happens when owning a home is essentially the pension plan of 5 generations. Eventually you'll stop working due to age. Government or private pensions simply will not pay for you to live, to say nothing of inevitable increases in medical expenses. So you make investments. Housing has been the big investment people make. One might just as well say that you're blaming the older generation for not just dying to make place for the younger generation after 40/50 years of constant work. It's the same claim. If you take away housing as an investment ... will you then double existing pensions, by working harder? You'll call that absurd. So, here we are. The older generation has something you need and needs the younger generation to work and pay for their old age ... Banks are indeed profiting off this, but the very large bulk is pensions of tens of millions of other Americans.

DougN7 2y ago

My sons worry a lot about this. In my (non-economist) mind, this will sort itself out in a few years. All the old people that own homes will die. Those homes will be empty, and everyone moves up a level, or prices are forced to drop from lack of demand (or ability to purchase). The one thing that really screw up my scenario is private equity buying up homes, and maybe AirBnB-type companies renting what should otherwise be on the market. Those could (and should?) be fixed with legislation.

mikewarot 2y ago
Private equity firms are vacuuming up houses as they become available. Aging out of homeowners isn't going to help, sorry. Yes, governance is the answer.

ProfessorLayton 2y ago

Whats going on is that the U.S. also used to build housing! U.S. population has increased ~19% since 2000 [1]. Has there been an ~19% increase in housing in the last quarter century? (Spoiler: No!!). Basic necessities like housing are priced at the margins, so of course costs have exploded by ~45%, and they trickle into literally everything else getting more expensive. This is a political problem, and I've done the best I can to support the creation of more housing by voting accordingly, even though I've been lucky enough to buy at what now looks like a much more reasonable price. At this point it's up to younger people to push politicians to get more housing built, because the older generation has clearly voted for what they want. Not everything is a culture war, sometimes you just gotta show up at a hearing and tell your neighbor/councel member to STFU and let that multiplex get built. [1] https://www.census.gov/library/stories/2024/12/population-estimates.html https://www.census.gov/library/stories/2024/12/population-es...