Why the Younger Generation Finds Buying a Home Out of Reach

For decades, the complaint has been consistent: buying a home is an unrealistic goal for many young people. As a Mortgage Loan Officer in Marin County, California, for 25 years, I frequently encountered the same sentiment. Many young individuals felt that owning a home was beyond their reach, and my role was to explain that while buying a house could be challenging, it was indeed possible. This often included strategies like making a smaller down payment and outlining the estimated appreciation potential.

The Challenges of Supply and Demand

The primary issue lies in the limited and decreasing supply of land in desirable metropolitan areas that offer employment, education, decent weather, and access to recreational activities. Climate change-driven events such as fires, floods, storms, and heat further exacerbate the situation. Traditional homes require land, and the availability of suitable land is rapidly diminishing. This scarcity, combined with the increasing demand, have led to soaring home prices.

Until the 1960s, suburban towns still had vacant lots, and land further out could support new developments. However, this is no longer the case. The Lyndon Johnson Hart-Celler legislation, which opened the borders to immigrants from around the world, has led to a surge in population and development pressure. In 1967, homes that sold for twice a local government GS 15 salary are now priced at over a million dollars, which is nearly seven times the salary. This has contributed to a significant increase in home prices, driven by supply and demand.

The Role of Population Growth and Land Constraints

The population has nearly doubled since 1960, and the supply of buildable land has reached its limit or is significantly more expensive in inflation-adjusted terms. To fully understand the current situation, one should refer to historical home price data from newspaper archives and compare it with population change over the past century. It is essential to be aware of the misinformation disseminated by propaganda from those with an agenda, particularly those who support corporate interests.

Additional Financial Pressures

Aside from the increasing cost of land, property taxes have also doubled or more in inflation-adjusted terms, thanks to measures like the Hart-Celler and Simpson-Mazzoli acts. These taxes are used to cover costs associated with K-12 education and other services. As a direct result of President Biden's policy on open borders, the additional burden on taxpayers is projected to rise even further. The city of New York currently estimates an additional fiscal burden of 1.45 billion dollars for taxpayers.

Assessing Changes in Quality of Life

When someone argues that the quality of life has improved since the 1950s or early 1960s, it is crucial to challenge their perspective. Ask, 'Are you there, Charlie?' This phrase is a reminder to question their experience and ensure they have a basis for their claims about the past. It is important to evaluate changes in quality of life in the context of the evolving demographic and economic landscape.

Conclusion

The complexity of the issue surrounding home affordability requires a multifaceted approach. Understanding the interplay of supply, demand, demographic changes, and policy decisions is crucial for anyone aiming to navigate the housing market successfully. As we move forward, it is essential to remain informed and to challenge misleading information to make more informed decisions.