Buying a family-sized home with three or more bedrooms used to be manageable for young people with children. But with home prices climbing faster than wages, mortgage rates still close to 23-year highs and a shortage of homes nationwide, many Millennials with kids can’t afford it. And Gen Z adults with kids? Even harder.
Meanwhile, Baby Boomers are staying in their larger homes for longer, preferring to age in place and stay active in a neighborhood that’s familiar to them. And even if they sold, where would they go? There is a shortage of smaller homes in those neighborhoods.
As a result, empty-nest Baby Boomers own 28% of large homes — and Milliennials with kids own just 14%, according to a Redfin analysis released Tuesday. Gen Z families own just 0.3% of homes with three bedrooms or more.
I bought my first house in 2010, during the last dip in the housing market. Sold every asset I could for the down payment and end up with a mortgage payment I could afford. The value of the home has since increased 3x from when I bought it; I couldn’t afford to buy the place today, let alone move someplace else. My major source of frustration has been property taxes, which now cost 1.5x more than my mortgage payment. I’m not entirely certain I’ll be able to STAY in this place if they keep going up 20%/year like they have been.
Somewhat similar here. Bought in 2011, with housing prices still depressed by the 2008 crash. Since then, we’ve put a good bit of money into the place (it needed work, still does). We also have kids now, so the space is really nice to have. The house now appraises for 2.5-3x what we spent for it, which is not justified by the money we’ve spent on it and is mostly driven by the market going nuts. While we might be able to swing the mortgage, were we to be buying the place now, it’d be very tight. Also, there’s just no incentive to move. The local schools are good. The neighborhood is nice, I work from home (wife doesn’t work), so there is no commute. We know and like our neighbors and regularly have neighborhood BBQs in the cul-de-sac… Sure, when the kids are gone, we might consider a smaller home further out, with more land and less neighbors. But more likely, we’re just going to keep putting money and effort into this house and let the kids drag our desiccated corpses out of the place.