Generational Luck in the Housing Market
It was hard for young people to find work. And if you did find a job it probably wasn’t something you actually wanted to do.
But houses were cheap. Borrowing rates were also cheap. If you earned a decent living as a young person you could find affordable housing and finance it at a low rate.
We’ve just lived through the strongest labor market in decades. The unemployment rate has been historically low. And people changing jobs have seen the largest wage gains these past few years.
Housing prices are high relative to the recent past. Financing is also way more expensive. This double whammy of higher housing prices and higher borrowing costs happened really fast too.
Imagine you’re a Gen Z person with a good job who makes decent money. Does the strong labor market make you feel any better about how out-of-control housing costs have gotten in the past few years?
How do you compete in a housing market with baby boomers buying houses with cash and elder millennials who are sitting on a boatload of home equity who can trade up?
