{"id":9565,"date":"2018-06-28T15:15:05","date_gmt":"2018-06-28T22:15:05","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=9565"},"modified":"2018-06-21T14:55:24","modified_gmt":"2018-06-21T21:55:24","slug":"what-everyone-gets-wrong-about-millennials-buying-houses","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/06\/what-everyone-gets-wrong-about-millennials-buying-houses\/","title":{"rendered":"What Everyone Gets Wrong About Millennials Buying Houses"},"content":{"rendered":"<p style=\"text-align: justify;\">Who had it worse when buying homes: the Boomers or Millennials? It might be a topic that makes Thanksgiving dinner tenuous, but now the argument has an answer. Well, sort of. According to a new report, home-ownership is technically cheaper than it was in the 1980s, but today it&#8217;s currently harder than ever to afford a home.<\/p>\n<p style=\"text-align: justify;\">On Tuesday, The Joint Center for Housing Studies of Harvard University released the 2018 State of the Nation&#8217;s Housing report, which the center puts out annually, delves into topics such as housing markets, changes in demographics, homeownership, rental housing, challenges, and more. Since the first report was released in 1988\u201430 years ago\u2014this year&#8217;s report took many chances to compare today&#8217;s housing market to that of the previous year. One surprising finding? Though median home prices are higher than ever, when adjusting for inflation, present-day homeowners are actually paying a little bit less monthly on their mortgage than their late-1980s counterparts did. This is because, though home costs have risen dramatically in the past three decades, interest rates are much lower than they were in 1988. A mortgage in 1988 came with rates over 10%, whereas today they are closer to 4.75%.<\/p>\n<p>Want to see how that fact checks out? Here&#8217;s the math. In 1988, the median home price hovered around $111,000. With a $22,200 down payment (20%), a $88,800 mortgage would have ended up costing $280,542 (or $779.28 monthly). Yes, $779.28 is insanely cheap, but when you adjust for inflation, that number gets surprisingly close to what you&#8217;re paying today for your monthly mortgage or rent. In 2018 dollars, the 1988 median home price comes out to about $237,124. Pay a 20% down payment of $47,424 down payment, and you&#8217;re left with a $189,704 mortgage that would have ended up costing $599,323, or about $1,664 a month. That&#8217;s pretty close to today&#8217;s numbers\u2014which surprisingly come out to $100,000 cheaper than their counterparts. The median home price today hovers around $330,00 (with a $66,000 down payment), a $264,000 mortgage ends up costing $495,773.63, or about $1,377 a month.<\/p>\n<p style=\"text-align: justify;\">But though today&#8217;s homeowners are paying a little over $250 less than their 1988 counterparts did for their mortgages, those mortgage payments are eating up more of their salary than ever. Nearly a third of all households used more than 30% of their incomes towards housing in 2016. Ironically, the first State of the Nation&#8217;s Housing report in 1988 called the national 3.2 home price-to-income ratio &#8220;historically high&#8221;, and only one metro area had a ratio above 6.0. Today, that ratio has increased to 4.2, and a grand total of 22 metro areas have a ratio above 6.0. Yikes!<\/p>\n<p style=\"text-align: justify;\">&#8220;If incomes had kept pace with the economy&#8217;s growth over the past 30 years, they would have easily matched the rise in housing costs,&#8221; Daniel McCue, a senior research associate and lead author of the report said in a statement. &#8220;But that hasn&#8217;t happened.&#8221;<\/p>\n<p style=\"text-align: justify;\">A bright spot? Despite the climate for homeownership being harder than ever, many people are still finding ways to achieve that American dream. Homeownership is surprisingly growing: Last year, 63.9% of Americans owned real estate\u2014close to the 64% rate of the late 1980s.<\/p>\n<p><a href=\"https:\/\/www.apartmenttherapy.com\/millennial-house-buying-trends-2018-259874\" target=\"_blank\" rel=\"noopener\">What Everyone Gets Wrong About Millennials Buying Houses<\/a> by Liz Steelman | Apartment Therapy<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Who had it worse when buying homes: the Boomers or Millennials? It might be a topic that makes Thanksgiving dinner tenuous, but now the argument has an answer. Well, sort &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2018\/06\/what-everyone-gets-wrong-about-millennials-buying-houses\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-9565","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What Everyone Gets Wrong About Millennials Buying Houses &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2018\/06\/what-everyone-gets-wrong-about-millennials-buying-houses\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"What Everyone Gets Wrong About Millennials Buying Houses &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"Who had it worse when buying homes: the Boomers or Millennials? 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