Young People and Housing
Making Sacrifices to Buy Real Estate
There is an interesting article in the Wall Street Journal today that details how more and more young people are making sacrifices to buy real estate these days. The gist is that they are giving up pleasures now (or the opportunity to invest their money elsewhere, not mentioned in the article) in order to build equity.
Hopefully a lot of young people won’t be sorry about this decision, but you never know. I know I would not buy housing in any of the hot markets these days, especially California like one couple in the article. They even say they don’t even have enough money to cover any repairs if something goes wrong, yet they are buying a new house. Scary thought. How about putting that money towards your retirement in some relatively low priced investments? You mean you haven’t heard the furor in the financial media lately that suggests you invest in blue chips? Shame on you… my guess is that the girl mentioned in the article has little if nothing going toward retirement savings, and is stretching herself to the limit to afford a house that might drop significantly in value over the next several years… Here is a quote from the article:
People in their 20s are more inclined to buy real estate now than they were 20 years ago, according to annual statistics from the U.S. Census bureau. In 2005, almost 26% of household heads under 25 years old owned their home, up from 17% in 1985. Homeownership rates for 25 to 29 year olds also increased over the past two decades, though not as sharply.
Wages the Same, Home Ownership Up Up Up
Interesting, huh? That’s a greater than 50% increase in homeownership, percentage-wise, from this group of under 25 year old homeowners. Let’s hope they all come out of it A-OK, especially with real wages the same or lower as 20 years ago.
