Also, economics for Millennials have been terrible. They're of course going to have a terrible time trying to get a down payment together as well as afford a reasonable mortgage payment. Even assuming they use a 3% down mortgage program, they then have no equity, and are locked to the property if they need to move/relocate unless they're willing to default on the property (which then keeps them out of buying again for 3 years).
EDIT: As someone who has seen deep into the real estate market, the game is rigged.
Overall, the population of the U.S. is still (slowly) increasing, so even when the Boomers move into assisted living facilities and/or pass away, there is not likely to be a national surplus.
Could you elaborate? And what does it mean to the demographic described in the article?
People don't want to subsidize first time homebuyers, but they have no problem with the government subsidizing landlords (depreciation allowances, tax deductible mortgage interest). After so much distressed property ended up on the market after the housing collapse, private equity money swooped in to suck all the property up and charge "market" rent.
Millennials either need to adjust their expectations (get remote jobs, not be tied to areas with high cost of living that are going to extract a large part of their income from them) or fall into enough money to not only buy a property, but to weather any financial disasters they have so as to not lose their equity by losing their home. Hustling hard for years on end while being frugal is another option, but it is no guarantee of success.
I know more than a handful of people who have done this successfully, so I respectfully disagree.
I agree with the rest of your comment, just not the discounting hard work and being frugal part.
It's not a matter of working hard; sometimes there just aren't enough jobs to go around, or existing demand for someone to start a business to satisfy that demand.
I've known people who have saved for years, put down payments down, and then lost it all when their builder went bankrupt (and they had no recourse). Welcome back to square one.
5 years after I (a Gen Xer) finished college, I faced unemployment and mortgage rates just under 6%.
Today the unemployment rate is 5.5% and the mortgage interest rate is under 4%.
While buying a first house is never an easy thing to do, there are plenty of indicators that it's not harder today than it was in the past.
People wanting to start a business that isn't viable, bummer. Not enough jobs: I delivered papers, barbacked, worked a day job, figured it out. If they picked a bad builder, that sucks. Find your recourse. Be smart, be mature, figure it out.
Entitlement is a problem, working hard is not.
As a millenial with hope of some sort of real estate in my future, I've been thinking of buying an empty/distressed lot and rebuilding it, but I don't know how realistic that is.
Very reasonable. I've done this before. Let me know if you'd like to chat over email, and I'll get you my contact info.
Housing construction is a lagging indicator because of the regulatory and capital requirements to build a whole bunch of homes. So what we see right now is that demand is growing because the economy is growing again, but supply has not yet caught up. Result: fewer affordable houses.
In my neighborhood a new row house development was just breaking ground when the shit hit the fan in 2008, and of course they stopped. Well, they're building fast today, and selling every unit, but they're still not done. It just takes a while to build houses.
The only connection is Millenials is that they are the youngest generation currently looking to buy a home, so they are more price-sensitive than Gen Xers or Boomers.