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Nobody Is Moving, Especially Millennials (nymag.com)
For a fun new entry into millennials are lazy, consider this: According to new data tracked down by Richard Fry for Pew Research, just 20 percent of 25- to 35-year-olds (Old Millennials, if you will) reported having lived at a different address the previous year. From a report on NYMag: In 2000, a full 26 percent of Gen-Xers -- then at the same age range -- had reported making a move in the previous year. In 1963, members of the Silent Generation moved at a 26 percent rate, too. The census data being used here doesn't include college-dorm moves prevalent with 18- to 24-year-olds, so those young'uns are left out of the analysis. The 20 percent rate is the lowest level of young adult mobility in half a century, Fry reports, and all this with millennials getting married, owning homes, and having kids less than previous generations. Student debt and less favorable lending rates may be driving down homeownership -- imagine that -- which further reduces movement. Psychologically, this also means that young adults are more stuck with their personalities and faded of memory compared with their more mobile peers.
Millenials have fewer job prospects in general and are less wealthy than their parents were at the same age. This is true by a variety of different metrics. See e.g. http://www.usatoday.com/story/money/2017/01/13/millennials-falling-behind-boomer-parents/96530338/. In the last few years, something, it isn't clear what, has been drastically reducing the resources available to young people. This is combining with cost disease http://slatestarcodex.com/2017/02/09/considerations-on-cost-disease/ in a way that is leaving many people in the young age bracket with far less effective purchasing power than their parents would have had for many things. It isn't completely the case; some goods such as computers and cell phones are far cheaper (and often weren't even available to their parents) but that's a relatively small fraction of their total goods. Some other trends are clear positive, such as the reduction in poverty in the US, and the overall trends throughout the world are mainly positive. See e.g. https://singularityhub.com/2016/06/27/why-the-world-is-better-than-you-think-in-10-powerful-charts/. But the US specific young people are clearly going through a bad time in general.
Most of the stuff mentioned I can agree with. But less favorable lending rates? Only a Millennial ignorant of history would think that. Mortgage interest rates are the lowest they've been in 60 years. My generation (gen-x) had to deal with mortgage interest rates double what they are today. My parents had to deal with 17% interest rates. You have to go all the way back to 1955 to see interest rates as favorable as they are today.
With a 4% interest rate on a 30 year mortgage, 42% of your payments over the life of the loan are interest.
With a 8% interest rate, 62% of your payments are interest.
With a 17% interest rate, 81% of your payments are interest.
For just about anyone alive today, there has never been a better time to get a mortgage to buy a home.
Hopefully this time they don't bail out the banks and and the idiots who bought mcmansions.
And how do you imagine that would work out? If everyone's bank accounts suddenly evaporate, your savings will be gone. And your employer's bank accounts will disappear. And your employer's customers' bank accounts will disappear. And then you have riots in the streets.
I suppose the houses that escape the fires will be cheaper, assuming anyone has money to buy them. You won't be able to get a loan because the banks will be gone, and you'll have no savings, so it's not clear where that money will come from.. And it's not clear what currency anyone will be accepting.
My wife and I make over $100k together and we can't yet afford a 2b/2ba condo in Orange County, CA within a 30 minute commute to work. That kind of place with a garage goes for ~$500k. Thus, if you don't want PMI, you need to have $100k in cash on hand PLUS financial buffer and moving costs. So we rent. We pay ~$1,845/mo for our 1b/1ba. And there's a catch-- lease renewal increases are around $50, but the increase is lower than the ~$90/mo annual market rental increase over the last few years. So, if you want to move, you're almost guaranteed to be moving into a more expensive apartment.
And there still isn't any inventory to buy. There are too many people buying to turn around and immediately rent out those places.
So, despite out income and despite our savings, we're staying put.