January 01, 2024
It may not qualify as “The Big Lie,” but the media feel the need to constantly claim that young people can no longer afford to buy homes. The latest salvo is the Washington Post telling how young people have to live with their parents to save money for a down payment:
“The trade-off comes down to temporarily relinquishing a measure of independence to achieve a milestone increasingly out of reach for people their age.”
This is not true. Homeownership rates for people under age 35 are actually above their pre-pandemic level.
Source: Census Bureau, Table 6.
It is undoubtedly true that the jump in mortgage interest rates in the last year and a half has made it more difficult for young people to buy homes, but many young people bought homes before rates rose. It also appears that mortgage rates are now falling again. They will almost certainly not fall to pandemic lows, although we may soon see rates under 6.0 percent, which would be low by pre-Great Recession standards.