Why buying a house in the US is so hard right now

We charted America’s homeownership problem.

This video is presented by Secret Deodorant. Secret doesn’t have a say in our editorial decisions, but they make videos like this possible.

Homeownership in the US is basically synonymous with the idea of the American Dream. Owning your own home, the story goes, confers both self-determination and security — instead of paying a landlord, you own a growing asset that will form the base of your wealth. Homeownership is ingrained in US society; the majority of American adults are homeowners.

But somewhere along the line, something changed. Homeownership has been way less accessible to millennials and gen Z than it was to their parents, in part because of dwindling housing supply. But even within that generational disparity, 2023 was a uniquely bad year to try to become a new homeowner. Watch the video above to see exactly how bad, and why.

Sources and further reading:

[matthewklitzke]

Worst financial mistake of my life was not buying a house when I was 4 in 2008

[danielkjm]

*Treating a home as an investment rather then a basic need is the problem*

[benjamindavidson]

To my own research In USA, individuals living in cars due to partial homelessness result from a complex interplay of factors. High housing costs relative to income, stagnant wages, and income inequality drive this issue. Job loss, weak social support, medical expenses, evictions, and lack of affordable housing also contribute, while systemic problems and inadequate policies further perpetuate the phenomenon.

[alexsteven.m]

From my analysis, people overpaid for homes even while loan rates were low, I believe there will be a housing catastrophe because these people are in debt. If housing costs continue to drop and, for whatever reason, they can no longer afford the property and it goes into foreclosure, they have no equity since, even if they try to sell, they will not make any money. I believe that many individuals will experience this, especially given the impending mass layoffs and rapidly rising living expenses.

[NicholasBall]

In the early 1990s, when I bought my first home in Miami, first mortgages often came with rates of 8 to 9% and 9% to 10%, which was quite common. It's important to consider that we may never return to 3% rates. If sellers are compelled to sell, home prices may need to decrease, leading to lower valuations. I believe many others share this line of thinking.

[DonaldMark-nese]

Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.

[graceisNERD]

I don’t want to own a home as an investment. I want to own a home so I don’t have to move every couple years. I want to own a home so I can paint the living room. And sure, I don’t want to be throwing away all my rent money that could go towards actually owning something.

[SteveDutton-v]

In my opinion, a housing market crash is imminent due to the high number of individuals who purchased homes above the asking price despite the low interest rates. These buyers find themselves in precarious situations as housing prices decline, leaving them without any equity. If they become unable to afford their homes, foreclosure becomes a likely outcome. Even attempting to sell would not yield any profits. This scenario is expected to impact a significant number of people, particularly in light of the anticipated surge in layoffs and the rapid increase in the cost of living.

[Alxium]

I like how this completely ignored the fact that hedge funds are buying an large percentage of single family homes as investments.
Also ignored wild renting prices as well.
And the solution given was for young people is to "invest" in other things. Basically "you don't need to own your home". That is disgraceful.

I don't CARE about investing in a home. I want a home so I have somewhere to LIVE.

[slowbro]

My grand parents bought their house in 1950 for 16, 000$
The same home now lists for 400, 000$. They were able to afford it with one working as a chocolatier and the other a mechanic. I manage a theater for Santikos and I can barely afford just rent.

[Aarrenrhonda]

I think it's time to make it more appealing for potential buyers. Real estate can be quite the rollercoaster! the stress and uncertainty are getting to me. I think I'll cut rents to attract potential buyers and exit the market, but i'm at crossroads if to allocate the entire $680k liquidity value to my stock portfolio?

[Donthaveacowbra]

The issue you left out for this was rent prices vs median home prices 😅 rent outpaced even housing

[DocFaust]

Weird way to end it. “A house is not your only option” no other options offered. 🙄

[tonysilke]

I’m a new dad, I moved to the Bay Area a few years ago and I’m thinking of purchasing a single family home, but with real estate prices currently through the roof, is it still a good idea to buy a home or should I invest in stocks for now and just wait for a housing market correction? I heard Nvidia and AMD are strong buys.

[DoomFinger]

One big factor that was left out of this housing crisis is all the house flippers who started buying up houses, doing some remodeling, then flipping it for a profit. Taking 'fixer-upper' houses that a first time homeowner could have afforded off the market, and reselling it to people with a higher income.

[maszlagma]

This is an issue all across the developed world right now, but our boomer leadership seems to believe that it's somehow our fault not working hard enough. It's very distressing.

[SomeThingElseYT]

With the "lack of supply" argument at play here, I would also like to see what that chart would compare to the number of homes purchased by rich "entrepreneurs" who "invested" in homes that are left vacant due to lack of affordability or selling at a loss. The amount of homes that go unlived in because rich people bought them out to sit and sell, artificially inflating the market as a whole.

[mangos]

I only ever want these videos written, edited, and published by people who do not own a home

[ChristopherAbelman]

I have owned long term and short term rentals for years. I found the short term rentals were a lot easier to manage. On occasions, I had the short term renters leave me gifts! I find people on vacation are in a good mood and 99% of the time left my properties in great shape. So I'm enthusiastic about getting involved. Is this a good time to buy property and where?

[cancerino]

Money being worth less and less and houses more and more is basically a wealth transfer from who bought houses long ago and who works for money right now.