Home affordability crisis taking a toll on America's young adults
2025-02-02
Category: economic

The ability to buy a home has become increasingly difficult in the U.S. in recent years, and some experts are concerned about the long-term impact on young adults, who currently have a higher hill to climb to achieve the American dream than previous generations. &quot;Rising interest rates, inflated home prices, and stagnant wages are forcing many into a cycle of lifelong renting, where building equity feels increasingly out of reach,&quot; said real estate investor Lori Greymont. &quot;Without strategic shifts, we&#x2019;re watching an entire generation get priced out of the American dream.&quot;  Dr. David Phelps, a financial expert and founder of the real estate investing community Freedom Founders, told FOX Business that while some people have claimed Gen Z is lazy and entitled when they complain about the cost of housing today, he does not believe that is accurate.&#xA0; &quot;Gen Z is correct&#x2014;housing absolutely has become unaffordable for a significant portion of our population, especially that generation,&quot; Phelps said. &quot;Wages haven&#x2019;t kept up with inflation or the rapidly rising home costs, and that&#x2019;s before you even factor in rising interest rates and tightening underwriting guidelines.&quot; EXISTING HOME SALES FALL TO LOWEST LEVEL IN NEARLY 30 YEARS Phelps said that based on the average salary in the U.S., a home buyer can afford a home that costs $110,928, which is a fraction of the median home price of $420,400 today. &quot;In other words, it&#x2019;s not just a matter of making coffee at home and skipping the avocado toast,&quot; he said. &quot;The math doesn&#x2019;t work for Gen Z.&quot;  Tom Spaeth, owner of Easal Properties, said that in the last 10 years, the supply of homes that young families on a median income can afford to buy has gone from 50% of the available homes to a mere 15% as home prices and mortgage interest rates have risen. TRUMP WANTS TO FIX THE HOUSING AFFORDABILITY CRISIS: WHAT IT WILL TAKE He said that has happened &quot;All while large institutional investors are purchasing a record number of homes, forcing young families into renting in lower quality neighborhoods, disrupting the education of their children, increasing the families financial stress and creating housing instability.&quot;  Psychotherapist and author Jonathan Alpert says the housing affordability crisis isn&#x2019;t just about economics&#x2014;it also takes a serious psychological toll on young adults.&#xA0; &quot;Many Gen Zers are experiencing anxiety, frustration, and feelings of failure as they struggle to achieve what previous generations saw as a rite of passage,&quot; Alpert said. &quot;Owning a home has long been tied to stability and success, so when it feels out of reach, it can lead to self-doubt and a sense of being &#x2018;stuck&#x2019; in life.&quot; GET FOX BUSINESS ON THE GO BY CLICKING HERE Alpert says he is hopeful that as economic conditions shift, opportunities will open up.&#xA0; &quot;In the meantime,&quot; he told FOX Business. &quot;Resilience, adaptability, and a change in narrative around this topic is crucial for navigating these challenges.&quot;