'Disenfranchised' millennials feel 'locked out' of the housing market and it taints every part of economic life, top economist Mark Zandi says
Few milestones in life mean as much to the American Dream as owning a home. And millennials have encountered the kind of trouble totally befitting their generation, which largely graduated into the teeth of the disastrous post-2008 job market. Just as they entered peak homebuying and household formation age, housing affordability is at 40-year lows, and mortgage rates are near 40-year highs.
The anxiety this generation feels about the prospect of never owning their own home affects their entire perception of their finances and the economy, says Moody’s chief economist Mark Zandi.
“If they feel like they’re locked out of owning a home it colors their perceptions about everything else going on in their financial lives,” Zandi says.
Millennials have long been dogged by a brutal housing market. They faced not one, but two, cataclysmic economic events—the Great Financial Crisis in 2008 and the pandemic in 2020. Both of which left them reeling financially and struggling to afford a home. The Great Recession decimated the real estate market as the economy nearly collapsed under the weight of tenuous mortgage backed securities. While the pandemic brought with it a remote work boom that caused millions of citydwellers to flee to the suburbs, sending housing prices soaring.
And yet, it's reality. Same property size will go from millions to 100ks.
2.5mil~3mil prop will be 250k~300k.
Which is indeed, 90% less. Math is hard yo.
This is less a case of the difference and more a case of "center if major cities are hyper inflated and priced dumb, ignore them if you are a millionaire", going literally 1-2 steps out and the hyper inflation rapidly fades out back to normal prices.
A better way I could word it is: "properties in the middle of cities tend to be overpriced by about 10x." If that makes more sense.