[ddorian43]

Whatever it is, it doesn't look good for young people. Good luck to them buying a house with these prices & interest rates, or trying to save for a downpayment while renting. The previous generation is hellbent on maximum extraction & I got mine mentality & rent-seeking.

[bryanlarsen]

I'd rather be a young person in the 2020's than a young person in the 1920's. That group was called the "greatest generation" for a reason, and it wasn't because they had it easy.

[anthonypasq]

what wonderful consolation, we might have it better than people 100 years ago. I sure am glad the system is working.

[consp]

Not just young people, those who missed the boat are left behind as well which is a considerable part of the population.

[ddorian43]

I agree, but people often try to demonize them like they had multiple chances (true & false, but still doesn't matter).

While young people never had a chance and it's easier to send the point across.

[smallmancontrov]

It's always a mistake to give in to Titanic Life Boat logic ("The design of the Titanic was fine, anyone could have gotten into a life boat / but could everyone get into a life boat? / what are you, a COMMUNIST?"). If you try to avoid the problem by focusing on young people, they'll just focus on a young person who made it and hold them up as proof that it's possible (see: person downthread "my daughter just bought a house"). Plenty of kids got into titanic life boats so it's fine, see? The rest just didn't hustle hard enough. Do you want society to be full of cripples who can't hustle into a lifeboat? Don't play that game.

No, if the system forces a growing fraction of people to lose we have to be honest about that, pin down why, and ask if it's really truly unsolvable. Hint: food and clothing and house construction have shrunk dramatically over time as a fraction of our economic activity. The first-principles problems did not get harder and we did not get worse at solving them. This hell is of our own design. It will hurt to solve, but it can be solved.

[ben_w]

> buying a house with these prices & interest rates, or trying to save for a downpayment while renting.

While there are certainly problems here, higher interest rates drive demand down and lower prices, while lower interest rates drive up demand and raise prices.

Investors tend to look for the best return on investment, the number I often see given is 5%/year. The rent I collect is close to that fraction of the market value of the apartment I own in the UK.

The choice between "rent" and "mortgage" is where the cost of the two is about equal in the first year, which is always a bit unfair on first-time purchasers as (1) they're generally younger and thus earning less money, and (2) the impact of interest payments is always front-loaded towards the beginning of the repayment period.

This in turn means that there's a temptation for very long repayment periods to make it seem easier: in a world of genuinely 0% interest mortgages, paying off a ¤600k over 40 years is clearly easier than paying it off over 20, and lower rates asymptotically approach this.

Conversely, when the interest rate is high enough that (even without paying off the capital and regardless of repayment period) it approximates the rental market rate of the property, this drives down demand. To see why, go back to that previous example of a ¤600k (sale price) property: if the landlord can ask for ¤2.5k/month rent, and the interest rate on a mortgage is 5% AER, then the cost to service the interest without paying capital is the same as you get from the rent — which means investors will ask "why should I buy this?" and renters will ask "why would I want that kind of mortgage?", forcing down the asking prices because the only people still interested are people who can do it without borrowing any money.

[gedy]

> The previous generation is hellbent

Previous generation is what, Gen X? Millenials? Yeah gee they had it so easy. Stop with the "generation blaming" stuff and blaming voodoo on them. Blame the people you vote for and who they kowtow to, nothing will ever change with petty envy and sour grapes for your neighbor down the street, etc.

[reedf1]

The older generations are larger than younger ones in a demographic balloon, hence older generations are a plurality. This has many externalities (for which I agree) are caused by people voting simply in their best interests rather than malice.

Now here is where I push back, is complaining about this unfair scenario "sour grapes" or "envy"? This is a winner takes all scenario. This wealthy group can vote for direct wealth extraction from the poor (which they do, again out of simple self interest) by constraining housing supply in an effective monopoly. That isn't fair, it's a moral hazard. It's not "petty" if you are proveably on the wrong side of demographics. Infact talking about it like this is the only way it can be fixed, as people can be informed into voting for the interests of someone other than themselves.

[lotsofpulp]

Define “older generations”:

https://www.populationpyramid.net/united-states-of-america/

Those in their 30s right now are the biggest proportion.

And 20 or 30 years ago, that population pyramid was even more tilted towards people in their 0 to 30s (obviously).

[reedf1]

https://www.census.gov/library/stories/2023/05/2020-census-u...

[lotsofpulp]

Your link is about rate of growth of population, your claim is about population.

The basis of your first paragraph will be true in the future, but is not yet (unless you define 30s and 40s as old).

The thing that makes the dynamic in your argument true is that young people do not (or cannot) vote and participate in the political process as much as old people can.

We have people who can no longer produce, but want to consume (and their potential beneficiaries) on one side, and on the other we have people can produce. The former group need to collect rent from the latter group, otherwise they offer nothing to the latter group in exchange for their production.

Which is funny when I see young people advocate for income taxes, when they should be advocating for property/inheritance taxes.

[asynchronous]

The inevitable outcome seems to be the younger generation giving up altogether and then social security is going to dry up real fast.

[_heimdall]

Social security is probably pretty low on the list of concerns if the younger generation(s) effectively give up.

When economies really get tough countries usually go to war, or the country fails entirely.

[ddorian43]

Especially with real estate. Either rent indefinetily by paying their pension , buy the house for 2x-3x+ the monthly rent so you pay their pension in lump sum, or go 1+ hour away from city(also high cost in terms of time etc).

The politicians are also older people who can't empathize. The young also don't vote.

And if you do buy high now, who are you gonna sell even higher when you retire, since there are so few new kids being born?

[gspencley]

> The young also don't vote.

This might change, fast.

I have two daughters who are in their early 20s. My oldest daughter, 24, has dreamed of buying a home and starting a family with her high school sweetheart of 10 years and her dream has been completely shattered.

The saddest part is, this isn't even just about buying a home. She's not going to start a family until they are no longer living with us and have a house of their own. But the longer it takes for that to happen, the more difficult and risky it becomes for her to start that family and forget about having 3+ children and starting at 35. That's even if there is a correction in the next 10 years.

So her dreams are completely shattered. She's not the only Gen Z out there that had these types of hopes and ambitions throughout their adolescence and early adulthood and are now feeling completely hopeless.

Just recently, here in Canada, there was a leaked RCMP report issued to the government warning it of potential civil unrest due the economic and housing crises: https://www.cbc.ca/news/politics/rcmp-police-future-trends-1...

Yes, it may be true that unemployment is at a low and stocks are up. That means absolutely nothing to young adults in their 20s who are still living with their parents, not by choice but because they have absolutely no hope of ever being able to buy a home of their own.

So I wouldn't be surprised if in the coming years we see record turn-outs of young voters.

[TimPC]

Do the young even have someone to vote for in Canada though? Only the PPC wants to stop immigration and build housing but they are a fringe party unlikely to get a single seat rather than run the country. The BQ is a decent option in Quebec, but in the rest of Canada pretty much any party that has seats currently is far too pro-immigration and far too pro-Boomer to get anything done on house prices. PP is very good at talking about how the other parties are failing while offering no real solutions himself for example.

[bryanlarsen]

Every party talks about lowering house prices, but the only government that has been successful at lowering prices has been David Eby's NDP government in BC.

So yes, the young have a great party to vote for.

[TimPC]

Eby's NDP government boosted housing starts by 11%. Rental prices still went up in Vancouver and the surrounding area because an 11% increase is a pittance compared to the insane demand from current immigration policy. Assuming that's even possible nationally and that the Federal NDP will have similar policies (both of which are dubious assumptions), that's not going to be adequate to keep up with the insane surge in immigration all of the big three parties seem to be behind. The Liberals at least appear to be somewhat open to minor course corrections but the NDP has historically and is currently the most pro immigration party in the country and it's not possible to get market conditions to improve if you want the population to grow by 2,000,000 people a year.

You can't bring in enough people for 800,000 homes if you have historically built around 250,000 and the best government in the country manages an 11% increase without inflating rents and making the housing crisis worse. We need to radically slow the insane surge in demand so that building more housing has a chance to keep up. Canada has historically had 2.3 people per home so if we increase builds to 300,000/year we can support bringing in roughly 660,000 people with stable prices. If we bring in 2M everyone can guess what will happen.

[gspencley]

I agree. And it will be interesting to see how the PPC performs (love them or hate them) because, as you said, the mainstream parties look an awful lot alike to people who are not firmly entrenched in a partisan position (i.e: many young people who are still figuring things out).

[westmeal]

For sure but I gotta ask, even if the young did vote who is there to vote for? The bipartisan system here is rigged IMO. Even if you vote for a less popular candidate they're usually still beholden to the party.

[bell-cot]

If the young reliably voted, for their own interests...then both parties have these things called "primaries", where their general election candidates are picked. Sometimes from a wide field of contenders, and usually with very low barriers to entry (either to vote, or to be a candidate).

My understanding is that career politicians' take on the youth vote is: "If the stars happen to align, and you play it right, the youth vote can win you an election. But usually not - so you should mostly let your opponent waste his time chasing the youth vote."

[Izkata]

Primaries have a weird system based on delegates, not direct votes. It's really difficult to know who you're actually voting for, I couldn't find any information on which candidate the delegates on my ballot were actually for.

[bell-cot]

At least in Michigan, the primary ballots pretty much list the actual candidates.

A few times, when things looked murkier, I've just contacted the local (city or county) party organization, and quickly gotten answers.

If that didn't work, I'd probably try contacting the League of Women Voters, County Clerk's office, or similar [non-]governmental groups that work at keeping track of such things. And some web searches, looking for primary candidates with on-line campaign info.

[giantg2]

Social security is drying up regardless of if the next generation gives up. Structural or demographic changes would be necessary to keep it afloat.

[pfdietz]

My daughter just bought her first house.

[yetihehe]

One datapoint is not a trend. I've built a house 3yr ago. I earn almost twice more now but couldn't afford it if I wanted to do the same today.

[ddorian43]

Yep. A pretty simple exercise for many people is if they can buy now the house they bought a couple of years ago. Or how their wage changed to support the new monthly payment if buying now. Or if they were renting now can they even save for the downpayment to buy their own house?

[andsoitis]

> One datapoint is not a trend.

Most adult Gen Zers are tracking ahead of where parents were at the same age - see homeownership rates by age for each generation: https://fortune.com/2024/01/17/redfin-baby-boomers-gen-z-hou...

[ddorian43]

What city/country, what total cost, what interest rates, how far from city center?

When you combine all these factors it's usually not a good place to be either renting or buying in most places.

[arrowsmith]

So?

[mc32]

The people in charge want it both ways so they keep on printing money and funding several optional wars simultaneously. They've kicked consequences down the road and seemingly, the new budget approved, kicks it further down the road. That and you add 10MM new legal+illegal immigrants in the span of three years to the housing demand pool and it pushes citizens further away from housing attainability. It's nuts. Then you have lax enforcement for criminal activity and you get what we have now.

If the Biden admin wants to win the election, they will have to deal with the fact that foreign workers are pushing out perhaps lazier American workers who are also unwilling to work for devalued wages caused by inflation. Foreign workers are used to inflation and whatever we have is better than what they have at home. The Admin will have to deal with that tension -else they will have more traditional core supporters hold their noses and vote for the other guy once again.

I'm quite certain if we had a Ross Perot running as a third party candidate, he or she would win. Biden is decrepit and can't decide if he's for American workers or foreign workers more. Trump shoots from the hip too much and is too thin skinned and impulsive.

[erellsworth]

Birth rates in the US have been below replacement levels for some time now. This means we will need more immigrants to sustain the never ending growth capitalism demands.

[notact]

The stock market may demand never ending growth, to keep generating positive returns. But how does capitalism itself (private ownership of production) demand never ending growth, any more than a planned economy would?

[andsoitis]

> The stock market may demand never ending growth, to keep generating positive returns. But how does capitalism itself (private ownership of production) demand never ending growth, any more than a planned economy would?

You're right that capitalism is when most of the means of production is privately owned (private ownership), but production and income distribution is largely through the operation of markets. More: https://www.britannica.com/money/capitalism#

[smallmancontrov]

> But how does capitalism itself (private ownership of production) demand never ending growth

If rich people own the world and growth = investment returns = how rich people get paid for being rich, do you think they want it to stop? Or will they (and the system they own) do anything to keep it going?

There's a reason why the moralizing lore of capitalism always happens at the bottom of an S curve even though most economic sectors spend most of the time at the top of an S curve. At the bottom of an S curve, a new investment frontier has opened up. By foregoing consumption today and investing, we can enable more/faster/better consumption tomorrow. Investors get part of the windfall, consumers get part of the windfall, everyone wins. However, at the top of an S curve, capital is plentiful and investment opportunities are scarce. The value of investment / foregoing consumption drops to nearly 0, and in practice probably goes slightly negative due to hope springing eternal / boondoggle chasing. That's all ok, the accounting will assign credit and blame in the end, but it's a huge problem if you are rich enough that you obtain your money by investing rather than by working. Suddenly, your source of income (sorry, capital gains, wouldn't want the IRS to tax you like a pleb) has gone away. If there is nothing to invest in, how do you get paid for investing? What to do?

Answer: pull any and every lever to get the growth train going again. But what if the growth is low quality? Doesn't matter. You are here to get paid, not to generate quality growth. Does it cause inflation? Not on your assets -- doesn't matter. Does it cause housing to become unaffordable? Doesn't matter. Does it cause imperial conflict when the overseas growth markets don't like your terms? Doesn't matter. As far as our economy is concerned, the important thing is that the people who literally own our economy get paid, all else is secondary.

NOTE: I'm not nearly as anti-capitalist as you might think. Capitalism is the best system for bringing the maximum amount of resources to bear on new frontiers. In a world that seems to be winner-take-all in so many respects, this may be the horse you want to bet on. Still, almost all of the Big Problems in the world today can be traced directly back to our economic structure. This is not an indictment: it would be true of any economic structure. Still, the question remains of whether what we do is worthwhile and how much we want to do to file down the sharp edges. IMO, it is worthwhile, but we should do more to file down the edges. YMMV.

[mc32]

Those same people in charge seemly also are cozying up to degrowth which is at odds with historical capitalism. I don't think they have figured out what they want which is why the approach is schizophrenic --that want econ growth and degrowth, they want pop growth but also don't want growth so their bargain is to import the growth that they don't want...

[AnimalMuppet]

It's almost like "those people in charge" are not a monolithic group...