How Millennials are dealing with a lack of affordable housing
For too many Americans, the gap between the minimum wage and the price of decent housing remains intraversible.
This emerges from a new report published by the nonprofit National Low Income Housing Coalition (NLIHC) that examines rental costs and compares them with state wages. The results tie in with other studies showing how Americans, especially young people, are struggling to keep up with rising housing costs.
Even so, millennials have not given up the fight and come up with a myriad of ways to survive and even thrive.
“Statistically speaking, America’s millennial generation (of which I belong) had the toughest start to their working years in vivid memories,” wrote Schuyler Velasco of the Christian Science Monitor, referring to the generation of workers born after 1980.
“Keeping up with skyrocketing housing costs and stagnating wages only distracts us from reading article after article about how our ability to earn a decent living was damaged by the fortuitous misfortune a few decades before the worst economic crisis of 80 being born permanently on its knees for years, ”she added.
However, the data looks dark.
In 13 states and Washington, DC, a worker would have to earn more than $ 20 an hour to afford a decent apartment, according to the NLIHC report. Affordability, based on common industry standards, means that a household spends 30 percent or less of its gross income on housing.
For example, in Hawaii, where the average hourly wage for a tenant is $ 14.49, getting a two-bedroom apartment in a 40-hour week would require an hourly wage of $ 31.61 – the highest of any state. In other words, a worker would have to work 163 hours a week on a government minimum wage of $ 7.75 an hour to afford a one-bedroom apartment.
That leaves “a luxurious five hours a week to sleep, eat, or spend quality time with your family,” noted Washington Post’s Ana Swanson, though she added that not all workers require two-bedroom homes and that some families require more have as a breadwinner.
The situation is also mirrored in other states where rental rates are well above affordable even when the minimum wage is above the federal standard of $ 7.25 an hour.
This is important because home ownership remains elusive even for millennials. In 13 metropolitan areas, the typical millennial is being priced out of home ownership, according to a Bloomberg report on the affordability of housing in US cities.
San Jose residents are having the hardest time because while millennials earn an average annual salary of $ 53,000 there, they would have to make an additional $ 80,000 a year to be able to afford a mortgage in this city. Bloomberg continued:
Places like New York, where millennials have an income gap of just $ 6,550, therefore seem relatively affordable. Keep in mind, however, that the New York metropolitan area statistical includes places outside of the high-priced real estate market in and around Manhattan where $ 374,350 (the median home value for the metropolitan area) wouldn’t even buy you a kitchen.
Many young people in today’s workforce “don’t have the cash to pay a down payment or can’t afford to buy where they want to buy,” said Mark Vitner, senior economist at Wells Fargo Securities LLC in Charlotte, NC. opposite Bloomberg.
However, this does not mean that all is lost to the millennial generation.
Experts encourage young people to actively save and invest money and be creative to lead an affordable lifestyle. And some millennials do just that.
In a survey by financial services company UBS last year, 45 percent of Americans between the ages of 21 and 36 said that saving and living frugally was the key to achieving their goals in life, compared with 39 percent of other generations. While Millennials tend to be skeptical about long-term investments, those who invest measure personal success by their own goals rather than by market developments.
“You are becoming a generation of savers who are afraid to see what happened to their parents during the Great Recession,” Emily Pachuta, director of investor insights at UBS, told The Guardian.
To find both affordability and authenticity, some young people are choosing to stay away from expensive cities and instead opting for less popular urban locations like Cleveland, Baltimore, and St. Louis – places that are not only cheaper but also cheaper Are you also bring a sense of community that can be lost in the big city.
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Others have adopted the shared living lifestyle, “hacking conventional living patterns” and living in large, rented houses with like-minded, technocentric individuals.
“[T]Here’s a good chance that we Millennials won’t be the lost generation that many feared, ”wrote Ms. Velasco from the monitor.