May 22, 2019

The Millennial Homeownership Rate Is About the Same as it was 25 Years Ago

Somebody asked recently about the homeownership rate among millennials. I’ve posted about this before, but the chart had too little detail to really see what’s going on. So here it is:

You might be surprised that the homeownership rate among young familes is nearly the same as it was in 1994. But you shouldn’t be. It’s true that home prices have gone up a lot in the past couple of decades, but remember two things: (a) prices have truly skyrocketed only in a small handful of hot cities, and (b) mortgage interest rates have declined a lot. Back in 1994 your 30-year loan came with an interest rate of over 9 percent. Today it’s a bit over 4 percent.

When you take mortgage rates into account and look at monthly payments as a percent of income, prices have been steadier than most people think. Here it is nationally:

The average monthly home payment has stayed remarkably stable since 1994. Here are average monthly payments for three big cities:

In order to calculate monthly payments as a share of income, I used income figures that are averages for the whole country since that’s all I’ve got. However, it’s worth noting that average incomes are higher in big cities, so the percentage of income it takes to buy a home is actually significantly less than these charts show. But the important thing isn’t really the absolute percentage anyway, it’s the change over time, and these charts show the change accurately.

Bottom line: Average monthly payments are up about a third in Los Angeles, but down a bit in New York and down a lot in Atlanta. With the exception of a few super-hot cities like San Francisco and Seattle, young buyers today face about the same cost to buy a home as young buyers of 25 years ago. So it’s not that big a surprise that homeownership rates among millennials aren’t really very different than they were among Gen Xers in the 90s.

POSTSCRIPT: Home prices are based on HUD data for the national series and on Case-Shiller indexes for the three city series. I assume a 10 percent down payment. Mortgage rates are from Freddie Mac. Median household income for 25-34 year-olds is from the Census Bureau.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

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