Let's not forget high rent too! How can I possibly save when rent is so goddamn expensive?


My rent for an apartment is more than what my dad pays for his mortgage.


This is true. My mom pays probably around $800 for her house 3 bed 2 bath. I'm paying $1200 for a 2 bedroom 2 bath apartment


I'm paying 1850 for a 1 bed 1 bath... I feel your pain.


I'm in San Francisco and am renting a tiny studio for a little over $3k/month. Average price in the area seems to be creeping up to $4k/month. 😭 And to buy a 1-bedroom condo, you almost certainly need to drop at least 1 million. I need to move the hell out of here.


Move. I did. Born and raised in San Francisco (third generation) and now I live 20 minutes outside of Manhattan and pay a fraction of what it cost me to live 20 minutes south of SF. Yes, my wife and I make more money here too, it's why we moved in the first place, and my only real complaint is having to rake leaves several times in autumn.


What are... leaves...?




Outside of the concrete jungle, there are structures made of biomatter that create these "leaves". They're actually quite pretty in all seasons except for winter.


dixlectic canadians


It's only going to get worse unless there is a property price burst. And then the whole area's economy will tank.


The price burst will happen right after a major catastrophic earthquake, that's what usually happens in the bay area. Property was super cheap in SF in the 90s.


The price burst will happen when people get together and elect people that don't support the protectionist housing supporters and instead vote in people willing to let the city grow upwards.


Which is only going to happen when the Big One levels the damned place to the ground. It's okay, Boston is in the same boat until a hurricane at high tide finally floods the entire place, too. NIMBYs are greedy scum. The only way we'll ever be able to own property is when half the city is in ruins and suddenly, the property-owning class doesn't have more political power than the renters. Insurance isn't going to cover that shit. Either affordable housing gets built, or they're going to be forced to leave, too.


San Francisco is an area in which I can't see property values ever tanking. Like Manhattan, there isn't room to to sprawl out, and it would take societal collapse for either of them to become truly undesirable.


Correct. Prices may dip...but they won't drop. Even a major earthquake leveling 1/4 of the city would just be a boon for developers; it's true prices dropped after the '89 earthquake, and there was a recession at that time if I recall. But they didn't drop by much and it wasn't for very long. Limited space, proximity to Silicon Valley and climate (both political and natural) means SF is not suddenly going to become affordable to the average person...anytime soon. Source: born here, live here, have good job here, can't afford house here...and almost certainly never will.


If the city let people build higher than 3 stories maybe rent would come down.


Are we at a point with construction technology where the "but earthquakes" argument is indefensible?


Kind of is, it is moatly a scare tactic. Rich homeowners have much to lose otherwise.


Architect here. No. Bedrock is convenient but not a must. The skyscrapers in Chicago and LA are sitting on alluvial silt flats.


I think he is referring to the city policies that forbid building higher than 3 stories in most areas of the city, not the ability of the ground to support such buildings.


And IIRC sit on their own gigantic concrete rafts (in LA anyway) so they essentially "float" during earthquakes.


Isn't new York's economy more diverse though? If there's a technology bubble that pops wouldn't it have major impact?


Damn, that is expensive. Here in south texas, I pay 550 for mortage for 3 bedroom, 2 bath 1300 sq area house. Also cost of living is cheap so is the pay. Like many point out, I think they go hand in hand.




Places like SF, LA, and NYC really suck for people that grew up there because of how expensive it just to live close to your family and friends.


Especially when all your family has houses they've owned since the price of things was reasonable and you know you can either live in the city you love with the people you love or you can have a chance at owning property and starting a family of your own sometime before you're 50


This hits too close to home


Hey get a load of this guy, he has a home!


I'll be honest it's not always about 'coolness' but a sense of vibrancy and energy in certain cities that just isn't found elsewhere. Walk down Flatbush avenue in brooklyn and there's dozens of interesting people walking down the block and a ridiculous amount of shit to do... and it's not even a crazy gentrified place like Williamsburg. It just FEELS vibrant, it's not about hipsterness or anything like that. When I go to other cities like Cleveland or Memphis I often find myself wondering where all the people are. Everyone drives, nobody walks around, commercial avenues might have one person walking per block. It doesn't feel like a city. And once you live in a place like Chicago or brooklyn or philly you notice the lack of energy SO much more and it becomes kind of depressing. Google street view a commercial block in brooklyn and then do the same for Cleveland or other small cities and it's shocking the difference. There are a lot of reasons why people live in dense urban cultural areas besides wanting to be a hipster.


That depends on if you want "california cool" - beaches & extreme sports & yosemite & mansion parties...or "hipster cool who cares if its a decade out of date I'm a decade too old anyway". Which you can freaking get anywhere that has Facebook & some microbrews.


Those are 2 opposite sides of cali though


Jesus Christ. My mortgage on a 3 bedroom/ 2 bathroom house is $1,198. I live in Philadelphia.


Where in Philly? I'm paying $950 for a 1 bedroom a block from the convention center. It's awful, there are people chilling on my stoop a couple times a week when I come home. Also this was obviously once a 3 story house that my landlord split up into three separate units to maximize rent.


I'm paying more than that for a studio in University City and it sucks


I pay $2,400/m in Santa Monica. It's 5 minutes from work, but FUCK, does it hurt my wallet big time.


I live in Southern CA and my rent is $2,100 for a small 2 bedroom and I bathroom apartment. I pay more than my parents do for their home..


Rent being more expensive than a mortgage is *normal*


Studio apartment, $1250 a month, West Chester PA. It's outrageous. Edit: Honestly, it's definitely not cheap, but I really like the experience I've had at the apartment complex and the management has been fantastic. After my previous experiences in renting, this has honestly been heaven and I'm just blessed with the fact I can even afford such a place after graduation.


In West Chester? Holy crap.


Did you just find a really bad deal???? I didn't even pay that much for a one bedroom in center city in Philly.


I also live in Philly. I live in the northeast. My mortgage is $1,024 for a 3 bed, 2 bath.


That's a bargain for rent in Northern Liberties Philly


Damn. That will get you a 4BR, 3 full bath with attached 3 car garage here in the Midwest.


yea, but then you're in the midwest


If you watch movies and play video games, does it really matter if you're in Portland or Topeka?


More fun tech jobs on the coasts




Keep em out of the Midwest I say. The rent where I live is starting to get absurd.


Jesus Christ, I pay only $515/mo up here in Fargo...


Yeah, but Fargo.


Besides our shitty winters we're actually a pretty nice city. We have 3 universities so we have a lot more cultural amenities than you would think for a city of 200,000 people. We have a booming tech sector, too.


Plus all of us weirdos in Winnipeg come to visit all the time!


We have a Tim Hortons, now!


The Mall of America just got a Tim Horton's. Canada is annexing the upper mid-west. I won't stop them.


> Jesus Christ, I pay only $515/mo up here in Fargo. I pay 750 for a pretty nice renovated studio in Chicago near a train line and in a safe neighborhood. I have no clue why anyone would live in SF without a strong 6 figure income. Like, how do places like Starbucks find employees? Those people make like 12 bucks an hour and must live with 5 people. If Chicago had San Francisco weather it would probably be the same deal.






Who did you have to murder to snag a 1 bedroom in Vancouver for only 2k?


When did your mom sign her mortgage. Only asking because inflation and stuff


Not only inflation but how much has she paid for, how much was the initial mortgage, what was the interest rate, what type of mortgage, what is the value of the house today, etc...


$800 for that much house??? christ does she live in Wyoming? that size house in my area of Central Mass would be at least a half million


Im a millennial and I pay less than 700 a month for my mortgage and the house is a 4 bed 2 bath with a large front and back yard. Also, my commute to work is less than 5 minutes. Its all about where you live. I don't care to live in a high population/expensive area. Everyone has different priorities, Im grateful that mine mean low commute times and low cost of living.


How many and what kind of jobs are available in your area? People move to expensive cities because there's far more opportunities.


That's always been the case unless it's rent controlled. If mortgages were hire than rent, why would anyone rent their place out? Even if you buy with 3.5% down, your mortgage will be close to or less than rent. At 20% down, the mortgage is well under the rental prices, at least in my area. I'm paying $1200 a month for a house that rents for about $2000 now.


Shouldn't it be the other way around? Why would anyone rent if getting a mortgage is cheaper? Surely it should be cheaper than rent because they get a house at the end of the mortgage.


People rent for a lot of reasons. Bad credit, no down payment, don't want to be tied down to a place for too long. This is why rent is more than buying.


This is starting to be true everywhere. Millennials are not real people and they're only on Earth so that older people can make money off them.


> Millennials are not real people and they're only on Earth so that older people can make money off them. I'm stealing this, hope to make money off it somehow


That's what I never understood. They want this money and all these laws advantageous to them right now, with no concern for the future cuz they know they'll be dead. They don't care about the younger generation or how they leave the world. But maybe when I'm 50 I'll feel the same way who knows.


No.. I doubt that. You'll still care. Like most of us. But that is what Baby-Boomers will be remembered for. Greed. They are the embodiment of the Sin.


Baby boomers will leave a poor legacy.


don't give up, we'll outlive them. We'll have the time to change things for the betterment of everyone no matter how hard they try to hurt us (I truly think their motto is "bleed them dry until we die"). That's what keeps me going.


Unless, you know... they pollute the planet past the point of return.


That is my biggest concern actually, as long as we can prevent that (It's the key thing to fight in my opinion as all other things are moot with a dead planet), we can win, for lack of a better term, a 'war of attrition' against their life expectancies.


Of course it is. You probably don't live in the same neighborhood as your dad. (Maybe it's a more expensive one) Your landlord needs a profit margin in there. And your dad locked in that mortgage rate maybe as many as 20 years ago.


Ya that's one of the major benefits of buying house. You can't exactly compare prices/rates locked in 20 years ago to today.


Don't forget maintenance. Mortgage payment isn't the only expense that apartment dwellers don't have to pay. Most of them don't even own a lawnmower.


Moved out at 18, rent 600+ going up to 700+ after a couple years, got some great advice from an older friend in the housing business. At age 22 bought my 1st house with a 334$ monthly payment (another 100$ ish for taxes) 440$ a month for my house. With electric, water, garbage etc.. it comes in about 580$ a month.


Try that where I live. Your mortgage payment would be $3,264 per month with a 30 year mortgage. Average home sales: $690,400 Interest rate: 3.92% Mortgage period: 30 years


It's actually largely correlated with this. These companies know millennial can not afford to purchase, yet expect a certain quality. Turns out quality starts at 1500 for studio in most cities. And 2k+ in NYC, SF, Vancouver, etc.


The rent is too damn high!


I opened a new bank account recently and was asked if I wanted a savings account with it... then we both laughed and laughed.


My checking account gives higher interest than my savings account. What the actual fuck?


Ally has 1% and CapitalOne has .75% And all savings accounts suck


Rent is too high? No it's not, its only 70% of your pay...... Its not like its 100%............ /s


Then throw in things like food, cloths now and then and extra expenses, some months you are lucky if it is only 100%!


Can confirm, all of my clothes are falling apart and we only eat 2 meals a day. I'd be lucky if my living expenses equalled 100%.


I've always taken a historical view on finance.... Nothing demonstrates how immutably stupid we are than bubbles. They will always form because our view is so myopic. Right now student debt is safe awesome abed full of puppies because you can't get rid of it so ABS deriving from them are great hedges. Who cares that it fundamentally compromises economical solvency over time? The models still work! But the models suck.


Has the government tried printing more money?


Jesus. Come to Buffalo. Good food, good people, good beer, lake, fishing, sking, cool architecture, investment is up , located right near Canada (incase you gotta bail), not too small but certainly not overwhelming . Can always find something to do and rent is not anywhere near a problem. Yeah you deal with mediocre sports teams, some rough areas and a few months of rough snow, but even the snow is is the worst just south of thr city and not the metro area. Im able to follow my passion here, because it simply does not cost much to live in Buffalo.


Bills suck. Pass


What jobs are available? How many? How much do they pay? How likely am I to get into them with a bachelors? A masters? A PhD? What about only 1-2 years experience/interning in the field? Tell me that, then we can talk.


Just save 40k when rent is 75% of your post tax income!


* Government pushes interest low. * Loans become easier to get * More people buying stuff like houses that they can't really afford * House prices rise to accommodate the higher limit of loans that people can qualify for * ??? * Housing bubble It's a very similar story to the student loan debt crisis. Rent pricing just got dragged along with it because real-estate is so pricey.


I wish I could credit the redditor who said it, but the best comment I've seen about this was, "Well, what do you expect when you give a young person a mortgage and no home?"


Can confirm, student loan payments are more than my mortgage payments.


yup. my wifes student loans are more than the value of my house. good ol phd.


What people are having hard time admitting is they are generally much poorer these days. What's shifted is instead of making dirt wages, they have huge debt. So even though income looks ok, overall the balance sheet sucks. And things like home ownership is moving again out of the reach of many people.


It's interesting, I just read [Millennials: The Mobile and the Stuck](http://www.theatlantic.com/business/archive/2016/08/millennials-the-mobile-and-the-stuck/497255/) and they mention: > The primary reason that the U.S. now has a record-high number of 18-to-34 year olds living with their parents is not because some rich white twentysomethings are taking a year after graduation to save money. It is because black and Hispanic Millennials who didn’t go to college, or did not finish college, are more likely to live with their parents than any time since the late 1800s.


Triple down with the fact that many blacks/hispanics live in inner cities where rents have skyrocketed making it even harder for us to move out. Then you have whole demographic shifts occurring where "gentrification" is pushing rents up as well. Unless they have city/state jobs, most people are barely getting by and everyone is trying to get into housing lotteries and affordable housing programs to subsidize rents in bigger cities. It's funny how coming up I didn't want to live in public housing or be under some form of subsidized housing program but I'll take those options ASAP because rents compared to wages out here is crazy. My sister who is college educated but is a single mother living in a 2 bedroom apt currently pays 1,400 year to year lease. Her MGMT basically said her place at market value is at 2,500/month and they are going to increase until they get there by any means.


This. My salary looks really bad (I just saw my last pay stub with YTD, got depressed) but we have almost no debt. It's all about debt:income ratio.


Agreed - and about living below your means. Which is really hard to do when you have to start by taking on so much debt it will take decades to repay it.


I found that I had to teach myself lessons which my parents hadn't planned for -- they haven't experienced what I have, financially. I learned the hard way about college debt. I learned to cut my lifestyle and keep a budget. I've even delayed marriage and child rearing, and have many of my friends, as a conscious or unconscious response to the higher costs of a middle class life.




Even though houses are becoming increasingly more expensive in popular cities, The US has some of the most affordable places to live vs average income globally: https://www.numbeo.com/property-investment/rankings.jsp


We all spend too much and save too little.


We also spend too much on higher education.


I agree. Well... I couldn't afford it, so I didn't. But I hear ya.


Wages are flat but the price of everything else has gone through the roof over the last 30 years. We've suffered a huge overall decline in our standard of living, and everybody knows it except those living inside the DC beltway.


It's not sustainable. Right now, the economy is basically running on credit and the equity that older generations have built up over the last few decades. That equity will dry up over the next decade or two, and it will be replaced with yet more debt. This is a recipe for economic collapse and I think it's going to be much worse than what we saw in 2007. We are going to need some serious income redistribution if we are to avoid this.


Does it have anything to do with debt, though? Even those without debt are struggling. It's like joining a game of Monopoly half-way through. It doesn't matter how much money the bank gives you if there are no streets to buy and every street is filled with hotels and no one in the game wants to give you a helping hand. They only care about your money and don't care if they take it all and you lose. Except this is real life and losing can mean being broke and homeless.


Hey maybe the government shouldn't give student loans that allow the schools to ridiculously inflate prices.


Correct! The schools aren't gonna lower tuition if people still get giant loans to pay for it. Deny these loans and schools will have no choice but to lower tuition.


But then if that happens you SERIOUSLY fuck over poor people. I got approved for my loans at a not-terrible interest rate only because my grandmother co-signed for me. The loan was denied with my parents as cosigners, and I wasn't asking for like 20k a year or anything. I imagine there's probably lots of people in similar situations as me, minus the well-off grandparents. If I didn't have my grandparents and couldn't get approved for a loan, I would've been screwed and unable to go to college. Never mind that I was salutatorian and scored very well on the ACT, or that I'm studying mechanical engineering and would definitely be able to pay those loans back just fine. I would've been denied a chance to get the education I'm getting now, and probably wouldn't have a college degree at all, just like my parents. Money already gives you a hell of a head start in the world, but deny those loans and you get a class system with almost no social mobility.


Now does Monopoly have a square where automated machines and AI take over all the other jobs?-If so, is there a nuclear option in Monoply?


The bar graph is fine, but the line graph is misleading. The vertical axis starts at 26%. In some cases, I agree that starting at 0 makes a line graph unreadable, since you can't make out the detail. But in this case it should still be clearly readable and the details aren't that important, just that it is declining. I'd like a graph to show me *how fast* it is declining, and this graph doesn't do that.


I want to quickly point out that there's an issue with the bar as well. It points to total student loan debt, which will increase with the amount of students, and we're looking at percentage home ownership which you would not necessarily expect to increase with student population. The bar graph should show average student loan debt for a proper comparison.


How to make graphs fit your agenda 101.


> "Don't ever trust statistics that you haven't falsified yourself " - Winston Churchill disclaimer: German proverb that is credited to winston churchill but unclear where it originated


It should also show a time period prior to the student debt bubble--i.e. home ownership for under-30 demographics in 1975.


Also it should show student loan debt for only those under 30 to properly compare the two numbers.


[Déjà vu.](https://np.reddit.com/r/dataisbeautiful/comments/5dt39y/comment/da73r7h?st=IWL0KZXO&sh=f10bff92) From an analytical perspective, it's always refreshing to see people question validity on here instead of blindly accepting "facts" at face value. Repost or not.


I think that this is really important, because the student loan debt went up by 4x, while home ownership dropped by what looks like 10-20% (relative). I'm sure there is a relationship, but not a terribly strong one.


Can someone provide a corrected graph? It'd be interesting to see that.


I agree this is important. It's easy to have the scale start at 0, they did it for one graph, why not the other?


Because it makes their point look better if it starts at 26%


Honestly, before I even looked at it I knew that would be the case. You don't get to the front page by posting data that *isnt* misleading. It's all about shock value. Shouldn't this sub have rules requiring visualizations to not be misleading?


It's why dual chart graphs are almost always a bad idea. For example ggplot in R (a very popular visualization method) intentionally doesn't do that because the makers don't believe it is a good way to present data


My wife and I tried to get approved for a house, we have good credit. They said the debt/income ratio was too high. Now I pay double the price I would for a mortgage in rent.


What was your debt to income?


Another reason for millennial home ownership decline is due to companies only hiring contract work. I work in the tech field and am on contract for 1 year. How am I suppose to buy a house when I don't know where I'll be in a year. Most of the people who finish out their contact leave for a better paying contact in another city. It's impossible to buy a house when you don't know where you will be year after year.


Same goes for full-time jobs as well. All of the companies I've worked at fire people at-will for everything and anything. It's fucking depressing. Not to mention regular lay-offs to send jobs overseas.


My mortgage and taxes are about 1500$ a month plus all my utility bills I pay about 1900-2000$ a month for my 3 bed 2 bath home on a fairly small lot near the city. Started at 1300$ a month and taxes keep going up. Takes a whole paycheck now. I am barley ahead on what I owe vs what it's worth and I think of selling to find something cheaper all the time. My gf makes half what I do and only contributes a fee hundred each month after her student loans, car payment, and her insane medical bills as she has shit insurance. I think about how my parents paid next to nothing for their house growing up. This generation was setup to fail... And it's awful to look around at People I went to school with and think. These are some talented smart people who can't catch a fucking break. Edit: out of place word


Now let's look at this from an economic perspective. You don't really have the money to spend on other luxuries or entertainment. You cling to your savings for fear of the unknown, so you're not really contributing to the economic growth of the country. There are probably millions of others just like you, or in a worse position. Without economic growth comes decline in the stock market. With that as a result, all the baby boomers who have savings invested in the market won't see growth that they may expect to happen in order to maintain retirement. They don't realize they're just as fucked as the younger crowd... except the younger crowd can still work and survive. Good luck surviving on social security, especially as limited employment means limited contribution to social security. Once again, greed screws everyone over... except for the rich...




He likely meant *without*.


As a 28 y/o who doesn't have any student debt and owns a home, I feel very fortunate, but it's a scary market out there. My wife and I bought just before prices really started to take off in our area. Friends who are looking to buy today, 4 years later, are shit out of luck. Prices are just too high. And we have a mortgage that's almost 3 times our combined annual income, and houses are going for 50% more now than what they were. That's probably the part that disturbs me the most.


I'm in the same boat. When my wife and I were looking for a home, we wanted to keep the price below 3x our combined income. We looked at houses in that price range and they were in high-crime areas, 1960-70s construction, and smaller than 1200 sqft/.15 acre. One of the most aggrivating things is seeing the house my parents started in sell for $260k when they bought it for $70k in 1985, is bigger and nicer than any home I could hope to afford. Sorry for the rant, it's a bit frustrating.




If you don't mind me asking, what is your monthly mortgage payment


I find it extremely difficult to own a home when all of the homes in the area I work cost $300k+. Even condos cost $200k to own. I saw an offer for a *Mobile* home for $105k the other day. These expectations are impossible if you want to live alone and not start a family. I make above the median wage. I cannot compete with a family with 2 or more incomes.


I think starting a family would make it worse, kids are expensive.


Replace family with DINKs (dual-income no kids) which are also on the rise since...as you pointed out...kids are expensive.


My SO's sister and her husband are both not only DINK's, but they got to live for 2.5 years totally rent and almost totally bill free. They have top end gadgets, several pets, saved for a big fancy wedding and just bought their first house a few months ago. I promise I'm not jealous >_>


This is part of the reason why gay couples are considered 'gentrifying' forces in up and coming areas. You have two individuals generally with no children who can just pump money into buying and renovating property. As a gay man I can't wait to get my gaycheck soon so I can start revamping a town house!


But many of those families with 2 incomes are also combining both debts - so they aren't much better off. Add in kids and helping elderly parents and it's a mess.


Single childless people saying they're worse off financially than 2 parent 2 income families supporting children is laughable. Children are a considerable drain on finances because they cannot be left alone when they're young. The 2nd parent either has to give up their income or dramatically reduce their working hours in order to care for the children or the family has to purchase daycare, which is expensive and often negates the 2nd income. This happens on top of having more expensive healthcare, food, housing, transportation, and household bills. And on top of that, yes, both parents probably have double the student debt.


For just a (very) brief moment I felt thankful for being single and un-fuckable after reading that. It went away, but it was a nice little moment.


I hear OP's mom would fuck ya.


Yep - 2 kids runs us 2.1K after taxes each month. Basically my wife works 35+ hours a week and only takes home like $800 a month once you factor in taxes and childcare. It kills me that she has to work all week for basically $200. Whats 1 item that costs us that $200 a week? Our student loans


> all of the homes in the area I work cost $300k+ Add $1 million to that figure [for detached homes in Toronto](http://www.macleans.ca/news/toronto-house-prices-soar-september-2016/). Home ownership doesn't make sense with housing prices inflated as they are. Commuting doesn't make sense either, with housing prices almost as inflated in the suburbs and when you factor in the [true cost of commuting](http://www.mrmoneymustache.com/2011/10/06/the-true-cost-of-commuting/). Renting is being financially responsible given current market conditions.


Don't forget your $500/month HOA fee 😀


I was looking at the rent-buy equation for where I am now. The property tax and HOA fees are enough that renting and investing the difference definitely looks like a winning proposition if I'm not going to stick around in the city for more than ~5 years. Since my plan is to move on in a couple years, rent it is.


99.99% of the time that'll be the case. Owning only makes sense when you factor in 5+ years of equity. Mortgages have the interest front loaded so the first few years you aren't even paying your balance down.


What matters more is the transaction cost of working with a realtor. Decide to move? Boom, there goes 6% of your home's selling price.


God I wish homes were as cheap as $300k around me. Can't get anything livable and close to the city for less than $400k. And even at $400k you're looking at 1000sqft. Need more room? Better tack on another $100k.


As a guy with a master's degree and buttloads of experience in my field, I've been unable to find full-time work since graduation in June. It fucking sucks, mostly waiting for the previous generation to die off.


Just keep going back for more school http://www.npr.org/blogs/health/2014/09/16/343539024/too-few-university-jobs-for-americas-young-scientists


I feel your pain man. Despite having a 4 year degree and a Masters it took me about 10 months to find a job after graduation, because I was applying for jobs I knew I was qualified for despite not meeting the 3 year experience requirement. I eventually took a job making 10/hr, worked that for 5 months and got a new job making significantly more, and now after having worked that job for 6 months I am taking on a new job making about 33% more than my current job and reducing my rent by about 700 a month. Sometimes it takes time, but with a masters and lots of experience I know you can get there. If you are having trouble getting interviews, try reaching out to recruiters/agencies in your field. They can really help you get your foot in the door quick and jump start things.


My massive amounts of student debt were the only reason I was able to buy a home, actually. During my five years of college, the repayment was deferred and marked as "paid" every month, so by the time I graduated at 22, I had a damn good credit score, got a terrible job at a factory for $10/hour, and with $4,000 saved, was approved for an FHA mortgage within six months (before the repayment period started). Then, I bought the home and rented out three of the bedrooms to friends, which covered the cost of the mortgage, the monthly repayments on my student loans, and then some. Now four years later, I've accrued enough equity to be able to pay back all of my student loans. Still, fuck student loans. It's been four stressful years of living on a financial cliff, and I lucked out every bit of the way.


You were very fortunate for having friends who are good renters and whatnot. I had a friend who did the same. He's on his third house. He works for health benefits, spare money and to keep himself busy, but most of his income comes from renting his multi-bedroom houses to people he trusts, at a very competitive rate. It keeps him financially stable, pays his mortgage, and it also keeps his friends in good financial health since they get rent for so cheap in comparison to everywhere else.


Federal loan reform must be part of the long term solution. Currently approval is based on need. Applicant and school merit, as well as the long term fiscal viability of the applicant's choices need to somehow be part of the equation.


I think universities should be tuition-free, but they get around 7.5% of a graduate's pretax income for ten years, automatically withheld. Make it the higher education system's problem that most of the degrees they peddle are worthless.


It's a very dangerous idea to implement that _only_ degrees which lead to high paying careers are useful. Society can't persist on engineering disciplines alone, nor is the pressure for everyone to go into high paying jobs necessarily a good one. Yes, we could try and get the whole workforce aiming for an $150k starting salary at some bay area startup, but we don't want to *discourage* people from having priorities other than money, and we don't want to discourage universities from offering courses which aren't right here and now's big thing. Nobody knows what the future will hold, and a society built entirely out of today's needs is a brittle one indeed.


The availability of student loans combined with hiring credentialism has let universities raise costs far faster than the rate of inflation. In the 30's, prior to the days when the government "helped", a college student could earn enough money during summer break to fund themselves through a school year. My father-in-law paid his own way through Berkeley and a few members of the Washington Crew team that went to Berlin in 1936 did the same.


What kind of job did your father-in-law have during summer break in order to fund his tuition and living expenses (room and board, food, accessories)? I don't doubt that he was able to do that, but it's not just the cost of tuition that's a burden these days. The average part time job for a college student pays roughly $10 per hour. Let's say 40 hours a week for three months (summer), and we get a little under $5k. Subtract taxes and that's probably closer to $4k. There is no way anyone can independently survive for nine months on $4,000 in the US, and that's without considering school costs. Even double that (work 80 hours a week) and it's still a major stretch, though impossible if you have to pay tuition. You may say, "get a better paying job" but we can all agree no one wants to hire a college kid at more than $10/hr only to have them leave in three months. Tuition is high, I agree, but the cost of living in the US is also rather high these days and income levels are comparatively low. Your father-in-law grew up in a very lucky time. Millennials didn't.


There are also way more people going to college now too. If the loan availability was not there, the costs would not have been so inflated. Tuitions for some of these classes should be 33 percent of what they are now.


http://fivethirtyeight.com/features/fancy-dorms-arent-the-main-reason-tuition-is-skyrocketing/ Drops in state funding are the main culprit


I think this post will have Reddit in a bit of a brain-cramp, given enough time, as it's caught between two popular circle-jerks...let me explain. The r/personalfinance angle: maybe home ownership isn't or shouldn't be the goal, as there are so many additional costs and headaches with or ownership. As high as prices are, mortgage payments will often be more than rent payments, but the increase in home price over 5-7 years won't validate looking at a home as an "investment" Also, the problem is jobs, all the millennials are going to college and getting saddled with debt instead of pursuing a trade, which begets... The r/futurology angle: maybe the problem *is* college and tuition and low-paying jobs, and maybe the solution is jobs that don't require a degree, but many of these well-paying jobs aren't jobs with much security going forward. These jobs that are slated for replacement by technology, as is currently being seen in the manufacturing sector It's a real crisis: we are at a point where a majority of the young citizens won't have earning power to sustain the economy or participate in its success...similar to the 1920s There's a reason Trump and Bernie were so popular; their messages spoke to the economic realities many Americans are facing, or at least feel they are facing


I like your little summary


You forgot the r/financialindependence angle: you should live in the cheapest apartment you can find and bike to work so you don't spend any money outside what is necessary to make money. or the /r/tinder angle: Netflix and chill?


My advice, go to an affordable school. Unless it's Ivy League or top tier, no employers give a shit.


Went to a state school and I'm still graduating 30K in debt. If your family isn't dirt poor then you don't get many grants from financial aid, you get offered a fuckton of subsidized and unsubsidized loans though!


Obviously hard to graduate with no debt, but 30k is a lot better than 50,60,100k for the same degree at a different school. I paid 9k a year and paid some as I worked through college.


I paid some as I worked through college as well. The only jobs available to me (because of schedule, transport) were around minwage. It just doesn't seem worth your time to work minwage. At the time it was like 7-8$ an hour, fucking slave wages in a first world country.


In-state schools can be expensive depending on how fucked you are and what state your parents raised you


The tuition bubble is going to burst. The time is ripe for technology to seriously disrupt higher education.


May I offer a bleaker outlook: The tuition "bubble" is *not* going to bust. You either go to college, or you don't get a good job. There's no other options. They could charge literally 10x more and people would still go. There's nothing to "bust" the bubble because there are no real alternative options. Yes, there's trades, but eh, nobody goes into those anymore. The reason bubbles "pop" is because people finally say, "you know what, we really don't need *thing*" and then it stabilizes. College is like buying food, you need it, you don't have a choice. It's not optional like the housing market. The reason tuition is so high is because the federal government enables the behavior. If they stopped giving out loans and grants like candy, people wouldn't be able to afford tuition, and colleges would lower it. As long as the government enables it, tuition will go up. It's not all doom and gloom though, lots of state schools will let you go for free if you score above a certain threshhold on the ACT/SAT test. You don't need Harvard, for example you can go to cleveland state for free if you get a 27 on the ACT I believe.


> The reason tuition is so high is because the federal government enables the behavior. If they stopped giving out loans and grants like candy, people wouldn't be able to afford tuition, and colleges would lower it. As long as the government enables it, tuition will go up. Ding ding ding! The federal government gives people unlimited money through loans. Then, colleges see that people have unlimited money, and start charging unlimited amounts. In the old days, before student loans were commonplace, there were lots of schools that most people couldn't afford. So, they went to cheaper schools. Those expensive schools saw their numbers falling, and lowered their tuition. This will continue until the government stops giving essentially unlimited loans out. Sure, there'll be a shock when the first limit them, with tons of people not being able to go to 90% of colleges, but colleges need students to stay in business, so they'll lower their prices until they start getting *some* money vs none.


It's similar to the medical industry. It's not a truly free market because it's essentially a government granted monopoly enabled by federal loans. When both industries get empowered by essentially endless money, there's nothing to stop them from raising their prices


The issue that people forgot is state funding went down and students picked up the tab with federal loans. Administrators make too much money but it isn't like colleges are rolling in their profits or paying professors.


Everybody told me I was making the wrong choice when I dropped out of college after 2 years and took up a trade. I dont know many people in my class who have found jobs in their field after graduation. Combined with ~80k in debt and little to no savings from being in school sounds like a nightmare compared to my situation


One of the interesting things I heard Mark Blyth say was that the high inflation of the 1970's basically "paid off" the mortgages of people who were able to buy a house before that time. High inflation is good for debtors, because the inflation basically eats away at your loans. You end up paying more for everyday things too, which if incomes keep up with inflation (as they did in the 1970's) is not so bad. What's happened more recently is that since the 1980's there's been an all-out "war" on inflation. Inflation is "managed" by the Federal Reserve to be no more than 2% a year, which hurts debtors (and savers). It helps creditors though! And this happened coincident with two other things: 1.) The astronomical increase in educational costs, saddling your highest potential earners with crippling student loan debt, and 2.) The housing bubble. In fact, the low inflation might have helped cause the housing bubble. With low inflation, your savings don't accrue any interest. But if housing prices are rising by 10% a year, it's a no-brainer to "invest" in a house and flip it. Even without flipping it, you get a much higher returns over time than any saving account in a low-interest world. As everyone seeks higher returns in the real-estate market due to low rates on saving accounts, it drives the bubble. And that prices people out. It also has knock-on effects (higher rents, etc.) And to top it all off, the above happened at the same time as wages stagnated and no longer kept up with productivity growth, as indeed they also haven't since the 1970's. This was due to the rollout of Neoliberalism under Ronald Reagan, which was predicated upon "disciplining" labor through various means (gutting unions, globalism, outsourcing, offshoring, mass immigration, H1-B's, automation, monopolies, etc.) End result = an entire generation priced out of the housing market, and unable to accrue the savings to buy in. Don't worry, though, the 1% creditors will be happy to buy up all that extra housing sock and rent it back to us at inflated prices!


Student debt is the 21st century model of sharecropping and company towns. I read an article a while back saying that most students won't be clearing their student debt until they are like 38 years old. That's a big chunk of time making a paycheck for someone else.


I think people forget the massive amount of lifetime loss of wealth that occurs due to loans. Paying that much that early on in the career that drastic effects of hundreds of thousands of dollars even for typical debt load Lifetime loss of wealth http://www.demos.org/what-cost-how-student-debt-reduces-lifetime-wealth http://time.com/money/4132097/student-loans-ruin-life/ http://www.upi.com/Top_News/US/2015/10/24/Report-Recent-college-grads-wont-retire-until-age-75/8801445707656/


It's almost like having student debt inhibits your ability to own homes or something. Like there's only a finite pool of dollars and things have to get prioritized. /s




Am I reading this chart wrong or is it backwards? It looks like the chart shows debt going down and ownership going up as you move from 2005 to 2015.


You're reading it wrong I think.


I'd say the more important point than student debt is the "lack of affordable housing bit". And I don't think that's a really solvable problem either. If you want single family detached housing, that takes up a lot of space, and with cities getting bigger, and people not willing to commute two hours to work. There's limited supply, and no easy way to change that. Things like condos and high rises will stem the tide, but even those are quite expensive to make.


"Why don't mellennials just decide to buy more homes? Don't they realize it will help the economy and since that is what I did it is the best decision for everyone." -some old person


Does this have anything to do with where people want to live and buy houses vs actually not being able to buy a house? I recently moved to the states and im not making a lot but im able to pay rent while having enough to take care of other stuff.


Forgot to mention a few more items like: later marriage, lower paying jobs, higher spending on stupid gadgets.


Plot this against age of retirement for boomers, life expectancy, and migration to major cities. Student debt is one factor of many. /family with no debt and no house...


Two out of control markets. Put them together and it is like being asked to chose between dying of prostate cancer or lung cancer. The government should make tuition price caps part of student loans the way they do with medical services. "Okay, we will loan your students money to attend, but those students getting government loans cannot be charged more than $X/credit hour. Don't like it, no loans for your school. Ask Devry how that is working out for them."


Good thing I was a C student in high school. Looks like my own lack of ambition saved my life.


Soon the government will have a new initiative to grow home ownership by helping millennials get loans. aaaaaaand it's 2008 all over again.


The sad thing is the only people that care are the ones in debt who won't own a home for the next 10-20 years. Our eduction system taught me the most important lesson: the government doesn't give a fuck about you or your loans.