Our system is failing, and it’s time we acknowledge that. The fact that close to half of our young adults are forced to live with their parents is testament to the major crisis we face. While it’s true that some young people may be lazy and lack motivation, the majority of them actually desire to have their own homes. However, the skyrocketing home prices in America have made homeownership more unaffordable than ever before.
It’s heartbreaking to see millions of young people struggling under the weight of student loan debt, while facing an extremely suffocating cost of living. As a result, many are left with no choice but to move back in with their parents. In fact, nearly half of all young adults in America find themselves in this situation, the highest since the aftermath of the Great Depression.
There are several factors contributing to this crisis, with high interest rates being one of the primary culprits. Currently, the average rate on a 30-year fixed mortgage has reached an astounding 7.19 percent. This has resulted in cooling housing demand and a decline in construction levels. Furthermore, NAR chief economist Lawrence Yun warns that mortgage rates may even go up to 8 percent in the near future, adding more pressure to an already dire situation.
The exorbitant mortgage payments seen today are simply unaffordable for the vast majority of the population. This reality is sidelining millions of potential buyers and sellers, as people cannot afford to move due to the high costs involved. Consequently, home sales have plummeted to levels not seen since 2011, with Fannie Mae predicting the worst year for home sales in over a decade.
Renting, once seen as an alternative, has become equally unaffordable. The national median asking rent in the U.S. has risen to over $2,000 a month, pricing out many young adults who cannot bear such high costs. This makes it even more difficult for them to find affordable housing options.
Unfortunately, there doesn’t seem to be much relief in sight for our young people. The Federal Reserve has no plans to cut interest rates, and it will take a significant decline in housing prices for affordability to improve. This leaves young adults and their parents in a tough spot, as economic conditions continue to worsen.
In light of these circumstances, it’s important for parents to be patient with their young adult children who may be living at home. The challenges they face are beyond their control, and the harsh economic realities are affecting everyone. As a society, we need to recognize the urgency of addressing this crisis and work towards creating a more affordable and accessible housing market for all.