[Sosa]

Almost 40% of Young Americans (Aged 18-34) are now living with their parents, siblings, or other relatives.

Related article at Money Magazine

Quote:

Almost 40% of young Americans were living with their parents, siblings or other relatives in 2015, the largest percentage since 1940, according to an analysis of census data by real estate tracker Trulia.

Despite a rebounding economy and recent job growth, the share of those between the ages of 18 and 34 doubling up with parents or other family members has been rising since 2005. Back then, before the start of the last recession, roughly one out of three were living with family.

The trend runs counter to that of previous economic cycles, when after a recession-related spike, the number of younger Americans living with relatives declined as the economy improved.

The result is that there is far less demand for housing than would be expected for the millennial generation, now the largest in U.S. history. The number of adults under age 30 has increased by 5 million over the last decade, but the number of households for that age group grew by just 200,000 over the same period, according to the Harvard Joint Center for Housing Studies.

There is something very emasculating about being forced to live with your parents as a grown man. It's hard to get the Poosy when you live with your mom.

   

[John Michael Kane]

The article is incorrect in stating the economy has rebounded. Overwhelmingly the jobs that have been created have been part-time or gig jobs. They aren't real 9-5, good salary jobs. In many parts of the country, rent is way out of line with concerns to wages.

This article on the Onion highlights what young Americans are going through in a joking manner:

http://www.theonion.com/article/apartmen...-spe-53778

Quote:

Apartment Broker Recommends Brooklyn Residents Spend No More Than 150% Of Income On Rent

BROOKLYN, NY—Urging apartment hunters to keep their search within reasonable bounds and avoid excessively high leases, real estate broker Katherine Rivera recommend Friday that Brooklyn residents spend no more than 150 percent of their income on rent. “When you’re looking for a new place in Brooklyn, limiting yourself to a budget of one and a half times your monthly pay is always a good rule of thumb,” said Rivera, who noted that residents willing to live with multiple roommates or in a less desirable neighborhood might be able to allocate as little as 125 percent of their income to rent. “Anywhere from 140 percent to 175 percent of your paycheck is considered a healthy range to set aside for housing in Brooklyn. Some people can stretch it to double or even triple their salary, but we don’t suggest going that high, because spending more than 150 percent of your total earnings on an apartment can really impact the rest of your budget.” Rivera added that Brooklyn residents could help save extra money for rent by holding themselves to a strict spending limit of $4,500 when they go out on weekends.

In addition to many young folks living with their parents, there's also a lot of friends doubling or tripling up with roommates past college. I know one person in my social circle that bought a house and has 4 roommates. He said he couldn't have afforded the mortgage otherwise. The roommates are professionals. Engineers, software people, etc. Rent is crazy expensive here in California, and we aren't the only place.

[Suits]

(12-21-2016 08:03 PM)Sosa Wrote:  

Quote:

The trend runs counter to that of previous economic cycles, when after a recession-related spike, the number of younger Americans living with relatives declined as the economy improved.

Maybe the economy really hasn't jumped back at all.

[Excelsior]

I'm interested in the potential long-term impacts of this trend. As the article indicates, millenials have a difficult time affording homes and are much further away from realizing the "American dream" of home ownership their parents did. Even if they could afford homes, millennials generally have a lower preference for suburban settings than their parents, with many preferring instead to migrate to inner-cities (hence mass gentrification).

I wonder what is going to happen to all of this suburban housing stock that has been built en masse over the course of the last couple of decades (when it was the most desirable housing stock available). Most of it was purchased by boomers and some gen-xers, and the bulk of it is still held by them. Many boomers are gonna wanna be rid of it with their empty nests and impending retirement, though, and there aren't going to be many millennials willing or able to buy. Even if millenials are ready to buy a little more down the road, it is possible that fewer of them will be keen on the suburban mcmansions their parents owned - the demand for this kind of housing might decrease, and then you've got to wonder what happens to it considering how much of it we've built.

[Paracelsus]

(12-21-2016 10:03 PM)Excelsior Wrote:  

I'm interested in the potential long-term impacts of this trend. As the article indicates, millenials have a difficult time affording homes and are much further away from realizing the "American dream" of home ownership their parents did. Even if they could afford homes, millennials generally have a lower preference for suburban settings than their parents, with many preferring instead to migrate to inner-cities (hence mass gentrification).

I wonder what is going to happen to all of this suburban housing stock that has been built en masse over the course of the last couple of decades (when it was the most desirable housing stock available). Most of it was purchased by boomers and some gen-xers, and the bulk of it is still held by them. Many boomers are gonna wanna be rid of it with their empty nests and impending retirement, though, and there aren't going to be many millennials willing or able to buy. Even if millenials are ready to buy a little more down the road, it is possible that fewer of them will be keen on the suburban mcmansions their parents owned - the demand for this kind of housing might decrease, and then you've got to wonder what happens to it considering how much of it we've built.

Some random thoughts:

- Banks have a dog in this fight, and I think you'll see it come out soon. I don't know what percentage of retiring Baby Boomers have actually paid off their houses, but the 2008 crash dented a lot of retirement accounts and the economy hasn't jumped back into boom conditions to compensate for it. (Also see: collapsing municipal pension funds, as reported on by Zerohedge. That's the canary in the coalmine, guys, be careful about where your 401k is if you have it.)

Consequently you might see more ageing boomers taking out late mortgages on their houses to pay for retirement. Even if they are non-recourse mortgages (as I understand most US housing loans are) you would think banks are not going to want to pick up massive debts they can't recover from the sale of the house. It would not surprise me if the big banks start pushing hard for some sort of propping-up of the real estate sector if this problem is widespread.

- Supply and demand looms large and cannot ultimately be legislated or QE'd away. There are way too many old people and not enough taxpaying young people, especially as more immigrants flood the Mexican border. It would not surprise me to see the foreign investment rules loosened in this area -- Chinese money is still desperately running for the exits. But for all of this I think you will see a general dropping of house prices over the next 5-10 years. People have to retire. They have to go into nursing homes. The houses have to be sold, and they'll be sold for less.

(By the way, this is also yet another way the Baby Boomer generation screwed everyone else. They got their properties cheap, then borrowed against them on the perception of those properties being more valuable than they were, then left them to their kids for a pittance of their value.)

- On the other hand I think the millennial drive to live in the rat race might not be as strong as it first appears. You can find a good cappucino living in a small urban shitbox, but a good school with 2 hours, not so much. The desire for more space grows when you have kids. Millennial narcissism is going to be an important influence here: subtle cues aimed at shaming a millennial parent for letting the kids not grow up with the great outdoors could have potent effects, even if the millennial parent is utterly ignorant of what the fuck to do with a kid in the great outdoors.

[kmhour]

(12-21-2016 09:34 PM)Suits Wrote:  

Maybe the economy really hasn't jumped back at all.

[Paracelsus]

Also an interesting and interrelated article:

http://www.zerohedge.com/news/2016-12-21...udent-loan

Quote:

According to a new report from the Government Accountability Office, the federal government is increasingly garnishing Social Security benefits to help cover student loans payments owed by baby boomers. According the Wall Street Journal, a total of $1.1 billion has been garnished since 2001 with $171 million being collected in 2015 alone.

The government has collected about $1.1 billion from Social Security recipients of all ages to go toward unpaid student loans since 2001, including $171 million last year, the Government Accountability Office said Tuesday. Most affected recipients in fiscal year 2015—114,000—were age 50 or older and receiving disability benefits, with the typical borrower losing about $140 a month. About 38,000 were above age 64.

The report highlights the sharp growth in baby boomers entering retirement with student debt, most of it borrowed years ago to cover their own educations but some used to pay for their children’s schooling. Overall, about seven million Americans age 50 and older owed about $205 billion in federal student debt last year. About 1 in 3 were in default, raising the likelihood that garnishments will increase as more boomers retire.

“I believe this is the tip of the iceberg of what may be to come if we don’t work harder on this problem,” said Sen. Claire McCaskill of Missouri, the top Democrat on the Senate Special Committee on Aging.



Of course, the mere suggestion that people should be responsible for repaying debt they've incurred was enough to throw Elizabeth Warren into a tailspin as she described the idea of garnishing social security benefits as "predatory."

The report showed garnishments left thousands with Social Security checks below the poverty line, prompting Sen. Elizabeth Warren (D., Mass.) to call the practice “predatory.” Both lawmakers said they will push legislation to ban it.

But consumer advocates and some congressional Democrats say the government’s tactics have become too aggressive, targeting many borrowers who are destitute and have no hope of repaying. Most Social Security recipients rely on their checks as their primary source of income, other research shows.

Meanwhile, the WSJ points out that Obama's "income-driven repayment" (IDR) plans only serve to make the student loan problem worse. Since the payment plans only cover a portion of monthly interest payments, debt balances continue to grow over time leaving borrowers with even larger debt balances as they reach retirement age.

Daniel Pianko, a managing director of University Ventures, which invests in for-profit and nonprofit schools, says the government may be worsening the troubles of older borrowers by promoting programs that set monthly payments as a share of borrowers’ earnings. Payments under “income-driven repayment” programs frequently cover only part of the interest and not the principal, allowing balances to grow.

In that sense, the income-driven repayment programs have the same effect as payday lenders, trapping poor borrowers in a growing amount of debt.

“Every month and every year the loan balances go up, which means by definition this problem will only get worse,” Mr. Pianko said.
We just wrote about another Government Accountability Office report that blasted the Education Department's understanding of basic mathematics and accounting concepts after finding the department drastically underestimated the costs of Obama's student loan forgiveness programs. The 100-page report entitled "Federal Student Loans: Education Needs to Improve Its Income Driven Repayment Plan Budget Estimates" found that taxpayers could be on the hook for $137BN of student loans to be forgiven over the coming years as a result of Obama's executive actions on IDR plans.

This just boggles my mind. You normally think of the student loan crisis as a Gen X or millennial thing. The idea that a fucking Baby Boomer, gifted with possibly the most favourable economic headwinds and advantages in history, cannot even pay off their student loans from when they went through in the 1960s or so, is just inconceivable to me.

[kmhour]

(12-21-2016 10:37 PM)Paracelsus Wrote:  

The idea that a fucking Baby Boomer, gifted with possibly the most favourable economic headwinds and advantages in history, cannot even pay off their student loans from when they went through in the 1960s or so, is just inconceivable to me.

I think you're only touching the tip of the iceberg there. If the boomers - with a vastly more advantageous set of circumstances - are facing these issues, what will the reality be in 5 years? 10? 20?

I don't say this wringing my hands for kids taking out student loans for wildly poor investments (i.e. college degrees that show awful ROI) but the educational debt bubble is completely unsustainable and will have an absolute impact when it bursts.

Millennials have moved back home in record numbers in part because their thought process is a product of the housing crisis. What will happen to the children who're a product of the education crisis?

[John Michael Kane]

Quote:

This just boggles my mind. You normally think of the student loan crisis as a Gen X or millennial thing. The idea that a fucking Baby Boomer, gifted with possibly the most favourable economic headwinds and advantages in history, cannot even pay off their student loans from when they went through in the 1960s or so, is just inconceivable to me.

Think about how spoiled the Baby Boomers are. They have always lived beyond their means in every area of their lives. It should come as no surprise that debt is part and parcel of who they are.

[la bodhisattva]

It's certainly no thorough study on today's economy and job market versus the past, but my uncle graduated from high school in coalfields of West Virginia in 1970, got a job running some type of machinery on the surface of the mine, bought at home that I'd guess to be about 2500 sq ft on about 8 acres of land, and had the most seductive Chevelle all before he was 23. Imagine having that opportunity as a blue-collar before the age of 40 today.

A semester of STEM books today costs more than a semester of tuition did just thirty years ago. I mean fuck, just think, work part time as a lifeguard or mule for a mason or carpenter and be able to pay for your entire tuition. Higher education, subsidized by the government has severely fucked over America's young people.

[IveBeenFramed]

(12-21-2016 10:37 PM)Paracelsus Wrote:  

Also an interesting and interrelated article:

http://www.zerohedge.com/news/2016-12-21...udent-loan

This just boggles my mind. You normally think of the student loan crisis as a Gen X or millennial thing. The idea that a fucking Baby Boomer, gifted with possibly the most favourable economic headwinds and advantages in history, cannot even pay off their student loans from when they went through in the 1960s or so, is just inconceivable to me.

I don't think these are loans from the 60s and 70s. College was very affordable then and you could work through it. I think the boomers got caught up in the education bubble "needing" advanced degrees to get ahead in the workplace, in addition to those of the boomer age who "had to go to college" to "finally get that degree." Just like the millenials, gen-x, and the like got caught up in the education bubble because they were told you had to go to college to be someone.

[Aleventure]

The Millennials were led to believe college guaranteed them a future, the generation of their parents, the media, government, and universities pushed this. So they signed up for college taking tens of thousands of dollars in student loans getting average grades in a run in the mill business or humanities degree thinking they will get some salaried job in a field they have interest in that pays at least 40-50k a year to start out. Only to find out that the degree only really guarantees them a hourly $12 customer service/inside sales job right out of college and they are struggling to make ends meet so they live at home to pay off debt and save some cash. This is the lie that has led to this problem. If you did college right such as getting an applicable degree, respectable GPA, internships, networking you will probably find that salaried job right out of college, but most didn't.

[polar]

(12-22-2016 12:41 AM)Aleventure Wrote:  

The Millennials were led to believe college guaranteed them a future, the generation of their parents, the media, government, and universities pushed this. So they signed up for college taking tens of thousands of dollars in student loans getting average grades in a run in the mill business or humanities degree thinking they will get some salaried job in a field they have interest in that pays at least 40-50k a year to start out. Only to find out that the degree only really guarantees them a hourly $12 customer service/inside sales job right out of college and they are struggling to make ends meet so they live at home to pay off debt and save some cash. This is the lie that has led to this problem. If you did college right such as getting an applicable degree, respectable GPA, internships, networking you will probably find that salaried job right out of college, but most didn't.

A number of boomers found themselves unemployed. They started going to school for a new degree, but the jobs on the other side did not pan out. They were stuck with loans and no steady income...so, to delay repayment of principal they can keep taking classes. The interest snowballs, but principal is delayed until they're out of school.

They aged out of the job market and are stuck with more (non-dischargeable!) debt than they can repay.

[puckerman]

It also has something to do with more and more younger people flocking to cities which are getting more and more expensive. The ones who stay in small towns aren't going through this.

Here in Austin, you can find a lot of people in their 30's and even their 40's living like college students. There are four and five people all in house.

[Samseau]

This is because when the 08 bubble popped, everyone thought, "I'll just ride out the recession by going to school for a few years. Then I'll come out with a new degree ready to ride the rebound in the economy."

Instead the rebound never came and the entire country is fucked.

Most schools should be shut down, top administrators must give back most of the money they've made, federally guaranteed loans must be stopped, and lawmakers who pushed for such laws must be held to the highest disgrace both presently and for future history books.

[Putin Closes]

Considering this pales to the Asia, where most kids live with their parents until they get married, I'd say America is still doing relatively well.

[Paracelsus]

(12-22-2016 03:42 AM)Putin Closes Wrote:  

Considering this pales to the Asia, where most kids live with their parents until they get married, I'd say America is still doing relatively well.

Kids who live with their parents until they get married in Asia seem to be living with them out of culture and regard for family rather than economic desperation. I wouldn't call the US as doing relatively well if that's the situation.

[Putin Closes]

(12-22-2016 03:45 AM)Paracelsus Wrote:  

(12-22-2016 03:42 AM)Putin Closes Wrote:  

Considering this pales to the Asia, where most kids live with their parents until they get married, I'd say America is still doing relatively well.

Kids who live with their parents until they get married in Asia seem to be living with them out of culture and regard for family rather than economic desperation. I wouldn't call the US as doing relatively well if that's the situation.

If you look at the average white collar salaries across the board in Asia, you'll find that they could barely cover rent, let alone afford to buy their own food.

Look at Hong Kong Rent vs the average LOCAL white collar salary. Salaries in Hong kong have fallen 20% in 20 years. No I think America is doing quite fine compared to the rest of the world.

http://www.scmp.com/news/hong-kong/econo...-cent-last

[jackal62]

(12-21-2016 10:03 PM)Excelsior Wrote:  

I'm interested in the potential long-term impacts of this trend. As the article indicates, millenials have a difficult time affording homes and are much further away from realizing the "American dream" of home ownership their parents did. Even if they could afford homes, millennials generally have a lower preference for suburban settings than their parents, with many preferring instead to migrate to inner-cities (hence mass gentrification).

I wonder what is going to happen to all of this suburban housing stock that has been built en masse over the course of the last couple of decades (when it was the most desirable housing stock available). Most of it was purchased by boomers and some gen-xers, and the bulk of it is still held by them. Many boomers are gonna wanna be rid of it with their empty nests and impending retirement, though, and there aren't going to be many millennials willing or able to buy. Even if millenials are ready to buy a little more down the road, it is possible that fewer of them will be keen on the suburban mcmansions their parents owned - the demand for this kind of housing might decrease, and then you've got to wonder what happens to it considering how much of it we've built.

Foreigners with money to burn will buy the vacant suburban houses. Some will live full time in these houses, others will rent them out.

[rockoman]

I want to underline 'Putin Closes'' point. Americans are still doing very well compared to Asians, Africans and Latin Americans. The fact is that it has been the norm throughout history at all times and in all cultures for young people to live with their parents until they marry - for economic and cultural reasons.. I'm not saying it is good or bad, just observing reality.

Nobody on earth is entitled to anything. Many Americans - and Europeans - made bad choices, paying large amounts of money to get pieces of paper certifying their excellence in Bullshit Studies. We all have to live with the consequences of the decisions we make. That's one reason it's a good idea to think rationally for yourself.

[Kid Twist]

So the question arises, just like the US National Debt ... when does it matter?

I used to think something had to give in the whole "student debt" story. Then I thought more; it's just another control that the gov't or an institution will have on you. Greater disparity between the haves and have nots, ultimately.

No?

[Dr. Howard]

(12-22-2016 04:08 PM)Kid Twist Wrote:  

So the question arises, just like the US National Debt ... when does it matter?

I used to think something had to give in the whole "student debt" story. Then I thought more; it's just another control that the gov't or an institution will have on you. Greater disparity between the haves and have nots, ultimately.

No?

I hope it means 'austerity' by means of scrapping social security for anyone under 40, getting rid of EITC and food stamps and deporting illegals to create economic opportunity for those on the bottom who are currently on these social programs which pay better than working itself.

I love this thread, its a glorified 'time to be a grown up!' punch in the balls for millenials and divorced, old, eat pray love women.

For those whiny cunts who say "I dont' have a job" I bet they are not out there standing in the home depot parking lot with the mexican day laborers. Its not "I don't have a job" its "I dont' have a job that I want, and I refuse to work until i do"

Remember the great depression and those people that packed up and migrated to work in western cotton fields? They moved from a place with no job, to a place with a shit job. Urban millenials are pussies, so removed from their physical environment that the idea of being on a landscaping crew, logging crew, farm, orchard, roofing crew or plant nursery terrifies them more than jail.

Also, last time I checked, the armed forces aren't turning people away, and I bet recruiters would rather have a limp wristed neckbeard than a transgender sexual harassment timebomb anyday.

[DevilsMoJo]

Dr Howard, venting his anger on those at the bottom instead of those at the top like Soros who made his money off dead bodies or Paris Hilton who illustrates nepotism or film/TV actors who get paid millions while actual hard workers get paid fuck all

"If they would rather die then let them die and decrease the surplus population"

[HermeticAlly]

I think many millennials will get over their love of the city. The only reason I don't live much farther from Atlanta is that I don't want to deal with the traffic. Suburban areas and smaller towns seem dumb when you're a teenager, but it makes much more sense when you're contemplating raising a family.

Home ownership seems ridiculous in the current market. Nobody I know can afford to put a down payment on a home. The area where my parents live is nice and has some smaller homes that seem like they'd be great for young families, but all the local construction is for giant, salmon-pink brick McMansions. Who the hell are they building these for? Baby boomers with white BMWs are getting much older and nobody younger makes the kind of money to buy these places. It's ridiculous.

[Samseau]

(12-22-2016 09:59 PM)HermeticAlly Wrote:  

Home ownership seems ridiculous in the current market. Nobody I know can afford to put a down payment on a home.

The only ones of my friends with homes had their parents help them make a down payment.

Then their kids only had to pay the easy to make mortgage, due to such low interest rates.

Quote:

The area where my parents live is nice and has some smaller homes that seem like they'd be great for young families, but all the local construction is for giant, salmon-pink brick McMansions. Who the hell are they building these for? Baby boomers with white BMWs are getting much older and nobody younger makes the kind of money to buy these places. It's ridiculous.

It's just a bubble. Soon prices will crash when not enough people are buying.