Ok but let’s stop blaming people for buying places to live and recognize that a larger problem is corporations buying properties by the dozens and using them as sky-high rentals or just a place to park money.
No corporation should be able to own housing. Corporations aren’t people.
I’m okay with blaming nepotism. I also want to point out the other problem is the vast majority of new housing builds in cities is entirely luxury condos. You can’t fix a supply and demand issue if you never address supply.
Calling that nepotism is a stretch imo. There is nothing wrong with borrowing money from your parents for a down payment just like there’s nothing wrong with your parents paying your tuition.
The problem you highlighted - luxury development - is a significantly bigger issue. And that’s less of an issue than corporate landlords.
Then there’s private rentals which I’d say is the biggest factor involving individuals (not companies)
But a 28 year old borrowing money from dad is a drop in the bucket. It feels unfair to me to place any blame on them at all
It highlights the fact that own housing is not affordable for many unless you have wealthy enough parents to cover the downpayment.
We do have supply issues, but it really isn’t “luxury” per se (ignoring that “luxury” is just a marketing term that means basically nothing).
However, there is a distinct lack of small-medium (800-1500 ft²) housing being built in most areas.
The two reasons housing is expensive:
- Lack of available supply (partly worsened by people and corporations abusing the housing market for profit).
- Average housing being way too large, in particular for first time home buyers. It costs money to build every square foot, to furnish it, and to maintain it.
The large portion of “increased costs” we see with housing over the last 50 years is basically just an increase in size (ignoring specific markets). Maybe 20 percent of the increase is for other reasons (one of which is the addition of 2+ car garages).
In cities, a lot of the new rental construction is “luxury” because it’s both the most profitable multi-unit housing project, and because it recovers its investment outlay decades earlier than a rental complex that intends to charge near or moderately above the average rent prices. There’s no market incentive for anyone to build affordable housing, unless the government subsidizes it, which is unsustainable and defeats the purpose of affordable housing in the first place.
They don’t have to worry about occupancy as long as there’s a housing shortage, so you’re stuck between living in decades old apartments that have questionable utilities and maintenance, or paying 2-5 times as much to live in an equivalently sized new apartment. One of the cities I lived in was entirely split between old converted buildings (that kept raising their rent) and brand new luxury apartments that would bleed you dry.
Smaller houses would help, but even Tiny Homes are fucking expensive now, with them creeping up to a couple hundred thousand for less than 800 sq ft. Basically, builders wanna build expensive houses for a larger profit margin, corporate owners want prices to rise and strategically buy and sell, and private owners want it to be an investment. With the housing market cooling, and builders slowing new construction to wait it out until demand pushes prices back where they want, we’re basically stuck in a self-regulating purgatory, where housing becoming affordable is something that all the market pressures are pushing against.
I don’t get it.
I understand the current housing market is messed up, but parents helping their kids putting a down payment for their house is dystopic “nepotism” now? Wouldn’t you help your loved ones if you have the means to do so even if you are not super rich?
Would it have been better if they told their kids to pick themselves up by their own bootstrap and get a 30 year loan from big banks instead?
You said that you don’t get it. The point isn’t that people are evil for helping their kids, the point is if the housing market is running on the assumption that houses are worth what a family plus their parents will pay for them, regular families won’t be able to afford houses. If everyone agreed that regular young families should be able to afford a house and didn’t rely on older mom and dad for money, houses would be more affordable for everyone.
I couldn’t read the article because of the pay wall, but did they say what the 40% is an increase from? I know I got some help from my parents on a down payment in 1995, and it wasn’t super unusual then.
Edit your comment to say, “in the limited circle of people I am exposed to” and your comment would include the context within which is often left our of these types of anecdotal statements.
For example, in the limited circle of people I am exposed to, the people I grew up with mostly ended up as burnouts, prisoners, or permanent renters.
We are limited by our reference frame, unless we are willing to step outside of our own anecdotes. And even then, it is not easy because humans don’t think stochastically.
A problem I’ve seen is that since the 90s there has been a progression from small, affordable ranch houses and such to minimansions. Homes have simply gotten bigger. One thing driving it has been the double income household, not only has this driven up prices since the homes simply cost more to make but with two people paying the mortgage you are now in a situation where if one person loses their income you can’t cover for them. If it was a single income household and, say, you got disabled the other person could possibly cover for you.
Ok, if you are a middle class parent with a little bit of savings, and one of your child wants to buy a house, wouldn’t you do everything you can with your money to help them too?
You don’t have to be rich to want the best for your kids, and I really hate the selfish boomer mentalities of “oh I have it hard back in my day, so I’m not going to help my kids with anything to teach them a lesson about life.” It’s fucked up.
You’re looking at it backwards. Nobody is saying that it’s bad to help your family succeed. They’re saying that it’s fucked up that the only way gen-Z adults can afford homes is for their parents to pay their way.
Ok, if you are a middle class parent with a little bit of savings, and one of your child wants to buy a house, wouldn’t you do everything you can with your money to help them too?
Some peoples don’t have very nice parents, but that’s besides the point. The point people are trying to get across is that you shouldn’t have to depend on the generosity and fortune of your parents to ever dream of owning a home.
This isn’t a criticism of parents wanting give their kids a headstart, it a criticism of dog eat dog capitalism.
Ok, if you are a middle class parent with a little bit of savings, and one of your child wants to buy a house, wouldn’t you do everything you can with your money to help them too?
The point is that less and less people are in this position. Middle class parents with savings? What is this, 1985?
You seem to only be reaching for the “take this comment as a personal attack on my situation” part and missing the "this is a worrying trend if the requirement of home ownership is a stable family. Or stated more simply inference vs implication, pause being the “main character” of this comment section for a moment, because no one is discussing you. It would be helpful if you would stop inferring that we are. We have no control over your inferences.
To the topic, a stable family is something you are born into, an inheritance of its own. No one chooses their parents. The topic isn’t “being a bad parent is badass!” but instead that “inheriting good parents” is now a requirement for home ownership. If you cannot see through this lens, I doubt further commentary would assist.
Do anything for your kids != do everything for your kids. I get where you are coming from but putting kids in a house they possibly can’t afford can be a bigger issue later down the road.
… Since the movie promotion campaign before the strike worked so well here, to test my theory, I’m trying to shitpost my way into an Oscar this year.
Let me get this straight. 4 generations living under the same roof is traditional, but helping your kids buy a house is dystopian?
Is this just coming from the “money is a crime” crowd?
I hate this term … giving your kids money to help them start out on their own isn’t nepotism, it’s parenting.
Nepotism is when you violate a responsibility you have to a third party (e.g., your employer) to act impartially in their interests, in order to benefit your family.
Is the idea that parents should donate their money equally to everyone’s kids? This makes no sense.
I agree it isn’t nepotism. But I think the societal expectation that parents have to help their children is a the same systemic oppression with a new face. This only applies to the well-to-do, who buy into capitalism. Give up their lives to the machine.
This power sincerely complicates coming out of the closet, dating and marrying for love, social expressions like tattoos, life choices like art instead of business. This gives us another reason to second guess whether we ought to live life for ourselves or to please our parents.
I mean, it’s a bit tough for me to see it that way. Having wealthy parents who can use the leg up they intend to give you in life as a way of manipulating you into doing and being what they want, and that’s gotta suck.
At the same time, you can cut ties with them and you end up in the same position a lot of us start in: having to do it on your own. You’ve got a choice that other people don’t, it’s difficult for me to see that as a disadvantage.
the same position a lot of us start in:
yea, the starting place sucks in this country and adding cognitive dissonance to whether or not to obey my shitty parents is not something I wanna have to worry about on top of the bog standard issues about healthcare and school loans.
Better to reign in hell than serve in heaven. The moment my parents played games with who I was going to be or they would cut me off I left them. I would pick homelessness again than give them an inch. They can go cry to their bff supply side jesus
It should definitely not be called nepotism at the individual level, but if you agree with the core premises that working should be able to grant you enough money to buy your own house, it could be argued that it is a societal kind of nepotism in that the family you have determines your most basic opportunities in life.
giving your kids money to help them start out on their own isn’t nepotism, it’s parenting.
You can just say your parents gave you an entire apartment building when you turned 18.
Is the idea that parents should donate their money equally to everyone’s kids? This makes no sense.
The idea is that Karen doesn’t get veto power over construction and we have enough housing for all.
You can just say your parents gave you an entire apartment building when you turned 18.
I moved out and went no contact with my parents on my 17th birthday… but I would love to be able to give my kids the kind of help my parents didn’t give me.
The idea is that Karen doesn’t get veto power over construction and we have enough housing for all.
That’s a very good idea, it’s what I’ve been harping about in my other comments. You don’t fix this issue by demonizing people for buying houses, you identify the reason there aren’t enough houses in the first place and go after that.
San Francisco allowing property owners (whose houses have skyrocketed in value) to block any kind of dense housing being built is the reason SF is so utterly fucked.
You don’t even need to have super rich parents. My mother helped me get my first home with 15K that she saved throughout the years. (I paid her back).
That was just enough for my down payment. Without that I couldn’t have gotten the house.
I think the issue is what if you have no parents or parents with no money (or negative moneys). You could do everything right, go to school, get a professional job, and still not be able to buy a place.
The housing market is definitely fucked worldwide. Many don’t have parents with money and can only rent or not even move out of their parents house.
Some of us got lucky with minimal down payment from their parents 5-10 years ago. Its just ridiculous how the market changed in such a small time. Like the houses are still the same, the population did not grow exponentially. Wtf is going on?
I thought I got hosed 10 years ago but when I look at prices now it is night and day. The demand has pushed people into smaller towns and into the rural areas so now I get to see a modular home that sold for $75,000 10 years ago be listed for $300,000 and sell.
The cost of new houses is not helping and talking with some small scale builders (they can only build 1 or 2 at a time) the cost to build is high enough to give many pause.
This is what happens when real estate becomes your nations biggest industry.
What happened is that after 2008, builders became afraid to build (for good reason), and since then housing construction still hasn’t rebounded to what it needs to be to meet demand. The houses they are building are bigger (5bd compared to 2-3bd), so new homes are also more expensive to begin with. Both first-time buyers and downsizing boomers are competing for the tiny supply of 2-3bds.
There’s an element of “be fiscally responsible and you too can save up” but more often than not, the answer is “make more money”.
Or move to a lower cost of living area… (until those areas become to expensive)
So your house was somewhere in the 75k to 150k range? Average home prices where I live and work are 800k. That would mean a down-payment of 80k to 160k. You would absolutely “need to have super rich parents” to get that kind of help. I’m happy for you that you were able to secure a home of your own with the help of family. That just isn’t a simple reality for most most people who don’t have super wealthy parents where I am from.
You only need 3% of the loan for a down-payment. That would be $500k assuming OP did not add anything in.
My parents helped my wife and I a bit. I grew up in a 1000 sqft house with 2-3 other siblings. I do, however recognize that not everyone’s parents were lucky enough to have that much stashed away but should still have the opportunity to purchase a home.
That’s true in the US, but depends heavily on the country: if you’re buying in London, you only need 5% as a general rule, but other regulations push the average down payment to about 14% before purchasing is on the table. In the Netherlands, from my understanding, you wouldn’t need a down payment at all.
I’m italian and here in 800k dollars is a very big house in a very good place. Or a good apartment in a big city. Your salaries are so good? I mean here median salary is like 1.9k dollars/ month ( after taxes and health insurance ). Your salary after taxes and insurance should be 6-8k dollars/month for a normal job. You have such high salaries?
No, we probably have a bigger gap between housing cost and worker pay. In my area:
Median household income $61k/year last year (per household not person)
Median price of a house that same year was apparently $400k. Including those way far away from the city. In my average but in the city neighborhood new builds are going for close to a million and older houses about 400k.
Median rent monthly here is an eye watering $2,350.
Borrowed 3k from my bad didn’t have to pay back. There is nothing wrong with getting help from family to buy a home. Fuck this article. The housing issue is caused by large corporations who are buying up all the houses along with interest rates keeping average person from buying a home.
There is nothing wrong with getting help from family to buy a home.
It is indicative of a problem that nearly half of home buyers have to. And indicative that we are possibly heading in a direction where only those with familial wealth will own housing. This is objectively a problematic direction.
Also, yes, if it’s some absurd amount like $200k borrowed, nepotism is the right word. A couple grand may not be a lot to you, but there are places where it is as well. I know for a fact plenty of people from my hometown would struggle to loan their child even a couple thousand to buy a home. But the child is stuck paying rent that’s more than a mortgage, keeping them from savings up for said down payment. The fact we can’t save money is a problem, and parents giving their children money to buy a house just masks the issue except for those without that money.
You’re not wrong but again it because of greedy corruption and corporations buying our politicians.
Until we rise up and demand better it going get worse. Unfortunately we can’t band together when 40 to 50% of Americans like the boot on their necks. Long as it hurts others too.
3k doesn’t make you rich. I get 3k every tax return just on the kids or I did now one is over 18.
Now if it was 10k or more than maybe but even that is middle class not rich people money. Believe it or not having a million dollars will not make you rich. Oh it helps but it easy to lose and go poor again.
People don’t understand what rich really is. 10 million our more now your a rich fuck because you now have generational wealth.
Not enough now, here in the UK at least
Single 35yo. Earning alright. Mortgage on a 160k flat required a £90k deposit. Was a fucking nightmare, but at least I got it locked in at 4%
That down payment is nutty, but at least you now only have a 70k mortgage. Is it common for people to borrow for the deposit in the UK?
That is not true, there are programs and different types of loans where you can buy a house with as little as 3% down payment.
3% is super low, not sure what country this is in but even if you can put up 3% can you afford the monthly payments?
For example for lets say a 1 million $ home (normal for a HCOL city) you have a $30,000 down payment and a monthly $5500 (based on about a 4.7% rate). This still seems hard. The down payment is not the only limit to home ownership.
Yes but if you don’t qualify for a special program you are only seeing a 3% down payment with an exceptionally high interest rate and significant PMI. Which makes it even more unaffordable. That might help recent high income earners with little savings but again makes it difficult for average people with average savings.
God, if only people could just like pool their resources together to build homes or something…
We could even call it something like “social housing,” and have it be a publically regulated service instead of treating housing as some sort of game of investment for the wealthy? No no, totally impossible…
Even going back to the way things were in the 70’s where workers got a fairer share of the products of their labour that wasn’t leeched away by non-productive shareholders would make a huge difference. There’s a reason you could buy a house on a single income when you had 5 kids back then.
Hell we had deals where if you build the house yourself, they will give you the plot of land absolutely for free. But that was 30 years ago. I am absolutely sure people these days couldn’t do it - either not manually skilled enough, but have the money, or manually skilled, but their job doesn’t pay well enough to afford spending time building a house.
Well, the 70s was before the time of Reagan and Thatcher coming in and wrecking unions and deregulating commerce and industry.
It kinda did, didn’t it? People are still living in those buildings, right?
They live in rundown shitholes mostly.
I tried to add a photo to this post but images seem to be banned atm due to the attacks on Lemmy. Just Google it and see the beauty of the land of krokodil.