Thanks to Short-Term Investors, I'll Probably Never Own a Home | Opinion

I've come to accept that I'll likely never own a home.

It's not the end of the world, I suppose. But reminding myself it could always be much, much worse is key to rationalizing this. I'm not alone, either. You've heard it before: millennials are the first generation worse off than their parents. We are a generation beset by setbacks, and there may be nothing more illustrative of this dilemma than housing.

Now there's another obstacle in the way: private equity buying single-family homes at record rates.

New findings from Pew reveal that around 25 percent of single-family homes sold in 2021 were purchased by investors like private equity firms, and over 75 percent of purchases were made in cash. This has led to a dramatic increase in rent prices as these investors look for short-term returns. In January, the rent for single-family homes had risen 13 percent year-over-year. The year prior, the increase was only 3.9 percent. In May, the national median rent exceeded $2,000 per month, up 15 percent from the prior year. These high costs mean that fewer people are able to save for downpayments and leaves many aspiring first-time home buyers out in the cold. An estimated 2.5 million households will have to postpone their plans as a consequence of the investor class gobbling up homes.

Rising rents
A 'For Rent' sign is posted near a home on Feb. 07, 2022, in Houston, Texas. Brandon Bell/Getty Images

During the first year of the pandemic, a majority of young adults lived with their parents to make ends meet. The number of American adults living with their parents or in other multigenerational homes has quadrupled since 1971 with 40 percent of adults citing financial reasons as the cause, according to Pew Research.

This comes as no surprise. Over 70 percent of middle-income homes report their wages have fallen behind inflation. Somewhere between 50 and 70 percent of millennials live paycheck-to-paycheck.

Just keeping up with bills and rent payments — let alone saving to own a home — is increasingly a struggle for more young Americans. Median rent prices have risen 149 percent between 1985 and 2020. During that same period, income only grew 35 percent. Over 23 million people spend over half their income on rent.

And, of course, there's student debt. Nearly 15 million millennials — more than any other generation — are dealing with student loan debt, with an average balance of almost $40,000. Freeing them from this debt burden would likely result in greater home ownership rates and, thus more wealth accumulation by millennials. Around 70 percent of millennials with student debt said loan forgiveness would expedite their timeline for purchasing a home to one-to-three years, down from four-to-nine.

Young Americans already are struggling to make ends meet despite being more educated and working longer hours than prior generations. About 40 percent say that the combination of low wages and high home prices are preventing them from obtaining what many deem a core aspect of the "American dream," a home of their own.

Since 1980, when the median home sale price was $64,000, the cost of a home has risen around 570 percent. In the first quarter of 2022, the median home sale price was $428,700. According to the Census Bureau, the 1980 median family income was $21,020. By 2020, the most recent year St. Louis Fed data is available, it had only risen to $67,520 — an increase of just 221 percent.

Reigning in an inflated housing market will be difficult for a Congress already paralyzed by hyperpartisanship, but a good first step would be to institute national rent control. With renters in major cities experiencing rent increases from 15 percent up to nearly 50 percent, protecting them from suddenly needing to pay higher rates that far exceed even the most generous wage increases is the least Congress could do.

Having a place to permanently call home should not be a pipe dream. A gluttonous investor class should not be what prevents people from making that dream a reality. We must have a level playing field for working people and addressing wage inequality and inflated costs of living head on is how we achieve one.

Jordan Uhl is a progressive activist and writer living in Washington, D.C. He is the host of Deep Dive on The Young Turks and co-host of The Insurgents podcast. His Substack is HateItHere.

The views expressed in this article are the author's own.