The News Radar

Timely links to external news and articles, usually valuation related, with occasional commentary.

Originally posted Thursday, 22 December 2022
Renters Want to Buy Their First Homes — They Just Can’t

While 95% of millennials who rent want to own a home, they’re doubtful they’ll be able to pull it off any time soon.

First there was the pandemic housing frenzy, with bidding wars and cash offers dominating an under-supplied market that was too hot for many first-time buyers to crack, even with historically low mortgage rates. Then came interest rate hikes, which have driven up borrowing costs. And while the Fed has managed to cool housing demand, the supply of available properties is still low and monthly mortgage payments have spiked out of reach for many potential buyers.

Left unstated in this article is that this result is the explicit and purposeful goal of current fed policy. Rates go up => people buy less things. The only interesting facet here is how such policy affects different groups disproportionately:

Across age demographics, 88% percent of people who bought a primary residence between July 2021 and June 2022 were White, according to the National Association of Realtors. Among first-time buyers during that period, 82% were White, the highest share in at least 20 years.