re: The High Cost of a Home Is Turning American Millennials Into the New Serfs

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Mingo Was His NameO

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For me for example, I didn't necessarily want to move to a metro area, but the salary difference between there and my hometown was just too substantial. I know that's anecdotal (which I've been shitting on) but that reflects the overall shift.

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The Bureau of Labor Statistics did a study where they showed that while you earned more than your rural counterparts in income, you spend a third of that on increased housing costs, and also had higher food costs also. You also spend 30%+ more than your rural counterparts and in a sense, the increased costs actually almost totally negate the income increase you experienced.

LINK

When your rural counterpart doesn't have to pony up the 20% down payment thanks to USDA's Rural Development Loan, and gets the exact same interest rate you do, he also has more of his discretionary income free to spend on other things while you're focused on saving a down payment.

In fact, he can finance up to 102% of the appraised price (not the purchase price on a conventional loan that would be one of your only options in an urban area) itself. That caveat of the loan from a programmatic standpoint gives a rural borrower and potential homeowner much more soft, forgivable terms and frees up his income by comparison to someone who has to finance higher amounts and save more in order to have the privilege.

As I said, I think the stats bear out that the difference in income is offset by higher cost of food, living and home ownership by comparison, and the enticements with favorable loan programs like USDA RD Loans eliminate those "hard math," cost differentials altogether IMO.