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.

Millennial Americans Are Moving to the 'Burbs, Buying Big SUVs

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Americans aged about 18 to 34 have become the largest group of homebuyers, and almost half live in the suburbs, according to Zillow Group data. As they shop for bigger homes to accommodate growing families, they’re upsizing their vehicles to match. U.S. industry sales of large SUVs have jumped 11 percent in the first half of the year, Ford Motor Co. estimates, compared with increases of 9 percent for midsize and 4 percent for small SUVs.

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The shift to suburbia may surprise those who’ve chided millennials for being more interested in pricey avocado toast than in saving for a home. Much of the generation delayed marriage, childbearing and home ownership after graduating with heaping student-loan debt and entering a weak job market. As more millennials overcome this, many want the life of their baby-boomer parents -- the kids, the house in the ’burbs and the beefy SUV.

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Here is your under 120k inventory here in Metarie. It is shite. Not starter home, shite home

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120K gets you a house in Kennairie with laminate floors and smelly carpet that hasn't been updated since the first moon landing. It's not even worth renovating.

Plus if you polish a turd and every other house gets torn down and replaced eventually, you'll be stuck with the hood's ugly duckling that no one wants to buy 10 years from now when you're ready to upgrade.

So a jump in SUV purchases for six months means millennial are spoiled. Solid statistic there.

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This is what happens when you grow up being told that you're a winner (even when you lose) and can do anything you want in life, sky is the limit.

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Millenials couldn't even parent themselves correctly!!!!

What you expect to live a normal life in addition to owning a home? Let me tell you that no one in my generation had a single minute of fun until they hit 40. Creature comforts? We fricking slept on the floor and stared at rocks for entertainment I tell you!

How dare you expect to be able to eat a meal out and own a house. Restaurants didn't even exist until 1995 you know!!!

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I scored a 29

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How do you even remember to breathe?? Dumbass.

Who said they are spoiled?

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Mingo Was His NameO

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Let's say those other costs are 20 or even 30%, that's still 40-50% higher income compared to rural areas. That's a significant portion. For myself, my starting pay was probably in the 10-15k higher range so that's minimum 5 grand I'd be giving up.

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The article quoted earlier does not at any point mention that 40-50% higher income is experienced in urban areas versus rural.

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I'm not saying this is incorrect,

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I know its not correct. I've closed a litany of people as an originator and as a closer using this program. In fact I actually closed on my home using USDA's RD Program (I live in a "rural" area on the census map). I'm quite familiar with it.

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hut what is the percentage of people that would realistically choose where to live by the way they can finance their house? It's really just a "bonus." You can't expect people to choose their location based on that.

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People do it relentlessly in my area. This isn't anecdotal experience, either. When the crash hit a decade ago, the only 100% money left was bond programs, niche programs and RD. USDA RD Loans were FLOODING the USDA's local offices and the backlog for them to process and sign off is still 21-28 business days in some instances. The program routinely completely runs out of funding each year.

In 2014, there was a $900,000,000 Budget for Section 502 (USADA Rural Development Direct Loans) Mortgages and $24 billion in Section 538 (RD Guaranteed; think Chase Bank originating the paper based on RD guidelines and then submitting to USDA's RD Review department, getting signoff and then servicing it for USDA on their behalf).

I'll throw those numbers out there again...Almost $25 BILLION for these types of mortgages in 2015.

In 2016 and 2017? The same amounts were allotted and/or allocated. $75 billion dollars in loans over 36 months. You telling me this isn't a popular program?

...and this is where things get sticky for me from a context standpoint which is where I initially waded into the discussion. The Baton Rouge "suburbs," of Livingston Parish and Ascension Parish (think Prairieville, Dutchtown, Live Oak, Denham Springs, Walker, Etc) are all considered, "rural," on the census maps while Baton Rouge is considered "urban or suburban".

Current day Denham/Live Oak/Walker aren't exactly rural compared to some place like French Settlement, Frost or Killian. But the census Map gives them this power that allows a litany of homeowners to harness more buying power to afford more home at a lower cost more quickly than folks the same age trying to buy in Melrose, Lake Beau Pre, or Beauregard Town in Baton Rouge proper.

This is far from anecdotal evidence. You can check my numbers as they're pulled from the Summary USDA FY 2017 Budget Summary (page 44 on the page listing, 49 on the PDF itself I believe.

But keep telling me that people aren't utilizing this program and choosing where they live because of it? LP, AP and Tangi have grown like weeds EXACTLY because of this program and programs like it. I disagree whole-heartedly with your assertion otherwise and these stats are what fuels it.