Why is it so Hard for Millennials to Buy a House?

Why is it so hard for millennials to buy a house? I remember believing that “by 25, I’ll have my own home, and by 40, I’ll be a millionaire”. I’m 30 now, and both those dreams feel frustratingly distant. But I know I’m not alone, which makes things both comforting and scary. Will millennials ever be able to buy a house? It’s hard to know.   Millennials, the generation born roughly between 1981 and 1996, are facing a unique set of challenges when it comes to buying a house.  Unlike our parents’ generation, who entered a housing market where you could buy a 3-bedroom house with garden for two lemons and a handful of grapes, our reality is a bit different.  Soaring house prices, stagnant wages, and the burden of student loans are just a few of the hurdles standing in the way of the first rung in the property ladder. So, this isn’t just a personal struggle; it’s a societal one.  Homeownership has traditionally been a cornerstone of young ambitions, offering stability and a path to wealth accumulation.  Understanding the factors at play, both economic and psychological, is crucial to finding solutions for our generation and ensuring a future where homeownership remains a viable option for young adults. Let’s make millennials wealthy. Our Boomer Parents had it Easy The period after World War II was a huge boom (for white people***).  Governments across Europe and the West prioritised rebuilding infrastructure and housing. Policies and a growing middle class with stable jobs created a surge in demand for new homes.  This, coupled with readily available credit at low-interest rates, fuelled a housing boom unlike anything seen before. All this to say that it’s not fair to yourself to compare where you are in your 20s and 30s to where your parents were. (And not fair for them to do it either!) They might have been a homeowner, an operational manager, and parents to 3 kids by the age of 24 with nothing but a high school diploma. But that is simply not the reality we live in anymore. ***It’s important to acknowledge, however, that this dream wasn’t equally accessible to all. Discriminatory practices where lenders denied mortgages to residents of certain neighborhoods based on race or ethnicity, prevented many minority communities from participating in this period of widespread homeownership. If your parents are people of colour who have struggled to build and pass on wealth, there were real systems in place that were in their way. Why is it so hard for millennials to buy a house? The 2008 recession offers a clue Oh man. I think most of us remember the chaos of the financial markets in 2008.  People losing their savings, businesses closing down, and, of course, a lot of foreclosures.  The global financial crisis of 2008 had a profound impact on the housing market worldwide.  Foreclosures became commonplace, and the value of homes plummeted. This would have been “good” for people who had money. But I was in 10th grade and most millennials were yet to finish their college degrees. By the time we had deposits and jobs to go and ask for a mortgage, lending practices had changed dramatically.  Banks were demanding a whole lot of proof to give you a tiny bit of money. We’re still having to provide our ancestors’ birth certificates and the blood of a newborn goat just to be seen by a broker! The risk aversion that followed the crisis continues to shape the housing market today. Current Reality is Very Different to the ‘Good Ol’ Days’ Left: Ratio of house prices to income (US). Above: Ratio of house prices to income (UK). Note: a “good” ratio is around 4. Why is it so hard for millennials to buy a house? Well, part of the reason is because the world has just become a lot harder. Like, a lot! There is a fundamental imbalance: skyrocketing housing prices far outpace wage growth (see pictures above).  This means us millennials are needing to save a significantly larger portion of our income for a down payment, leaving less for other necessities and delaying our entry into the housing market.   Compounding the issue is the burden of student loan debt, which not only impacts our ability to save for a down payment but can also affect our creditworthiness, making it harder to qualify for a loan in the first place.   On top of that, many of us are freelancers and contract workers. This rise of the gig economy further complicates the financial picture for millennials.  Unlike traditional jobs with stable salaries and benefits, gig work often comes with variable income and limited job security. This can make it difficult to secure a mortgage, as lenders often look for consistent income streams.  The lack of employer-provided benefits, like health insurance, adds another layer of financial stress when navigating the housing market. But also, Millennials are just Build Different Being parented by heavy-handed boomers caused a lot of us to rethink the traditional life plan our parents espoused. (And maybe also rebel, just a little). Secure a good job, get married, have children, buy a house. Meh. We’ve seen how that doesn’t lead to happiness.  Many of us are defying these traditional timelines.  Marriage and childbearing are being delayed, with millennials opting to focus on education, careers, and travel experiences before settling down. This shift in priorities have rearranged our homeownership goals. A shift in values Unlike our parents’ generation, whose focus may have been on accumulating material possessions, us millennials prioritise travel, personal growth, and building meaningful connections.  Social media platforms can fuel this desire, (hello, homesteading Instagram) showcasing curated glimpses of fancy destinations and adventurous lifestyles.  This shift in values can impact our approach to homeownership. My husband and I invested in a caravan before realising we wanted to go the traditional route after all. (It’s now proving might difficult to sell said caravan and get a house).   There’s also the concept of “renting as the new owning” that has

7 Reasons Why Your Budgets Keep Failing (and How to Fix It)

Ah, adulting. That glorious (terrifying?) transition into the land of independence, responsibility, and…wait, what’s this? Bills? Rent? Surprise medical expenses?  While high school might have equipped us with the quadratic formula, navigating the complexities of personal finance often feels like total gibberish. Is it any wonder why budgets fail?  We meticulously craft spreadsheets, categorise expenses, and vow to stick to the plan… only to find ourselves bewildered weeks later splurging on an emotional-support-vacation. (Just me?)  But fear not, fellow financial misfits! My journey, littered with the remnants of several failed budgets, has finally led me to a place of financial clarity.  Through a shift in mindset and the implementation of some key practices, I’ve cracked the code on not just creating a budget, but actually sticking to it.  This article dives deep into the reasons why budgets fail so often.  I’ll explore the psychology of successful money management, and give you actionable tips to create a personalised spending plan that works for you.  So, grab your chai (or whatever you use to self-soothe), and let’s get adulting! Why Budgets Fail #1: Unconscious Money Beliefs If you have repeatedly failed at properly managing your personal finances, more likely than not, you have unconscious money habits dictating your actions behind the scenes.  And one of the biggest culprits behind failing budgets is a psychological phenomenon known as the “ostrich syndrome.”  Take the ostrich who is faced with danger, burying its head in the sand, with the logic of “if I can’t see the predator, it can’t see me”.  This might seem like an obviously foolish strategy for the ostrich, but many of us do it with our personal finances (and it’s probably, in most cases, why budgets fail).  We avoid anything related to your situation – letters from the bank pile up unopened, we “contactless” tap our cards or phones without looking at the till, and budgeting apps remain unopened for months on our phones.  This behaviour is no small issue.  It stems from a deep aversion to taking responsibility for our financial situation. And in my opinion, is probably the number 1 reason why budgets fail.  It’s easier to remain blissfully ignorant than confront the harsh reality of mounting debt or dwindling savings. In many cases, this avoidance is rooted in childhood experiences. Perhaps your parents fought constantly about money, creating a negative association with finances.  Maybe you witnessed a loved one struggle financially, and the fear of a similar fate fuels your unwillingness to confront your own situation.  For some, budgeting can feel like a symbol of “adulting,” a responsibility they’d rather avoid. They might crave the carefree spending habits of their youth.  Clinging to financial irresponsibility may be a way to hold onto a shred of ease in an adult world fraught with anxieties. Ignoring your finances can also manifest in impulsive spending sprees, a desperate attempt to fill a void with material possessions.  It’s a self-soothing technique that likely has its own set of deeply rooted causes like growing up in poverty/ austerity or in a family that only expressed love with things.  Ostrich syndrome, and all the other unconscious money beliefs and habits we have, often gets so out of control that our brain starts to do what’s known as “magical thinking”.  This is adopting a belief that the complicated web of financial problems we spun will somehow magically disappear.  All of these behaviors are ultimately self-defeating and hinder any attempt at creating a sustainably money life.  But there is a way out.  What you need is a little bravery to uncover and confront these secret money beliefs that have been ruling you from the shadows.  Here’s how. How To Stick To A Budget: Examine Your Money Mindset One of the most powerful, yet often overlooked, ways to stick to a budget is by understanding your own money mindset.  Those deeply ingrained beliefs about money, formed through childhood experiences, societal messages, and family dynamics, can have a profound impact on your spending habits. Uncovering these hidden beliefs is like shining a light on the puppet master pulling the strings of your finances.  You’ll finally have an answer to why you overspend on credit or how you end up with ten new pairs of shoes every month. It’s probably also the leading cause of why budgets fail. This process won’t be a quick fix.  Facing challenging memories and confronting limiting beliefs can be difficult, but it’s arguably the most worthwhile investment you can make in your financial future.  Trust me, I speak from experience here.  But remember, a transformed money mindset isn’t just about creating a budget that works – it’s about rewriting the narrative of your relationship with money, paving the way for long-term financial security and freedom. Practical Tips (1) Book Recommendation “The Energy of Money: A Spiritual Guide to Financial and Personal Fulfillment” by Dr. Maria Nemeth.  I read and did the exercises from this book a few years back and it honestly was a wonderful starting point.  It guides you through exercises to identify your relationship with money and rewrite any limiting beliefs holding you back.  (2) Therapy & Inner Child Work What broke through the barriers for me was therapy and, in particular, inner child work. Particularly, working through John Bradshaw’s book “Homecoming.”  It can be incredibly valuable (though very tough) unearthing those early experiences. But there is nothing better than to understand what long-held beliefs might be shaping your financial decisions today.  (3) Talking to Family Talking openly and honestly with safe and supportive family members about their money habits can shed light on your own financial beliefs.  Siblings and parents, especially, would make interesting case studies. Especially because it might be easier to see where they’re going wrong than to analise your own beliefs and habits. Of course, only do this if you have safe, helpful, and generally loving family. Otherwise, you might be setting yourself up for more failure. Another Way To Stick To A Budget:Work Your Self-Trust Muscle Past budgeting