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Homelessness Soaring, Home-Buying Age Quickly Rising in U.S.

Homelessness Soaring, Home-Buying Age Quickly Rising in U.S.

By RZR News Team
Aug 28, 2023

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Analysis

For you older readers, do you remember that feeling when you finally bought your first house? It was probably a mixture of fear, excitement and a sense of true independence as you looked to the years ahead. If you’re nodding your head at reading this, I pose this question: How old were you when you bought that house? 

It’s not a pointed question against you or anyone else, but it has become a developing trend that Millennials and soon Gen Z are unable to afford to buy houses, and in extreme cases become homeless. 

I remember driving through a big city and stopped at a traffic light. One man came over to wash my windshield and I declined. The part that struck me about that experience, he was probably 17-18 years old and one of 4.2 million youth and young adults facing homelessness each year.  

According to the White House website the Biden administration says they are going to reduce homelessness by 25 percent by the year 2025 with the goal of building a country that offers a safe affordable home for every person. One could ask, who is included in the phrase “every person?” 

Besides the massive ambition of executing that goal in the next two years, every person is a syntactically ambiguous phrase. Does that mean every American? Every homeless person? Every person in the world? As of now, it seems the phrase only applies to people favored by the Biden administration.  

As the 2024 presidential election draws closer, Americans have yet to see homelessness numbers drop instead of rise, in addition to house purchases increasing instead of decreasing. The Biden administration ostensibly raised interest rates to combat inflation, but in doing so, have increased the difficulty for younger Americans to buy homes, exacerbating an ongoing issue.  

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Does this really surprise anyone? We all know that homelessness rates have been soaring throughout the country. Ironically, California, which is home to one and every three homeless people, has actually seen a 3.4% decrease. The issue is moving more toward the middle of the country. States like North Dakota, Wyoming and Kansas have seen skyrocketing rates

Coupled with the homelessness epidemic, home prices are continually rising and becoming more unaffordable to people coming out of university. The average age of home buyers is 36 years old – as of 2022. Additionally, the price of homes has risen in addition to the price of rent. It is becoming near impossible to find affordable housing right out of college, leaving people most vulnerable out of the street – literally. 

The issue is not black and white as some may want to portray it as – and the solution is even more complex. It is easy to blame people, but a lot of this problem is caused by the federal government and state governments. To begin with, the minimum wage, which is something that is meant for young people, hasn’t risen to meet inflation. Those with university degrees are often in crippling student debt making it even harder to find a place to live. Additionally, there exist, in some states, adverse incentives that make it harder to find a home, not easier. 

There needs to be a balance – something that American politics distinctly lacks. This is an issue that cannot nor will be solved with one bill and Biden’s signature. But there are steps which can be taken in the interim to help generally alleviate the problem at the moment. Firstly, a federal plan to limit the amount of student loans one can take out (i.e. to stop leaving college with six-figure debt), provisions to restructure the debt incurred and price caps on state-funded universities would help college graduates leave on a better financial foothold. Secondly, there need to be programs that ensure minimum wage matches inflation but coupled with time limits to work minimum wage jobs. People in their forties should not be earning minimum wage, that is not what it was intended for and it allows companies to rip off their workers. But simultaneously, social welfare, which is what people who are homeless rely on, needs to be tied to having a job. Lastly, in high-rent areas, like New York City, Los Angeles and other major metropolitan areas, programs to limit the price of rent and incentive programs to live outside metro areas are solid first steps to alleviate some of the strain. 

While the solution is debatable, the problem is not. The facts are what they are and they paint a poor picture. There needs to be pragmatic and measured strides. It cannot just be tax-and-spend solutions or rugged individualism solutions. Millions of Americans depend on decisive and measured action. 

– William J. Goldman

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Homelessness has been somewhat of an issue for decades. To make matters worse, it hasn’t gotten much better. One could argue that the issue of homelessness is still steadily growing. According to data from the National Alliance to End Homelessness, homelessness rates have gradually increased annually by approximately 6% since 2017.

The state of the housing market and the cost of living in general primarily play a role in not only homelessness but also the increase in the average homeowner age. According to a survey conducted by the National Association of Realtors, the average for first-time homeowners has risen to 33. Not only that but the average age of all buyers is at 47. Both of these statistics happen to be all-time highs since 1981.

Coming back to the housing market, housing mortgage rates have been around 7 percent. This is the highest the rates have been in the last 15 years according to the New York Times. It is safe to say that almost everyone who lives in the United States knows that homelessness is a big problem. Nine times out of ten the average person has seen or had some sort of encounter with a homeless person.

The problem is right in front of the American people. Because is has gotten somewhat out of hand, it can not be something that can be fixed overnight. This problem with homelessness simply just contextualizes the fact that there are other economic issues that factor into the housing market along with other areas of the economy.

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It is no surprise that homelessness is spiking and younger generations are unable to afford homes – government interference caused housing costs to spike.

Prices for any good or service rise when demand is high but supply is low. There is a massive housing shortage in this country of nearly 4 billion units. This shortage inevitably results in astronomical housing costs, which, coupled with stagnant wage growth, have put buying a house well out of reach for many in the younger generations, including the writer of this analysis.   

This shortage is no hiccup of the free market. It is a direct result of government interference – everything from tariffs, federal ownership of land, zoning laws and restrictions on what sort of buildings can be built and how high they can be built, all contribute to housing scarcity. 

Changes are necessary if we do not want a mass homelessness problem. The tariffs should be abolished, the federal government should sell off some of the land it owns and zoning laws should be reformed to make it easier to build multi-unit buildings and taller buildings, as well as more residences in general. Municipalities must erase any red tape that gets in the way of new housing construction, so they don’t end up like San Francisco, who a self-imposed bureaucratic labyrinth – just getting approval for a construction project requires 87 permits which can take well over a year at a cost of hundreds of thousands of dollars – fuels its massive housing shortage.

One solution that should never be considered is rent control, which is proven to perpetuate housing scarcity and increase housing costs.

The current housing crisis was borne out of government interference. We can have affordable housing for everyone if the government just gets out of the way and lets the free market do its job.

– Pietro S. Geraci

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