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It’s getting prohibitively expensive. Before brokers fees were banned in Boston, a $2,000/mo apartment could have cost you $8000 just to move in. That’s for first, last, security and brokers fee. That’s a worst case scenario but even just first and last months rent is $4000. It’s getting outrageous.
Way back when I started my career - I almost COULDN'T take a good job in Boston, because I couldn't figure out how I could literally live there long enough to get my first few paychecks to pay for my rent.
I decided that I'd just go into credit card debt and live in the crappiest hotel that I could find until I had enough money to pay the first/last/security deposit.
Luckily, I found some shady landlord on Craigslist that turned out to be pretty chill, and just let me move in without even paying until I had the money. Dude even picked me up from the airport and moved me right in. It was kind of a rip-off for a room, but it was furnished, and I wasn't going to be in a position to buy furniture for months, so it worked out for both of us for 6 months or so.
I do wonder... At what point does this start to impact who can and can't even move to your area for work? Have we already reached that point?
Reminds me when I moved to boston for a job as a young grad. Found a room available for rent on craigslist for $400 in a 2 floor apartment. Half way through living there, someone bought the vacant apartment downstairs and turns out the room I was staying in was owned by the downstairs people so I had to change rooms.
I think there's always a way to make these moves work. You just need to take a risk and be ready to suffer.
Easy fix, the department of defense has been doing it for years in Southwest DC.
Just build corporate housing.
Then we can have little Amazon towns where all your needs are met and everyone lives in perfect harmony in downtown San Fransisco.
30 year mortgage is founded partly on the idea that your house will be worth more in the future when you sell it. That you can lock in a lower price now.
Number cannot always go up. We are at the top of the carbon pulse. Financialization has taken us far from the material baseline of the rock we are flying through space on. Debt will only get us so far.
For this and many other reasons, why would you believe a house "as an investment" is a reasonable thing to keep hoping for, especially 30 years from now? If you have even a reasonably stable rental, it's less risk exposure if you can save some money that isn't tied up in a down payment.
You're falling for the trap of just thinking of buying a house as an investment.
Buying a house can be an investment, but it's also buying a place to live. Even if the home's value merely keeps pace with inflation over 30 years, you've converted a largely fixed housing payment into ownership rather than paying ever-increasing rent indefinitely.
Along the same lines, you are buying a place. A place that you own and can do whatever you like with. I spent twenty years renting and twenty years of feeling like you can’t hang a picture on the wall, paint a room, upgrade an appliance, or really do anything to improve your surroundings, tends to get tiring.
> Buying a house can be an investment, but it's also buying a place to live.
I'm a strong proponent of both owning and renting, and each has tradeoffs vs. the other. I've moved between renting and home ownership a couple times, and I appreciate the customizability of ownership along with the very real financial advantages.
On the other side, I've also enjoyed "freedom" of renting, where I didn't have to spend any additional time, energy, or money on maintenance tasks. In my HCOL part of the country, I could also afford the rent to live "downtown" when owning anything remotely similar was out of the question.
Your "also a place to live" line is fantastically underrated. When the housing market was flat or declining, I'd always get annoyed when people said something like "I've owned this house for 5 years, but now it's worth $20k less than when I bought it!". That also means if they sold it right now at that $20k "loss" then they effectively paid $333/month plus upkeep to live somewhere for 5 years!
That isn't a trap if we're talking about how other people perceive things. You might want a place to live, but the houses are all owned by people who want investments, so for the purpose of explaining the housing market, they're investments.
No constant anxiety that you’re going to be serially priced out of your own home or that the landlord is going to decide they’re giving the apartment to their nephew or something is worth quite a lot.
I’m not against renting but the rate at which prices are rising in many areas is unbelievable and the inherent instability it brings frankly sucks. It makes renewal time every year needlessly stressful.
If prices were more stable over long periods and one could more easily secure assurance that the owner isn’t going to rugpull them so one could only move every decade or so at most frequent that’d be easier to deal with.
I agree with this. The same goes for subscription cars. Default on the monthly payments and they take it away.
If you purchased a rust bucket of a car, you own it and if it all goes south you still have a roof over your head.
Buying a house isn't just about expected return. It's also about hedging. You need to live somewhere, so you have an implicit liability of a stream of rental costs. The most natural hedge for that is a house. If expected future rental costs go up, your house value goes up. If they go down, your house value goes down. Overall, your risk, in present value terms, is reduced.
Of course this doesn't work exactly and you can nitpick this, but I think people should at least look at housing assets as more than "is it going to go up?", and more about long-term risk reduction. (And, just to be clear, this doesn't mean that you should lever up beyond reason to buy a house.)
> Number cannot always go up.
Yeah, I thought that when I was young too. The housing market can keep going up for much longer than you can hold out. Then, if there ever is a correction, it probably won't drop lower than this point right now.
My advice to any young'un thinking they can wait out the market: you can't, buy whatever you can afford as soon as you can and watch inflation reduce that painful monthly outgoing to something more manageable over time.
Housing isn't an investment opportunity. It's where you live.
This is false. Can you cite a source for the idea that the 30-year mortgage was "founded" on the idea of appreciation? The thirty year mortgage was introduced to reduce the housing appreciation requirement the old balloon loan system relied on.
>Number cannot always go up. We are at the top of the carbon pulse. Financialization has taken us far from the material baseline of the rock we are flying through space on. Debt will only get us so far.
Why can't it? GDP per capita has been steadily marching up since the dawn of industrialization. You mention carbon but most developed countries have decoupled carbon emissions from their economic growth.
inflation disagrees with your premise, there is no reason why number can't always go up, there are plenty of countries that prove otherwise.
Inflation is more probable than deflation: Meaning, over 30 years, we're more likely to hit a period of inflation where the value of your house (in dollars) will go up even though the real value (in your earning potential) might stay the same.
But, if we hit deflation and a lot of people need to default... Well then we're all in the same boat anyway.
> 30 year mortgage is founded partly on the idea that your house will be worth more in the future when you sell it.
Another meaningful reason is that it is a hedge against inflation. You pay a fixed amount for housing for 360 months, rather than having to adjust rental payments that will tend to go up over that time frame.
"The rule of thumb was:
- buy when home prices are 10x rent
- sell when home prices are 20x rent"
- The Big Short by Micheal Lewis [0]
I remember reading this quote and then checking NYC prices and it was a 33x multiple.
Even if the house is worth less, the morgage is eventually paid off. Rent has to be paid forever.
I can't even imagine renting when I'm retired and have less money.
> Numbers cannot always go up
Isn't that how our monetary system works though? Inflation means the numbers WILL always go up.
The number can definitely go up for more than 30 years. There is a lot of wealth out there and the land is not getting any bigger.
Buying a house as an investment is so dumb.
Its only an investment if you are renting it out to someone else, otherwise you are just gambling.
Because you cannot pay market prices if you leave your rent controlled apartment. Once you are out, you never get one again.
Apparently that is beyond the high and mighty Federal Reserve employees who wrote this speculation.
The housing market needs to be socialized.
A socialized housing market replaces exorbitant prices with a lottery; public-subsidized housing in Stockholm has a waiting list of years. The way to stabilize the demand curve is to increase to supply.
A vanishingly small portion of the US rental market is rent controlled - fractions of one percent. In New York City there are only about 25,000 units that are actually rent controlled - tenants who have lived continuously since July 1, 1971 in a building built before 1947.
Rent stabilization - caps on how much landlords are permitted to increase rent - are also not that widespread. Washington DC is unusual in having over half of its rental stock covered by rent stabilization, but even in NYC less than half of the rental stock has stabilized rents.
Get off Reddit, there is no rent control. It's thousands a month, they got you by the balls
Where I live, there's just a growing sense that rent and homeownership are wildly more expensive compared to what you get. Lack of development in the urban core has made moving anywhere else (cheaper) entail buying a car, dealing with commutes, etc. It has also made moving within the urban core significantly more expensive, especially with rent control pricing limiting availability. Basically, from a purely financial perspective, the juice (moving) is not really worth the squeeze.
The promises of WFH have also not come to fruition. The dream of moving anywhere and retaining your email job are not the reality in 2026. Employers seem actively hostile to that idea or are reneging on promises or claims that that "is the future".
Moving is a pain in the ass, especially in today's world where we just have a lot of stuff.
I moved a lot in my 20s, and really grew to hate moving. One year I moved into a place that I hated (because I could just move again) and when I moved out of that place into a place that I loved, I really grew to hate moving.
Comparing to the 1980s maybe misses that the population was much younger then, and there’s still a general trend of people moving more when they’re younger and settling down when they’re older. I would have liked to see the data broken down by age cohorts.
Housing values skyrocketed due to low interest rates. The prices are sticky and won't correct just because mortgage rates have gone up. That means no one can move. What we need is a large number of small houses (or owner owned multitenants) and a population willing to move into them.
It's bizarre to me that this is all couched in "expect". This is a financial problem - they have the actual numbers to know whether the responses are rational.
Maybe my feed is biased. But, I’ve been seeing good arguments lately that “The rent is too damned high!” is largely a problem created by voters. And, I don’t know how we’re going to fix that.
Ex: https://youtu.be/yoT76zITRx8 TLDR: 60% of both left and right wing voters like rent control. 98% of economists oppose it. Even liberal lefty economists. Even though they support price controls elsewhere like utility monopolies. Rent control feels good in the short term, but is detrimental to the vast majority in the long term in a large variety of ways.
The actual solution, to the surprise of no one, is to increase supply.
Unfortunately, there was a paper I don’t have a link to showing that not just old NIMBY homeowners, but largely everyone consistently vote against measures that increase supply. It’s part of a larger effect where people measurably bias their voting against policies that sound like they will benefit rich people. Very similar policies in similar areas will get different votes depending on how the wording makes it clear the rich will benefit.
Well guess who almost always benefits immediately from real estate construction? So… we keep voting to prevent construction and then complaining that the rent keeps going up.
Rent control doesn’t “feel good” — it allows for housing stability in a volatile economic environment. Without rent control, I would be de facto evicted from my home with a 50–100% rent increase from the recent AI boom. (This is literally happening to other folks in my neighborhood.) Why on earth would I vote against it? Because some economist said so? (And no, it’s not 98%, you made that figure up.)
Fortunately, you can have rent control and incentivize housing construction. These things are not mutually exclusive.
Rent control is really about curbing opportunist pricing and gauging, which people do because of course they do.
Realistically, a, say, capped 10% rent growth is MORE than enough to turn a profit on a property. In fact, you wouldn't just be turning a profit, you'd be compounding. Because your mortgage doesn't go up like that.
When we see this insane 100% rent bumps or whatever, that's opportunistic behavior. The landlord knows they can get away with it because of some blip in the current market, some temporary volatility they can leverage. That's bad for everyone involved.
For the landlord, they're trading off security in their investment for "more money now". They might not realize it, but it's a bad choice. Because eventually they will be forced to aggressively cut the rent or be pushed out. If they had just taken a modest hike year over year, they likely would've come out on top.
> It’s part of a larger effect where people measurably bias their voting against policies that sound like they will benefit rich people.
Blaming this on voters gives up the propagandists' game. A statement like "we'll make sure more houses are built to lower housing costs" does not sound like "we'll let business owners do business they otherwise wouldn't be allowed to do", even if they happen to describe the same policy.
I feel like US is too heavily weighted on incumbant "rent seeking" through law and policy. We were just in Tokyo and Seoul, the average costs of rents in New York City: ~$3,900 – $4,200 vs Tokyo: ~$1,200 – $1,350 and vs Seoul: ~$950 – $1,100. Renters will move if there are affordable newer options in cities instead of treating boomer asset holding rent seekers as a privileged class.
It is very common in Japan to have to pay key money when moving in, which is typically 1-2 months of rent. This isn’t like a security deposit as it is non refundable and is basically a “thank you for letting me live here”
Also if you are actually getting paid in Yen then the gap narrows between NY and Tokyo. Then there is the fact that your home could be destroyed in a massive earthquake but everyone has a different price for that risk
To add, renters not moving is a renter problem. It's a real estate owner benefit.
This is just the surface of the issue, housing market problem is far deeper, and even home “owners” aren’t actually owning with their perpetual property taxes, which is unlike rent, uncontrolled. To solve housing for everyone, the solution is simple, it’s not building new units, that’s temporary, it’s not more regulations on whatever, that doesn’t solve the root cause, you need to solve that root cause and that is houses are considered an investment, not a shelter, and investments are always expected to go up, obviously it will reach a point that having a few walls of plywood is like owning a merchandise, it doesn’t take a genius to find this. So the steps to solve the toot cause as follows:
- making housing as a depreciated asset, like a car, TV, whatever, it’s NOT an investment. Go invest and start a business that actually contributes to the economy instead of leeching on other’s wealth.
- ban interest rates on mortgages, so banks aren’t incentivized to pour fake numbers into accounts and deducting fake numbers from other accounts as debt all while enjoying the sweet real money from interest. Once that is ban, they won’t give loans based on speculated prices, ending the daisy chain of using another house to get a bigger loan to buy a bigger house based on fake speculated market value.
- relax the permits and regulations on owning and building houses, which is a big topic on its own.
Among many other points that goes after the root cause, not some duct tape solution, housing is a shelter not an investment, look up any human needs diagram and you will find shelter is at the bottom of it, you can’t be creative or do great things when you are not settling in a house, you can’t think about making a business and contribute to economy if you are paying most of your income to landlord who take that to pay a mortgage so the bank can take the interest. Things now seem calm but most the new generation don’t own a house or ever thinking of owning a one, these soon will be the majority of voting and decision making, and it will be a brutal reaction on boomers and the overall selfish system that do anything to make their lives more miserable.
So I'm Gen-X. Statistically speaking, I have more yesterdays than tomorrows. I can't even begin to describe how much of a dystopian hellscape the world has become and is becoming. Many my age describe the 1990s as the last good decade.
I lived in a 2 bedroom apartment in the 1990s for $200/month 3 miles from the city center. All my other expenses were less than another $200/month. The median house price was less than $80k. College graduate positions typically paid ~$30k but that was OK. This was pre-9/11 so all those old TV shows and movies you saw of people meeting people at the airport gate were very real. I've seen younger people think this was just a trope, like the 30 seconds the trace a call bit. No, that was real. Friends of a friend lived in Iowa and split a 4 bedroom house for $180/month. Not each, total.
For younger millenials and Gen-Z, I honestly wish you could've experienced this world, for no other reason than to see that things weren't always this way and don't have to be this way.
There's an old episode of the Cosby Show that had the father (Bill Cosby) teaching his son, Theo, about finances. It's funny watching it back now because it has the line "an apartment in Manhattan is going to cost you $400" and I remember thinking how expensive that sounded at the time.
The absolute worst thing that has happened is how hoarding housing has become a retirement plan. It's simply stealing from the next generation and it's absolutely strangling the economy. Society is fraying at the edges. For anyone interested, there's been academic work on this that falls under the label of "the housing theory of everything" eg [1].
But what I hate most is how cruel, selfish and stupid everybody seems to be getting, in part fuelled by increasing desperation to stay above the rising tide just a little bit longer. And the ultra-wealthy constantly throw gas on this fire and torch the planet for what? So they can have $200 billion instead of $100 billion? What good does that do you if there's nothing left? But what's crazy is that a third of the population will defend Jeff Bezos in this equation.
What you see in a lot of economic indicators (such as those posted here) can be read as people incradsingly see themselves as having no future. Continued consumer spending is not a sign of a healthy economy or optimism anymore. It's a sign of fatalism.
The entire thing is honestly deeply depressing.
[1]: https://worksinprogress.co/issue/the-housing-theory-of-every...
While I'm not glossing over real problems we have today (I'm also Gen-X), the 90s were not that great, you were just young and unencumbered. Healthcare was cheaper and more friendly, but not better for serious issues. There was such little information available about... everything? TV, Newspapers, and word of mouth, were about it. I'm surprised I made it where I am today with the random walk most of us took in life back then.