Mon. Jul 22nd, 2024

A millennial who moved from California to Virginia after her monthly rent increased by $1,500 says the reason her generation can’t afford to buy homes is because everything is too expensive<!-- wp:html --><p>Couple walking barefoot on beach with coffee in hand in San Diego, California.</p> <p class="copyright">Seyhan Ahen/Shutterstock</p> <p>Nicole, 35, was a renter in California for years. Then her family's rent went up.They couldn't make the $1,500 increase work, so they moved to Virginia. Nicole is an example of how millennials are contending with high costs and pay that hasn't kept up.</p> <p>For a few years, Nicole was living the California dream. She was making enough money to enable her spouse<strong> </strong>to stay home with their children.</p> <p>It's something that they never dreamed they'd be able to do, Nicole, a 35-year-old whose last name is known to BI but withheld over privacy concerns, said. They were also able to rent a moderately sized house in a nice neighborhood close to San Diego city limits in Orange County.</p> <p>Then, in 2022, they got the news that would make renters everywhere shiver:<strong> </strong>The rent on their 2,300-square-foot house was going up from a little under $3,500 a month to just over $5,000 a month.</p> <p>"We were just like, we just can't do it anymore. Literally, we can't afford a $1,500 a month increase in rent," Nicole, who works in advocacy, said.</p> <p>It was<strong> </strong>a rent hike that broke the dam for them and some of their peers. In <a target="_blank" href="https://fred.stlouisfed.org/series/CUUR0000SEHA" rel="noopener">summer 2022</a>, rent inflation<strong> </strong>was almost 7% higher than the year prior. Once they began talking to their friends about just how costly it was, friends began to reveal they were in a similar position — and started to scatter across the country.</p> <p>Nicole and her family decided to leave. It just wasn't feasible for them anymore, "which was really heartbreaking because we were in walking distance of the elementary school that my son was supposed to go to." They moved the summer before he started kindergarten.</p> <p>"We had done orientation there. We had been taking him to play on the playground there so he could get acclimated to it," she said. "We were like, 'Just kidding. We have to move across the country now.'"</p> <p>It's a story that's playing out for renters nationwide, especially those in California. The Golden State is becoming particularly inaccessible for younger homebuyers, who have seen their homeownership rates tumble over the last few decades.</p> <p>A <a target="_blank" href="https://ternercenter.berkeley.edu/wp-content/uploads/2023/05/Homeownership-Ladder-May-2023-Final.pdf?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosam&stream=top" rel="noopener">paper</a> from the Terner Center for Housing Innovation at UC Berkeley found, looking at 2020 data, that homeownership rates among 25- to 45-year-olds have <a target="_blank" href="https://www.businessinsider.com/california-real-estate-housing-millennial-homeownership-population-shrinking-2024-1" rel="noopener">plummeted the most out of all age groups since 1980</a>. If housing prices in the state had remained commensurate with the rest of the country over the last 20 or so years, it could have averted half the decline in California's homeownership rate.</p> <p>And, as BI's Noah Sheidlower reported, <a target="_blank" href="https://www.businessinsider.com/moving-from-california-pros-cons-texas-millennials-gen-z-single-2023-12" rel="noopener">the typical mover out of California</a> is likely a Gen Zer or a millennial. Those former residents are setting out for places like Florida, Arizona, and Texas.</p> <p>After staying with family for a few months in Florida to get their feet under them and build up some savings, Nicole and her family decided to move somewhere that better suited their needs. In the summer of 2023, they landed in Richmond, Virginia.</p> <p>Compared to California, it's a "lovely move in the right direction," she said.</p> <p>"I remember during the pandemic, gas prices got up to $7 a gallon where we were living," she said. Food costs were hefty in California, too: She joked that just crossing<strong> </strong>the threshold of a grocery store cost<strong> </strong>$185.</p> <p>"I would say Richmond is much more reasonable in terms of cost of living. Rent is what I would consider within normal limits — groceries, gas, utilities, all that stuff. It's much more affordable for us here," Nicole said.</p> <p>Median gross rent in Richmond was $1,192 in 2022, per the <a target="_blank" href="https://data.census.gov/table/ACSDP1Y2022.DP04?q=dp04&g=050XX00US06059_160XX00US5167000" rel="noopener">Census Bureau's American Community Survey</a>, compared to $2,251 in Orange County, California.</p> <p>Nicole said she'd love to stay in Richmond, although she's not sure if homeownership will be in the cards for them.</p> <p>When it comes to fellow millennials who are stuck in a similar position, Nicole takes some comfort in knowing that this situation isn't unique. She and her husband did things they were supposed to do — got their degrees, went to law school — and yet, here they are.</p> <p>"You go to school, you graduate, you get a good job, you get a house. That's the path we thought we were on," she said. "And then between our combined student loans and the cost of living and buying these days, it's just not happened for us yet."</p> <p>She also wishes older generations understood that millennials are dealing with compounding economic issues. After all, many millennials <a target="_blank" href="https://www.businessinsider.com/millennials-say-they-cant-afford-dream-life-survey-2022-1" rel="noopener">feel like</a> they'll never make enough money to get what they want in life, and <a target="_blank" href="https://www.businessinsider.com/boomer-millennials-debt-financial-security-interest-rates-recession-savings-2023-11" rel="noopener">their sense of financial well-being is tanking</a>.</p> <p>"I would say that almost every millennial I know, myself included, is remarkably hardworking and conscientious and responsible and that it's not a matter of not saving enough or not being smart with our money or not finding our bootstraps. It's that life has gotten so expensive," she said. "Groceries are more expensive, gas is more expensive, rent is more expensive. Interest for a mortgage is not going to probably be below 7% anytime soon."</p> <p><em>Are you a millennial or Californian (or both) struggling to find or afford housing? Did you move in order to cope with inflation? Contact this reporter at </em><a target="_blank" href="mailto:jkaplan@insider.com" rel="noopener"><em>jkaplan@insider.com</em></a><em>.</em></p> <div class="read-original">Read the original article on <a href="https://www.businessinsider.com/california-real-estate-millennial-rent-inflation-homeownership-cost-of-living-2024-1">Business Insider</a></div><!-- /wp:html -->

Couple walking barefoot on beach with coffee in hand in San Diego, California.

Nicole, 35, was a renter in California for years. Then her family’s rent went up.They couldn’t make the $1,500 increase work, so they moved to Virginia. Nicole is an example of how millennials are contending with high costs and pay that hasn’t kept up.

For a few years, Nicole was living the California dream. She was making enough money to enable her spouse to stay home with their children.

It’s something that they never dreamed they’d be able to do, Nicole, a 35-year-old whose last name is known to BI but withheld over privacy concerns, said. They were also able to rent a moderately sized house in a nice neighborhood close to San Diego city limits in Orange County.

Then, in 2022, they got the news that would make renters everywhere shiver: The rent on their 2,300-square-foot house was going up from a little under $3,500 a month to just over $5,000 a month.

“We were just like, we just can’t do it anymore. Literally, we can’t afford a $1,500 a month increase in rent,” Nicole, who works in advocacy, said.

It was a rent hike that broke the dam for them and some of their peers. In summer 2022, rent inflation was almost 7% higher than the year prior. Once they began talking to their friends about just how costly it was, friends began to reveal they were in a similar position — and started to scatter across the country.

Nicole and her family decided to leave. It just wasn’t feasible for them anymore, “which was really heartbreaking because we were in walking distance of the elementary school that my son was supposed to go to.” They moved the summer before he started kindergarten.

“We had done orientation there. We had been taking him to play on the playground there so he could get acclimated to it,” she said. “We were like, ‘Just kidding. We have to move across the country now.'”

It’s a story that’s playing out for renters nationwide, especially those in California. The Golden State is becoming particularly inaccessible for younger homebuyers, who have seen their homeownership rates tumble over the last few decades.

A paper from the Terner Center for Housing Innovation at UC Berkeley found, looking at 2020 data, that homeownership rates among 25- to 45-year-olds have plummeted the most out of all age groups since 1980. If housing prices in the state had remained commensurate with the rest of the country over the last 20 or so years, it could have averted half the decline in California’s homeownership rate.

And, as BI’s Noah Sheidlower reported, the typical mover out of California is likely a Gen Zer or a millennial. Those former residents are setting out for places like Florida, Arizona, and Texas.

After staying with family for a few months in Florida to get their feet under them and build up some savings, Nicole and her family decided to move somewhere that better suited their needs. In the summer of 2023, they landed in Richmond, Virginia.

Compared to California, it’s a “lovely move in the right direction,” she said.

“I remember during the pandemic, gas prices got up to $7 a gallon where we were living,” she said. Food costs were hefty in California, too: She joked that just crossing the threshold of a grocery store cost $185.

“I would say Richmond is much more reasonable in terms of cost of living. Rent is what I would consider within normal limits — groceries, gas, utilities, all that stuff. It’s much more affordable for us here,” Nicole said.

Median gross rent in Richmond was $1,192 in 2022, per the Census Bureau’s American Community Survey, compared to $2,251 in Orange County, California.

Nicole said she’d love to stay in Richmond, although she’s not sure if homeownership will be in the cards for them.

When it comes to fellow millennials who are stuck in a similar position, Nicole takes some comfort in knowing that this situation isn’t unique. She and her husband did things they were supposed to do — got their degrees, went to law school — and yet, here they are.

“You go to school, you graduate, you get a good job, you get a house. That’s the path we thought we were on,” she said. “And then between our combined student loans and the cost of living and buying these days, it’s just not happened for us yet.”

She also wishes older generations understood that millennials are dealing with compounding economic issues. After all, many millennials feel like they’ll never make enough money to get what they want in life, and their sense of financial well-being is tanking.

“I would say that almost every millennial I know, myself included, is remarkably hardworking and conscientious and responsible and that it’s not a matter of not saving enough or not being smart with our money or not finding our bootstraps. It’s that life has gotten so expensive,” she said. “Groceries are more expensive, gas is more expensive, rent is more expensive. Interest for a mortgage is not going to probably be below 7% anytime soon.”

Are you a millennial or Californian (or both) struggling to find or afford housing? Did you move in order to cope with inflation? Contact this reporter at jkaplan@insider.com.

Read the original article on Business Insider

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