The internet lit up like a Christmas tree after Australian Millionaire Tim Gurner spoke to his country’s 60 minutes about Millennials not being able to afford buying a home because of frivolous luxury purchases like smashed avocados on toast for breakfast.
And there’s no argument that not saving properly means you can’t afford a down payment. But let’s not forget that not long ago Starbucks Latte’s were the reason Americans were penniless failures. David Bach’s Latte Factor calculator showed us how much money we could save if we just dropped the daily coffee run. And let’s remember that the math doesn’t add up.
But we do see a problem though: Millennials home ownership in the US has been steadily declining over the last decade, with nearly a third of young people still living with their mom and dad.
Jonathan Smoke, chief economist for Realtor.com, speaks towards Millennials and home ownership:
“Long term, homeownership is a key part of household wealth creation. If young people are not getting into homeownership at the same stage, it’s going to put them further behind from a wealth and retirement perspective.”
Not to mention the entire housing ecosystem, as Smoke refers to it, falls apart if the cycle of upgrading and then eventually downsizing homes ceases.