My 26-year-old son occasionally moans to me that “my generation will never be able to buy a house” — to which I raise my eyebrows and say “you might”. A further response is “things just aren’t the same as they were in your generation”. At which point, I stop trying to change his mind. He is right. Things are not the same as they were in my generation.
Yet, it wasn’t that way in the past and it doesn’t have to be that way in the near future. It isn’t unusual to look around and see a situation and not be able to imagine anything different. I have done blogs/newsletters on many closely related topics — income inequality, hope, apathy, entropy — but sometimes it is necessary to bring related topics together to address something specific.
Buying a house is a specific, and physical, issue that is closely related to income inequality, hope, and apathy.
Why do people say “I’ll never be able to buy a house”?
Most people rent. It used to be that most people owned (or held the lease and the bank held the property title) their house. In the US, in 2025, the average mortgage cost $2329/month. The average rent in the US, in 2025, was $1987/month. This is a $342 difference — not much. Admittedly, even not much may be too much for many.
With only a $300ish difference between renting and owning, why are so many renting? Some want to rent. Assuming you stay in the house for a number of years, a house is a great investment but it ties up a lot of money which could be used in other ways. It is also very “non-liquid”. Getting your money out of the house (equity) may be easy in a “sellers market” or difficult in a “buyers market” or if features in your house are no longer fashionable. I am sure there other reasons for people to prefer renting.
Requirements to buy a house beyond what is needed to rent
For those who would like to, but feel they cannot do such, there are two major hurdles. First is a down payment — usually 10% but sometimes 20% and, at times, down to 5%. The second, which is closely related to down payment requirements, is your “credit score”. A credit score is a fictitious number devised by credit companies. Companies that determine credit risk have their own arcane formulas. The minimum down payment required depends a lot on the economy and upon your credit score. This credit score also affects requirements for deposits on rentals and services (such as utilities). A third is being able to qualify for the loan — a mixture of income, credit score, savings, and other assets.
While the down payment is partially dependent on credit score, it still exists. For 2025, Bing says an average house in the USA is $522,200. With a good credit score, a 10% downpayment would be $52,220. There are also various one-time costs associated with buying a house, so let us say $60,000 is needed to buy an “average” house. If you started savings towards this total five years before, that would mean $12,000/year in savings. Or six months rent in savings instead of in a landlord’s pocket.
So, beyond requirements for renting, buying a house requires a good credit score, a down payment, and qualifying for the loan.
What has changed? Why have hopes to buy a house dwindled over the years?
There is a simple, quick answer — it is much more difficult to build up the savings needed. And, with the added difficulty, it is much easier to get discouraged and say “what the heck, I didn’t really want one that badly anyway”. The longer answer of WHY is sad but reversible with a LOT of work by MANY people.
Note that the credit score is tightly connected to savings and to a secure, reliable history of always paying bills on time. There are lots of details, of which some are secret and some are not very rational, but those are the primary needs.
Over the past 40 years (starting around the time of Ronald Reagan’s term of office in the US), real income (inflation adjusted dollars) has gone down for most workers. A result of the good old ridiculous “trickle-down” economic fantasy. Many people have written about minimum wage amounts, including myself here, but it is also true for those who make more than minimum wage. More people are earning less money and this makes it difficult to save. If you are living paycheck-to-paycheck it is virtually impossible to save.
There is a reason why so many people put that extra change into lottery tickets.
After World War II, there was a great push to build small, livable houses for the people coming home from the war and their families. These were called “starter homes” as it was recognized that most people would eventually want to move into larger houses. Nowadays, the idea has been revived in the concept of “tiny houses” — but many communities are very resistant to allowing these because they bring the average house price down (deflate the market). I will repeat — communities are resistant to building houses that more people can afford.
House sizes and house prices (per square foot) have gone up faster than general income. There are many fewer people who can buy a 3500 square foot house with a $80,000/year income nowadays than could buy a 1200 square foot house with a $15,000/year income in 1975. The house size (and price) has ballooned and the wages have stagnated.
In the US, Congress passed tax laws that allowed deductions for mortgage interest. This was very beneficial to those who lived at that time but having this advantage for house owners meant that houses were/are a good, usually stable, investment — which has led to home price inflation going up faster than cost-of-living and wages. In the past ten to fifteen years, with this being “such a good investment” — and lack of modification of tax laws to keep larger businesses, which have a lot of capital, out of the market — business funds have purchased more and more homes making ownership harder, affordable houses scarcer, and rental prices less flexible and higher.
So, a longer answer is —
real wages have decreased for most people in the US.
House sizes have greatly increased with few smaller houses available.
Corporations and larger financial institutions have taken advantage of tax benefits and loopholes to move house ownership away from individuals and families.
How can such a situation be reversed?
Once again, there is a short answer. Reverse income inequality and get tax and wage laws back to the era of pro middle-income/upper lower-income. The long answer is much harder as those that have benefited with changes over the past 50 years have a lot of power, are extremely greedy, and continuously want more. There are, of course, exceptions who give back to the community on a voluntary basis.
Income Inequality, wealth, wages, and savings
Here in the United States, we are enamored of our wealthy people. It’s been that way for a long time — perhaps since the beginning of the country. We don’t have lords and ladies, dukes and duchesses, kings and queens (though some would like to be). But we do have ultra wealthy people who have much, much more than they need or can use.
Many people admire those rich people. They sit on the sidelines and watch them, envy them, and cheer them on. It’s kind of like being at a racecourse and watching those speeding horses go by while cheering them on. “Rich people” include groups of highly overpaid CEOs and other C-class executives, inherited wealth, the rapidly dwindling “rags to riches” fantasy fulfillments, the financial market manipulators, and celebrities. I may never understand why celebrities are so highly paid — perhaps they are just exceptionally beautiful race horses such that people want to put wads of money into their harnesses.
The one category that should be expanded upon is “rags to riches”. It did use to be true that people could come up with an idea, dig in, save, and work their way to the top of the financial structure. They didn’t always do it fairly or legally — that is where the term “robber baron” came from. But it is mostly just a fantasy nowadays though it is firmly lodged into the national psyche.
Bill Gates came from an upper-middle (possibly lower-upper) income family, Mark Zuckerberg was at Harvard when he (with others) started the basis of Facebook — and he wasn’t a scholarship person, Elon Musk was part of a wealthy South African family. I won’t deny talent also but they started off WAY above the “rags” stage. Warren Buffett seems to have started his journey at a lower level than other rich “superstars” but he still didn’t start at the “rags” level.
So, who cares? However they did it, don’t they deserve it? Aren’t they a reasonable target for our own fantasies of achievement? Maybe — but their huge coffers are filled with what could be our savings and down payments. Tax and wage laws transfer what could, and should in my opinion, belong to the others.
There is NO “entitlement” to riches. NO ONE got rich by themselves. They may have started on their own (or with a few partners) but, after a certain point, they have to start leveraging the work and talents of others to keep climbing the wealth pyramid. An awful lot of the rich have forgotten, or firmly deny, this reality.
Here is an insanely simple example. A person with a company that has $10,000,000 of sales per year has 200 people working for them each making, on average, $25,000 per year. This leaves the person “owning” the company with $5,000,000 to put into their offshore accounts every year. If the wages were raised to an average of $40,000 per year, those 200 people would each have an additional $15,000/year for savings, education, a down payment, a vacation, or whatever and the “owner” of the company would still have $2,000,000 to put into their offshore account. That “offshore account” is also a major factor in that they quite likely are using various legal loopholes and methods to prevent proper taxes being taken from that $2,000,000.
The idea of “ownership” is a basic tenet of capitalism — but it isn’t written on the tablets with the Ten Commandments. The ability of the “owner” to pay their employees $25,000 per year rather than $40,000 per year is a matter of wage laws, inherent morality, and unions. Note that unions have suffered greatly over the past 50 years. There is no magic wand that says Bertha doing X work “deserves” $Y,000 a year in salary and benefits. It is ALL up to the society and the laws that are enacted.
So, how can the migration of wealth from the 98% to the 2% be reversed?
Once again, a simple answer first. Tax and wage laws need to be shifted back to favor the 98%. And unions need to be appreciated and supported with laws and by the community. There is not much to be done about people’s inherent morality or lack thereof.
Changing the laws
The wage and tax laws favor the rich because our legislators favor the rich when creating the laws. Some do this because they are among the rich — they have a lot of money and see nothing wrong with creating laws that will keep them accumulating excess money.
I “joke” about the rich owning our legislators. It seems that way but it is not quite that simple. Being elected to national office is a very expensive business (see why in my old blog here). It is easier for a candidate to have the money needed to be elected if they have rich sponsors. Those rich sponsors may, or may not, tell them how to vote and what laws to create or remove — but the elected officials are very careful not to antagonize their rich contributors because “how can they do good for people if they aren’t in office — and that means getting re-elected time and time again”? This is an excellent reason for term limitations. People who have held elected positions for a long time are very likely to do more and more to retain their position but do less and less of the things they originally wanted to do. Once again, exceptions do exist.
The rich have always had greater leverage but it accelerated horribly when the Supreme Court, very dubiously, ruled in favor of the rich in the Citizens United case in 2010. Although not explicit, this case allowed the rich to give (without disclosure) as much money as they wanted to candidates. It allowed the purchase of legislators. There really isn’t any other way to describe it.
So, the rich have a highly weighted influence on the US legislators and courts. There are also many other legal and economic benefits for the rich that are not available to the poor. Lastly, legislators who have been elected for multiple terms are more likely to value being re-elected than to be actively fulfilling their original desires for the citizens.
Primaries are key
Peacefully, the main method that US citizens have of truly changing our legislative base, and judicial appointments, is via the system of primaries. It IS possible to start new political parties but that is a much more difficult process than changing existing political parties from within.
The ruling structure within a political party have enormous advantages for electing the candidates that THEY choose. But, with a lot of hard work, it is possible to change the candidates running for office. It is possible to choose candidates that favor the general populace rather than the rich.
This is not easy but it IS possible. Without it, nothing more can be done. Tax, wage, and election laws will not change. You have to have legislators willing to work for the general populace and who are not scared of disrupting the status quo.
Once the legislative base has changed, what then?
We’ve really talked about all the parts but we’ll summarize here (not in any particular order):
Legislate enforceable ethics requirements for all branches of government.
Legislate term limitations.
Legislate enforceable limitations on campaign donations and require (down to the individual) visibility of all people donating.
Change the tax structure such that the 98% have a better chance to accumulate and save. The word “billionaire” should be so rare that people need to check their (online or print) dictionaries to know what it means. This includes changing tax rates and closing loopholes.
Change tax laws so that corporate ownership of property no longer has any advantage over investment of any other type of property.
Add citizen protection agencies that have the power, and political independence, to protect individual rights including unionization.
In some cases, creating effective legislation means approving Constitutional Amendments.
So, there we have it. Yes, it is much harder to buy a house now for most of us. But it didn’t use to be that way and it doesn’t have to continue to be that way. Primaries are key.
