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Unless this 24-year-old couple has some very wealthy and generous parents, they could not afford the same house that I afforded long ago.
My wife was a secretary in the office of Senator Hugh Scott. I was a US Navy 2nd class petty officer working at Bupers. We each cleared $500 per month.
Navy 2nd class petty officer working at Bupers
The Bureau of Naval Personnel (BUPERS) in the United States Department of the Navy provides administrative leadership and policy planning for the Office of the Chief of Naval Operations (OPNAV) and the U.S. Navy at large. BUPERS is led by the Chief of Naval Personnel. The command's name changed to the Bureau of Naval Personnel on May 13, 1942, and in 1982 it changed to Naval Military Personnel Command. In 1991, the name changed back to BUPERS.
The U.S. economy looks brilliant on paper. GDP grew by more than 5% for the last quarter. Unemployment is at 3.9%. There are "help wanted" signs everywhere. The stock market looks great.
Social media posts from young people were shown. To make a long story short, they complained that they could not afford a car, rent, or purchase a house.
Let me focus on buying a house. I bought my first house at 1945 Storm Drive, Falls Church, Virginia in February of 1972. I was 24 years old. I paid $22,000 US for the house. I got a no-downpayment loan with monthly payments of $200. My first wife and I had a combined income of roughly $1,000 per month. Our house payment was 20% of our monthly income.
Let us fast forward almost 52 years to now. According to Redfin, my first house is now valued at $733,217. If a young couple aged 24 wanted to buy this house, they most likely would get what is called a conventional loan. A 20% down payment would be required. This would work out to be roughly $146,643. The balance of the 30-year mortgage would be $586,573. That loan would have an annual interest rate of 7.877% assuming that the couple had good credit. The monthly payment would be $5,905 per month plus property tax of $1.32 per $100 of assessed value. We can estimate a final payment of $6,300 per month. With a 25% mortgage payment to income ratio, we have a final monthly income of $25,200 or $302,00 per year.
The numbers tell the whole story. For example, let us assume that the couple is two recent MBA graduates. They might have a combined salary of $200,000. Unless this 24-year-old couple has some very wealthy and generous parents, they could not afford the same house that I afforded long ago.