Why Adulthood Became So Expensive

About this video

• Video Title: Why Adulthood Became So Expensive
• Channel: CNBC
• Speakers: (Not specified in the transcript)
• Duration: 35:28

Overview

This video explores the increasing costs associated with adulthood in the United States, focusing on the challenges faced by younger generations in achieving traditional markers of success like homeownership and financial stability. It examines factors such as rising housing prices, student loan debt, and stagnant wage growth, contrasting the current economic landscape with that of previous generations. The video also touches upon declining fertility rates and their potential economic implications.

Key takeaways

• Housing Affordability Crisis: The cost of starter homes has dramatically decreased, with only 9% built in 2023 compared to 40% in the early 1980s. This, combined with rising home prices and mortgage rates, makes homeownership increasingly unattainable for young adults.
• Burden of Debt: Millennials and Gen Z face significant financial headwinds from student loans, car payments, and credit card debt, in addition to rising rent, making it difficult to save for down payments and other life goals.
• Shifting American Dream: The traditional markers of the American Dream, such as owning a home and starting a family, are becoming harder to achieve. The median age for first-time homebuyers has increased from 29 in 1981 to 38 in 2024.
• Economic Instability: Many Americans, particularly those in hourly jobs, experience income volatility. This, coupled with rising costs for essentials like rent, healthcare, and childcare, leads to financial precariousness, with many living "at break even."
• Declining Fertility Rates: The US fertility rate is below the level needed for population sustainability, with projections indicating that a significant portion of young adults may never have children. This trend has potential economic consequences, including impacts on the workforce and social security systems.
• Regulatory Hurdles: Restrictive zoning laws and regulations at the local level are cited as a major reason for the decrease in new starter home construction, making it difficult and expensive for builders to create affordable housing.
• "Phantom Wealth": While Millennials' net worth has increased on paper, many still live paycheck to paycheck, highlighting a disconnect between asset growth and actual financial well-being.