Most Young Homeowners Have Rich Parents

Yet another big indication of America’s declining social mobility is the fact that most young people who are financially well-off are simply those already born into stable and prosperous circumstances. As The Atlantic points out, the majority of Millennials who enjoy the rare benefits of homeownership, higher education without crushing debt, or ample savings owe such prosperous standing to their parents and families.

To start with, most of those who continue their education after high school have families that are able to help financially. A recent report from the real-estate research company Zillow looked at Federal Reserve Board data on young adults aged 23-34 and found that of the 46 percent of Millennials who pursued post-secondary education (that’s everything from associates degrees to doctorates), about 61 percent received some financial help with their educational expenses from their parents.

And yet, even with this help, the average student with loans at a four-year college graduates with about $26,000 in student-loan debt. Millennials who are lucky enough to have some, or all, of a college tuition’s burden reduced by their parents have a leg up on peers who are saddled with student debt, and they’ll be able to more quickly move out on their own, and maybe even buy their own house.

To be sure, there is no shame in getting help from one’s family. But it is important to acknowledge one’s fortuitous circumstances, and the contributions of others — from loved ones to society as a whole — that helped make it happen. 

According to Zillow, 43 percent of Millennials who got help from their parents in paying for school were also able to become homeowners. According to Census data the homeownership rate for all young adults was about 36 percent in 2014.

Then there is the group that the Zillow study dubs “double lucky”. These are the select few whose families had enough money to not only help them with college, but to then also assist them with a down payment on a home. This group accounts for more than half of the Millennial homeowners in the Zillow’s data, though they account for only 3 percent of the total Millennial population.

It astounds me that anyone born into wealth, put through an expensive school, and had their tuition (or even their house) paid for, could believe that none of that had anything to do with their success. By all means, kudos to you for doing the most with what your parents and relatives gave you — no shame in that of course — but at least acknowledge the fair amount of luck that played a role in your success: being born in the right time, place, conditions, etc.

Such considerations go for me as well. If I had not been born comfortably middle class, with parents willing to sacrifice for me, I would have never been able to cultivate any intellectual interests. Indeed, it was Florida taxpayers that helped provide my state-sponsored scholarship, and funded the public school wherein I got the grades for said scholarship. Had I been into a worse familial or socioeconomic condition, who knows where I would be.

Moreover, this trends demonstrates some very troubling issues with the U.S. economy, namely the dearth of well-paying, full-time work, further worsened by ever-expensive tuition, healthcare, and housing. It is tough to make it ahead when you are being squeezed by stagnating, unstable income on one side, and costly basic expenses on the other (The Atlantic piece from where I pulled these excerpts goes into greater detail of this grim calculous.)

Granted, learning not to fall into the trap of hyperconsumption could help, though it would be quite difficult given the ubiquity and pervasiveness of advertising, and the social pressure of having to “keep up with the Joneses” with the latest goods. But even the most austere individuals will find themselves struggling to keep up with the skyrocketing cost of rent in most major cities. And what good is it to sacrifice quality of life just to scrape by with only basic needs, if even that? In such a wealthy country with healthy economic growth, such a miserable existence is not justifiable.

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