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Her parents bought the house in the 1980s for $60,000. Now worth $800,000. When she brought up the impossibility of affording anything similar, they told her to “save more money” or “stop wasting money.” This advice makes sense if you assume nothing has changed, but not if you’ve looked at the mortgage calculator of the century.
She posted the question on Reddit’s r/NoStupidQuestions: “Why do so many older people insist that buying a home is just a matter of ‘working hard’ when they bought it decades ago for a price tied to normal income?” She’s not asking for pity or a fight – she’s hoping someone can help find a way to explain the disconnect without seeming ungrateful.
One commenter analyzed it mathematically. Their parents bought a house for $27,500 – about two years’ total income at the time. “Granted, interest rates were 12 to 14 percent,” they wrote, “but they still paid it off in about 12 years.” In other words, even high interest rates couldn’t stop ordinary people from buying and owning homes outright. Not fast. But reasonable.
Another noted that maintaining the same affordability today would require an income of $300,000. Someone else replied: “Buy a house with two years of total income? This really makes me speechless.”
One self-described baby boomer responded with rare clarity: “They can only see what works for them. They can’t understand why it doesn’t work for you.” He concluded: “I’ve made up my mind, don’t confuse me with facts.”
Other users pointed out that the struggles now don’t match the struggles then. One person said: “Old people see young people with beautiful smartphones, looking fashionable and carrying takeaway coffee, and they think we spent our down payment on entertainment.” But mobile phones have become cheaper. Housing does not.
At one time, the average housing cost in the United States was about 2.5 times typical annual income. In 1985, for example, the median home price was about $82,800, while the median household income hovered around $33,600. Fast forward to today, and that ratio has tripled. The median price of a home is now about $420,000, while the median household income is just under $59,000, nearly 7.3 times. In major metropolitan areas, this ratio often exceeds 10 times. This is not a gap. That’s a gap. And the number of canceled streaming subscriptions won’t exceed that number.
That’s why she added, only half-jokingly: “A few days ago, I was playing Jackpot City and I was joking with my friends that we needed to win big money to be able to afford a down payment. It was frustrating how serious the joke was.”
One woman said her parents-in-law bought a house in the 1990s for $150,000. Now it’s worth $2.5 million. She and her husband made the same income as her parents, adjusted for inflation, and they spent $1.2 million to buy a smaller home in a worse neighborhood. Meanwhile, her mother-in-law still suggested they should cut back on their spending.
Which brings up another point: Her parents’ home not only provided them with shelter, it also made them wealthy. They establish equity by being in the right place long enough. This appreciation is hard to come by without action, but some investors are looking for ways to take advantage of it. One example is Arrived Homes, which allows people to invest in fractional shares of residential equity. Investors don’t own the homes—they share in the rise and fall in value over time. If a property receives $300,000 in equity, the investor will participate in that gain. If it loses value, the risk is shared.
This is not a traditional real estate investment. It has access to the one thing this Reddit poster doesn’t: appreciation itself.
She’s not saying her parents didn’t earn what they had. She said they earned the honor in a market that responded to the effort. The same cannot be said for the people she interacts with.
Real estate is a great way to diversify your investment portfolio and earn high returns, but it can also be a big hassle. Fortunately, there are other ways to harness the power of real estate without owning the property. Arrived Home’s private credit funds have historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate. The best part? Unlike other private credit funds, the minimum investment in this fund is only $100.
This article Millennial says her parents spent $60,000 on a house now worth $800,000, but claims it was to “work hard” — while she needed to win the jackpot to afford the down payment originally appeared on Benzinga.com
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