If you aren’t sick of the word “Affordability,” 2026 will give you a reason to be so. The issue of the cost-of-living is number one in voters’ minds in nearly every poll. The Democrats believe this is an issue which will guarantee them victory in this year’s mid-term elections and later in the 2028 Presidential contest. The Trump administration has varied between calling it a hoax and suggesting things aren’t as bad as they seem. I recently read an interesting New York Times investigation about why young adults in America today think life is unaffordable. I would quote directly from the headline, but in case you don’t know, online headlines change, regularly. So here’s the article, and I insist you give it a quick read. Go ahead, I’ll wait.
The article failed to convince me. Not that the young people who were featured believe life is unaffordable; that much is manifestly clear. I don’t believe their feelings are factually correct. Here’s why.
In 1982, when I was released from the institution (some say graduated from the Academy, whatever), I had a steady job lined up with annual pay and allowances of US $17,000 (and I still have the 1040 to prove it). Yes, I did have free medical care, which was worth exactly what we paid for it. If you want to translate all that to today in constant dollars, it would come in right around US $100,000. So back then I was in a similar situation to the youngsters in the Times bemoaning today’s affordability.
What was different was my spouse was still attending college (a course here and there at first, due to our finances), and we had two children in the first three years of our marriage. No child-care dilemma there! So that “I’m waiting until I can afford to get married or have kids” refrain leaves me cold. Marriage or raising children is almost never a financially advantageous move, nor should it be measured that way. It reminds me of the cranky old man who says he doesn’t go to see a doctor because there are so many sick people there. Misses the point entirely.
What else was different back then? Inflation was coming down from 12.5% in 1980 and 8.9% in 1981. It would bottom out just around 4% for the next several years due to a good, old-fashioned recession. You know, the kind with an unemployment rate of over 10%! Compare that to today’s 3% inflation and 4% unemployment. Oh, and the federal funds rate (which drives mortgages and credit card rates) was over 10%, double today’s approximate 5%. Anybody who says the average young person’s economic outlook is worse today is either accessing medical cannabis, or didn’t learn any recent history.
So what causes today’s young adults to feel so aggrieved? Times are tough, and there is great uncertainty. But to believe life is so bad you have to move in with your parents? You can’t get married? You can’t afford to have children? What gives?
Housing
First, housing prices have skyrocketed, making that initial move into a home much more difficult. Not impossible, but certainly more difficult. Owning your own home puts you on the plus-side of the investment ledger, starting you on the way to financial independence. But you have to get that starter home, first. There are many starter home options available. But they’re not where today’s young adults want to live. In the Times article, one young single-man from Atlanta observes he can’t afford to live in his parent’s neighborhood, and the places he could afford to buy would involve a ninety minute commute and “he does not want to live that way.”
This is the essence of the home ownership challenge: you don’t start with the place you want, you start with the one you can afford. We started renting outside the beltway near Washington DC. Since we had one car, I took an hour-long commuter bus to/from the Pentagon each day. The only good thing to come from that was I learned how to get on a bus, fall asleep, then wake at my designated stop. To this day I don’t know how I did that. When we decided to buy, we had to settle for a fixer-upper townhouse even further out. We spent weekends painting and repairing the place, with our young children in one room with toys to keep occupied. They didn’t want to move there when we finished getting it ready, as they envisioned living there being just like those locked-in-a-room weekends!
It was far from ideal, but it got us started in a series of moves which eventually got us the nice suburban homestead with a big yard, then a smaller, closer-in townhouse appropriate for empty-nesting, and finally a very close-in concierge apartment for aspiring expats. Sometimes we made money on the house exchanges, sometimes we didn’t. But we had great places to live, which changed and improved over time. You don’t get to start next door to where you want to finish.
Adding to this is the desire to live in urban areas, which are more exciting and far more expensive. This is a lifestyle choice that hampers all others. Especially with the possibility of remote work (an option only available on scifi shows in the 1980s), living in a suburb or even a distant small town is a practical possibility. But it won’t be exciting. Cities in general have done a lousy job creating additional housing or rental properties in their urban centers, and there is little evidence that is about to change (Mayor Mamdani/the abundance agenda or not).
Social Media
Second, today’s young adults are force-fed unrealistic expectations in their social media diet. It’s rare for any influencer or even “friend” to cover how bad their job is, how crappy their relationships are, or how desperately poor they really are. Nope, on social media, everything is avocado-toast-on-the-way-to-hot-yoga-before-scoring-those-Taylor-Swift-tickets-while-planning-that-Caribbean-adventure-tour. Perhaps when meeting ftf (face-to-face) you might get more honesty from real friends, but who has time for that?
Those non-stop positive vibes online create a great FOMO (Fear Of Missing Out) which encourages young adults to chase ephemeral experiences as a means of alleviating the sadness at not being able to achieve the more important, longer lasting ones (owning a house, getting married, having kids). As the young Atlantan interviewed in the Times put it, “There’s a sense of futility at this point. I’m not going to rough it for five years to save for a house I’ll never be able to afford. So why not live my life the way I want to?” The Times even mentions a University of Chicago study which finds that such house-despondent young adults are more likely to spend money on leisure pursuits or risky investments. Which is another way of saying they are making conscious choices which preclude them from obtaining the things they really want to get. Funny how it sounds both judgmental and accurate when you put it that way.
Options
Third, most people would agree that having more options is good. But it can be bad. If your options constantly expand, they can change from options to requirements. Perhaps you’ve heard it put “needs versus wants.” Back in Reagan World, cable television had only a few channels (cable news, sports, music videos being the most popular) and cost about US $10 a month. This in itself was an increase in options over the 1960s three over-the-air broadcast networks and some part-time local public station. We were forced to watch a limited variety of “hit” shows like Dallas or M*A*S*H, which only aired once a week, with a season that started in September and ended in April. And if you missed a show, reruns weren’t available until Summer! Somehow, an entire nation survived.
Today, there is an unlimited supply of televised material, mostly dreck. There are apps to help consumers understand when they might have multiple subscriptions to the same service, or zombie subscriptions they simply never cancelled. Needless to say, almost everybody is spending more than the US$33 (in constant dollars) equivalent to the 1980 cable cost. We have options to the point we can no longer rationally choose among them. Now you hear about a hot new show, subscribe to the service, binge-watch it, then move on to the next recommendation, show, and subscription.
And here I have only touched on televised material as an example. Want on-demand music? Check. Want on-demand meals from different restaurants delivered at the same time? Check. Want robo-drones flying your latest Amazon package to your door within the hour? Check. The problem with these options is that the convenience becomes addictive. What once was a cool, occasional option now becomes a way of life, and the costs add up.
Finally, I question the reality portrayed by the youth in the Times article for one more reason: my anecdotes, or as I like to call them, my grown daughters. They are slightly beyond the young adult stage described by the Times, but as leading-edge Millennials they matured through many of the same conditions. They followed very different paths, but got married and had kids quickly by today’s standards. One did the stay-at-home Mom routine evolving into part-time office work, the other followed a professional career path. They and their spouses economized, made rational (not exciting) choices on where to live and work, and had purchased homes before they were each thirty. They somehow eluded all the angst and bad choices which were haunting the Times’ subjects. They stand as stark counter-examples to all those who say it just can’t be done anymore.
To which I would respond, “it can’t be done easily today, and it never could.” The important things in life (a loving spouse, kids, a home of your own) are both costly and priceless. You either recognize that and sacrifice to achieve them, or you don’t achieve them. If you choose the latter option, it’s not on the generation ahead of you, the economy, or bad luck. It’s on you.