Homes and Cars Have Skyrocketed in Price

New data shows that the median age of first-time home buyers has reached a record high while the prices of new cars have multiplied, shifting the demographics of the American Dream.

Why It Hurts: The price tags on homes and cars are so unsustainably high that most young people have no chance of affording them without major financial help.

Behind The Payments: Everyone’s going to need a pay raise soon.

• The National Association of Realtors found that only 24% of homebuyers this year were first-timers and that the median age of a first-time buyer hit 38 — nearly 10 years older than in the 1980s.
• The median income for a first-time buyer increased $26,000 to an annual salary of $97,000… and a quarter of them needed to borrow or be gifted money from family or friends to afford a down payment.
• Car costs are also breaking the bank, with the prices of new vehicles jumping 21% in the past five years to an average monthly payment of $767, forcing 73% of drivers to stall on buying new ones.
• And pre-owned cars aren’t much more affordable, with prices accelerating 32% in five years to an average monthly payment of $549.

The Future: There are several reasons for the wild jump in prices — supply crunches, high interest rates, etc. — all of which will take some time to fix. That is, if companies want to fix those issues. The luxury real-estate market is enjoying record highs while automakers have made more money on selling fewer cars at higher price points. Those returns don’t incentivize making homes or cars more accessible. But, companies that can build a successful revenue model on servicing those with a budget would likely find plenty of customers for years to come.