Stumbled across this nice article in London’s Daily Mail on how the 20-somethings and 30-somethings in the U.K. are becoming a “nation of mortgage slaves.” Given the extraordinary run-up in housing prices there, younger folks wanting to buy a house have to take on an enormous mortgage that they then struggle to repay.
I have to believe the same phenomenon is occurring in the U.S. I think about my own neighborhood here in Atlanta. Even though Atlanta hasn’t experienced the bubbly run-up that has occurred in south Florida, Washington and California, prices have risen steadily. Homes in my subdivision are about 50-60% higher than when I bought in 1998. And yet there’s been an influx of young couples, with young children, replacing the empty-nesters moving out. And given that a number moved from townhomes that they couldn’t have owned that long, and that couldn’t have sold for that much, you have to think they’re taking on enormous mortgages.
And the problem has to be even worse in cities like Washington. Friends of ours who are relocating to D.C. talked about a recent house-hunting trip. The wife was riding with their real-estate agent in the D.C. suburbs and she sees a park with lots of women watching kids playing on the playsets. Our friend, who intends to be a stay-at-home mom in Washington (her husband is getting a very nice promotion), says, "Oh! Here's a place I can come to meet other mommies!" The agent turns to her and says, "Those are all nannies. All the couples who live in this area have to both work to afford the mortgage."