Reply to Housing and young people – why is this not a solution?

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[quote=Anonymous]We all hear about inflation, housing costs in the DC area, and the hardships that face young people. But is this really so dire?

Let’s say you have a young person who lives at home with their parents after graduating college, from age 22 to 30.  And let’s say their income averages $100,000 per year over that time (starting at $80-90,000 and ending up at $110-120,000 at age 30).

Of their $100,000 income, they pay $25,000 in taxes and only need to spend another $10,000 per year since they are living at home. That means they can save on average $65,000 per year—or $520,000 over the eight years (ignoring any potential investment gains).

That’s enough for them to buy a $400,000 condo in cash (or use that amount as a huge down payment if they’re getting married and need to buy a house instead). On top of that, they have enough to buy a solid $25,000 car, furniture for their new place—and still have enough left over for an emergency fund and maybe even some investments. That sounds like a pretty darn good place to be in as a 30-year-old.

Obviously, that only works under certain conditions.  First, the kid has to major in something marketable.  And the parents have to live in the same area and be at least middle-class/upper middle-class—but that describes most of the DCUM demographic. Thoughts? Why isn’t this the solution?[/quote]

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