The American Dream Might Be Financial Suicide For Young People

It’s past time to rethink how we view housing [View in browser]( [The Juice Logo] BROUGHT TO YOU BY: [Logo]( Proprietary Data Insights Top Residential REIT Searches This Month Rank Ticker Name Searches #1 [MAA]( Mid-America Apartment Communities 2,056 #2 [AVB]( AvalonBay Communities 1,757 #3 [EQR]( Equity Residential 1,710 #4 [INVH]( Invitation Homes 1,206 #5 [ELS]( Equity LifeStyle Properties 1,200 #ad [Retirement help at your fingertips]( Brought to you by [Stansberry Research]( [A.I. is a Tidal Wave - Here’s What to Buy]( [ Stansberry Research - A.I. is a Tidal Wave - Here’s What to Buy]( Microsoft’s CEO Satya Nadella says A.I. is a “tidal wave.” One with even more potential than the internet. This is a huge claim. The internet generated more wealth than any other innovation in history - creating hundreds of thousands of new millionaires in America alone. Now A.I. could do the same. But if you’re buying Microsoft or NVIDIA to profit - you’re missing the big picture. After 50 years on Wall Street, I’m going public with another way to profit on the coming $7 trillion A.I. boom. This method has already uncovered multiple stocks that have gone up 100%, 200%, and even 300% (flying past NVIDIA, one of the top A.I stocks of 2023). And it just isolated another company. It’s an under-the-radar stock that already has a lucrative partnership with Microsoft - but has far more potential in the days ahead. To get its name and ticker symbol for free [Click here to know more]( The American Dream Might Be Financial Suicide For Young People The sword has never been more double-edged. On one hand, there’s the cost of home ownership. As we have long established here at The Juice, [it’s absurdly unaffordable and only set to get worse](. With the interest rate on a 30-year mortgage still higher than 7%, the monthly payment on a $500,000 home, including taxes and insurance, comes to around $3,358. And that’s with a 20% down payment. To afford that monthly outlay without dropping more than 30% of your income on housing, you need to earn at least $11,193 a month, or more than $134,000 a year. Just to get in the game you need six figures saved (up front) and earned (ongoing). In recent days the New York Times has been all over the rerelease of its rent or buy calculator. We have no problem with the Times, other than the fact that you can’t read anything they publish these days without paying. But, we know from social media that this calculator shows that, in more cases than not, you’ll save more, even over the long haul, by renting rather than buying these days. The Juice doesn’t need a calculator to figure that out. When you factor in a hefty down payment, outsized monthly mortgage payment, taxes, insurance and other home ownership costs, such as planned and unplanned maintenance, there’s little question that you’re most likely better off with one rent payment, especially if: - You live in an even somewhat expensive market - You make less than $100,000 and want to have a life - You’re super young and don’t want to live for your mortgage payment - You’re relatively old and don’t want to die with a mortgage payment All fine and good, if not obvious (at least obvious to long time readers of Da Juice). But this is where this untenable double-edged sword enters the equation. The other day we read a story out of the UK that basically said an increasing number of people there are taking on longer mortgages. By doing this they can “afford” home ownership, thanks to the lower monthly payment that results from a longer term. But, of course, this also means a more expensive loan over the long term. Plus, as the story [notes](, “Hundreds of thousands of homeowners have taken out mortgages in the last three years that they will still be paying off into retirement, estimates suggest” (emphasis added). So there’s that. And there’s also this. Let’s say you’re young and you’re dead set on realizing the American dream of home ownership. Let’s also say that because of the aforementioned cost of it, it will take you longer to attain it. So, instead of buying, say, when you’re 28 or 32, you have to wait until you’re 35 or 38. Instead of having a 30-year mortgage paid off by the time you’re 60 (which doesn’t even sound all that attractive), you’re looking at closer to 70. Super precarious. While we have thought this even during more affordable times for home ownership, The Juice that, unless you’re buying in a super cheap city such as Detroit or Cleveland, most of us would be better off renting and putting the money we save into the stock market. Hopefully — and this is a big hopefully — you’ll save enough cash to be able to cover your rent and live well during retirement. It’s a big hopefully because rent, particularly in nice neighborhoods and cool apartments, rent isn’t cheap either. We spend a lot of time on the websites of some of the names you see in today’s Trackstar top five. Residential REITs (that’s [real estate investment trust]() that own and operate apartments and other rental homes. Consider the cost to rent an apartment in one of the communities AvalonBay (AVB), the second most-searched residential REIT across our 100+ financial media partners, manages. In suburban LA (the valley), a freaking 400 square foot studio apartment starts at about $2,000! Headed into the City of Los Angeles and you can’t touch a one-bedroom for less than $2,500. And you’re generally talking closer to, if not more than $3,000. Things get a little better in less expensive markets. For example, a one-bedroom from AVB will cost about $1,300-$1,400 in Charlotte, North Carolina. Same price in Frisco, Texas, which is just outside of Dallas. A two-bedroom comes closer to $1,800. Meanwhile, the median list price on a home in Frisco, as of April 2024, is $744,500. A mortgage payment on the typical home in Frisco then will be about $5,000 a month. Unaffordable. Untenable. Financial suicide. [Navigating Market Volatility: The Alt Advantage]( Amidst market uncertainties, eyes are on Real Estate & Private Equity. Hedge against inflation and stay ahead with The Alt's Alternative Investment insights. [Subscribe for FREE and be in the know about the latest trends shaping the investment landscape.]( The Bottom Line: Many people, like it or not, will have to recast their vision of the American dream. Or refer to achieving a life you can be happy with and comfortable in as something else entirely. While it might suck (in the minds of some people) to live in an apartment, a large number of people have no choice. Are you going to pay $5,000 a month (after a $150,000 down payment) for the typical home in Frisco, Texas? Or are you going to go with the relatively easier option of paying $2,000 a month and not having to deal with other costs for shelter? We’re destined to become a nation of renters. Renters living in less expensive pockets of the country and individual metropolitan areas. If you want to be a homeowner on a modest, sub-$100,000 salary, your affordable options are increasingly few and far between. 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