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Real estate broker breaks down why middle class millennials and Gen Z can't afford housing

"It's fine...we just have to stop getting our fancy coffees and we can afford it."

Photo credit: Canva

Real estate broker explains why Millennials can't buy houses

There's a housing crisis in America. It's not that there aren't houses available. Thousands of houses and apartments sit empty across the country, but the price for housing has reached levels that seem unsustainable for the middle class and those classified as working poor. Some might argue that middle class is now the working poor, though their yearly salary says they should be able to fair just fine.

Unfortunately, what used to be considered a decent salary for a middle class family to live comfortably is now barely enough to scrape by given the cost of housing. But some people from the boomer generation still struggle to understand why millennials and Gen Z can't afford housing.

Freddie Smith, a real estate broker, took to social media to explain why younger generations are struggling to purchase a home when their parents didn't. The real estate finance lesson was prompted when a baby boomer pointed out, "Don't forget we had 13% interest rates in the 80s."

A 13% interest rate seems like insanity upon first glance, but after Smith breaks it down, it doesn't look so bad. "I wish we had 13% interest rates if we had your home prices," the broker says before breaking things down.

Smith quickly starts speaking in numbers, revealing that in 1980 even with their yearly salary being only $22K with the 13% interest rate, their monthly payment only equaled to 26% of their monthly income. If millennials had the same circumstances, their median yearly salary would be $80k, their median price of a home $170K, and with a 13% interest rate the monthly payment would be $1,790–only 26% of their monthly income.

But that's not the reality that Millennials and Gen Z live in. While the median salary is $80k, the median price of a home is $419K, and while the interest rate in 2024 is 7%, with the housing price so high it would make the monthly payment 42% of their monthly income.

Smith wraps up the video saying, "And here's the kicker. Someone making $80K in most cases can't even qualify for this."


@fmsmith319 1980 vs 2024 home prices and interest rates
♬ original sound - Freddie Smith


That certainly put things in perspective for people. The video was flooded with comments from exhausted and frustrated millennials.

"Oh and the wives got to stay home and care for the kids now we pay another $1600 a month for daycare for us both to work," one person laments.

"Imagine if we had 140K homes with 13% rates. The gaslighting from them is WILD. I’d take 14% rates if the average home was only 140K," another says.

"It’s fine.. we just have to stop getting our fancy coffees and we can afford it," someone writes.

"We’re facing a 5K payment with 10% down on the average home. Same house cost 3K a month in rent. So we’re renting indefinitely at the moment," a commenter shares.

But this isn't just an issue in America. There were people outside of the U.S. sharing their astronomical cost of an average family home.

"Same here in Oslo, Norway. By dad bought his house for $22,500 in 1972. He’s selling it now for $1.75 million. And of course he says just this. 'You just have to spend less and work more.' Lol," someone shares.

"It’s worse in Australia. Average salary $80k average house price $1m," another writes.

While Smith doesn't offer a solution, his breakdown may help older generations understand why their children and grandchildren aren't buying homes. One can only hope housing prices go down or wages significantly increase so the middle class can afford a little more than their basic needs on top of being able to buy a home.

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Pop Culture

People share 'weird' ways they make extra money that are surprisingly easy and lucrative

Some side hustles make an extra $400 to $500 a pop.

Canva

We could all use a little extra cash.

Living is expensive, as we are all very, very aware. And for many of us, one job's wages aren't going to cut it, forcing us to get creative when it comes to making a little extra money.

In some ways, necessity really is the mother of invention. Nearly every niche talent, interest and/or skill set can be turned into a profitable business. Have a knack for finding cool, unique things at Goodwill? Sell them online. Willing to do simple chores that others can't be bothered to complete? Offer those services. The world is your capitalist oyster.

In other ways, society is a serpent eating its own tail. When people are all but forced to squeeze a penny out of every moment just to make ends meet or dare to try to make life better for themselves, then suddenly the only value registered is monetary value. That causes potential soul-nourishing hobbies to be drained of their magic by constantly trying to turn them into a "brand," never pursuing certain hobbies in the first place for fear that they won't make money, chasing get-rich-quick schemes out of desperation, following less-than-virtuous business practices…the list goes on.

But let's focus on the former for today.

Recently, u/bigdope-smallgirl asked folks on Reddit to share the 'weirdest' ways they make money. In a world where it seemed like we've seen every side hustle in existence, the answers were quite unexpected, not to mention lucrative, with some gigs raking in an extra $400 to $500+ a month. Perhaps most surprising of all—only one person seemed to mention selling pictures of their feet.

Here's what they had to say:


"I had a plumbing backup and needed someone with a snake to clear the line. I looked on Craigslist, and everyone was charging $99 for the snaking. This one guy advertised for $69. I called him, he came, and he had my line clear in 20 minutes. We got to talking. He and his family had just come in from Ohio a couple of weeks before because their 8-year-old daughter needed medical treatment that was only available in Tampa. Before he left Ohio, he had bought a used electrical plumbing snake for $400. Upon arrival, he was instantly busy with snake jobs because his price was the lowest on all of Craigslist. According to him, he was making about $400 per day, and he was working it seven days a week. Good money in it once the initial investment is made, but of course, it is not a glamorous job."

via GIPHY

—u/georgepana

"I host trivia. It’s a few nights a week for two and a half hours a night. It’s $50 each night plus the different venues hook you up with deals on food and drinks. Like, one place you get a free meal, which you can use for these giant pizzas that are normally $25. Or at another place, I get free drinks. It’s pretty chill, and I make about $500 a month. It helps." —u/hothouseflowers


"Once a month, on a Friday night, I host a parents' night out and babysit overnight. I still have a swing set, a tree swing, and such so kids come to my home. I charge around $50 a child and I serve dinner and dessert, we play outside until dusk, come in and get cleaned up/put pjs on, and then watch a movie. Depending on weather and age of kids, we may use our blowup movie screen and projector and watch the movie outside along with popcorn and juice boxes. Afterwards, it’s brushing teeth and getting settled down in sleeping bags. We set up camp in the family room, and kids fall asleep quickly. I’m up by 8 a.m. making breakfast to feed the little people, and parents pick up around 9:15. I usually watch 8 to 10 kids, and it’s an easy $500. Kids LOVE the night, and I have more demand than space available."

—u/furryfreeloader

"I bake fruitcakes from scratch, using pecans instead of walnuts, and cream sherry in lieu of harsher liquors. I use 1/2 pound loaf pans, so no one is stuck with a lot of leftovers. Baking begins in September, through October, so the cakes have time to soak up the sherry. Business is pretty good, I can do a few hundred dollars or more easily, and still have folks clamoring for more."

via GIPHY

u/Cuyler_32087

"I do clinical studies. I was on an antibody one where the total pay is like $6k. I got $300-700 a month for the first few months for a blood draw and 1 infusion. And once I complete it next month I get a $1,500 “bonus” for completing the whole thing."

—u/mystictofuoctopi

"I have a flea market booth. The most lucrative part about it is freeze dried candy I buy from a local business. I buy in bulk and have 100% markup and still sell a crapload of candy! It helps that the local mall has pretty much the same stuff for three times the price. People want to try it but don't want to pay those prices, so they get excited when they see mine and buy three for the price of one mall candy. It's silly, but I'm happy with it."

—u/greenonioncrusader

"I watch for class action lawsuits and join when I qualify. I’ve made a few hundred the past couple of years, but my main motivation is how tickled my husband gets when a random check arrives. Am always looking for ways to impress him, LOL."

—u/vavamama

"I 'teach English' online, basically just chat with people. One of them is a kid where we do a 50/50 reading and watching Pokémon or Godzilla. So I get paid minimum wage to watch Pokémon and old Godzilla movies."

—u/the_polar_bear__

"I crochet and sell dolls."

side jobs

Aren't these adorable?

preview.redd.it

—u/blackcatspat

"I had an Etsy shop reselling vintage and antique cast iron cookware that I would find in rusty condition and restore to be collected or used again. Just recently shut the shop down due to time constraints, but it was a great little side gig at the time, and I enjoyed it."

—u/tannergd1

"I DJ weddings and provide light shows for bands coming through town. It started off just as a hobby, and it spread through word of mouth. People pay so much money for DJs and bands for weddings that it makes my charge of $100 an hour look really cheap."

—u/hottytoddypotty

"I watch local Facebook groups and find odd jobs there quite a bit. People are always looking for random help. Last weekend, I made $25 by going to a lady's house and clipping her cat's toenails!"

—u/prinessbeca

"One thing I did was a mock jury I found on Craigslist. Went to a law firm where they catered food, drinks, and snacks. We got to listen to a case and deliberate like an actual jury would, and the whole thing was recorded. Got paid $200 plus travel fees for about three and a half hours worth of work."

—u/caughtyoulookinn

"I worked as a victim for a military training drill. It was $100 per day, paid in cash. If you did all three days of this exercise, you got an extra $25. They are coming back to my area in two months."

—u/wagonhitchiker

"I met a dude once who sold feeder roaches to Petco, PetSmart, etc. He was making, like, $200k off his garage."

via GIPHY

—u/the_dumb_engineer

"Back in college, I put together furniture — 80% of the time for older folks who ordered flat pack furniture and couldn’t put it together themselves. I enjoyed the puzzle of putting together IKEA furniture, and I usually had an interesting conversation or two with the older generation."

—u/selkie_queen

"I sharpen knives and tools to supplement my income. Startup costs are pretty low, and if you go to a farmers market in a wealthier part of town, you can usually get a decent amount of business. Kitchen and pocket knives are usually the standard, but if you can sharpen tools like lawn mower blades, shears, chisels, etc., you can get a decent amount of consistent return business. Anywhere from a couple hundred to about $1k a month depending on how much I am working at it."

—u/os_jytz

"Not that weird, but I model for art classes. I have a full-time job, but I usually do classes a month and get paid in cash, which is nice."

—u/7hecavalry

"I sell plant cuttings and seedlings! Spring time I just sell my extra peppers and tomatoes, and then have some well-loved houseplants that need a haircut every so often. I just root the cuttings in water and eventually pot and sell. It's not a ton of cash or anything, but it's a nice way for my hobby to pay for itself over time. Also, I've been growing pomegranates from seed because where I live, they are an uncommon houseplant. The local garden center sold small trees for $129+! I had no problem growing the little guys for a few months and selling for $20; whereas, the seed packs were $5 for a bunch."

via GIPHY

—u/induceddaftfan

And last but not least…

"Not a job or a real way to make money but, in Washington State, every time at the grocery store I would snag the tossed losing lottery tickets in the lotto garbage cans. Scan them into the 360 app and get points, 1700 points was equal to $25 on gift cards. I made about $825 in one year just by doing that, $125 of that $825 was from winning thrown away lottery tickets. People just tossing winners in the garbage can. Once I found a completely unused scratched ticket, also got a few free tickets in bonus rounds that people just tossed."

—u/runninginpollution

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Pop Culture

Realtor breaks down how outrageously house prices have risen against income in just four years

Is buying a home still part of the American Dream?

Photo by Tierra Mallorca on Unsplash, Freddie Smith/TikTok

Realtor Freddie Smith shows the math of why millennials can't afford a house.

Does this conversation sound familiar?

Millennial: "Housing costs are ridiculous. And now mortgage rates are double what they were a few years ago. How am I supposed to afford to buy a house?"

Boomer: "You know what the interest rate was on my first house? Over 16%. I'd have loved to have a 7% interest mortgage!"

Millennial: "But you could raise a family on a single middle-class income when you were my age. That's just not possible now."

Boomer: "Well, maybe if you stopped buying avocado toast and Starbucks, you could afford a house."

Millennial: [blank stare]

Generational battles over economics aren't new, but some eras provide more fodder for such exchanges than others. Right now, it's the cost of housing that has younger people feeling stuck while older folks (or people who were lucky enough to land a house several years ago) are sitting pretty on the equity they've gained since the pandemic started.

Those of us who already own a house and aren't thinking of selling any time soon may not be fully aware of how drastically things have changed for those in the homebuying market. One realtor on TikTok shared a breakdown of the numbers, and it is eye-opening.

Watch this explainer from Freddie Smith:

@fmsmith319

Housing cost from 1995 vs 2019 vs 2023

Umm, yeah. It would take a truckload of avocado toast to even come close to making up for that increase. And these numbers are assuming you could even afford an $84,000 down payment. First-time homebuyers can often qualify for a 3% down loan, which makes it easier to get into the house but increases the monthly payment.

People in the comments commiserated, and many people asked what they were supposed to do in light of this reality. Some suggested buying land and putting a cheap mini-home on it until they had enough saved up to build a house. Others said to wait it out because the current market isn't sustainable and we may see a housing crash. (Though, as one commenter pointed out, "[In] 2019 we were told everything would crash but instead everything went up in record numbers.")

Some blamed the current administration, completely ignoring the global pandemic of the past three years that resulted in economic upheaval and ongoing fallout everywhere. The immediate housing market has always been somewhat unpredictable, and it's a crapshoot as to whether or not it's the best time to buy.

But when you can't even come close to affording it, it's a moot question anyway. Surely, something's got to give, but the question is what, when and how.

Smith has many, many videos showing the math behind the housing market. Follow him on TikTok for more.

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Women working in Africa’s cocoa farms have received business education programs for 15 years. Here’s how that benefits the entire world.

All images provided by CARE & Cargill

The impact of the CARE and Cargill partnership goes beyond empowering cocoa farmers

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Cocoa, the key ingredient found in your favorite chocolate bar, has been a highly revered food product throughout human history. It’s been used for religious ceremonies in Peru, royal feasts in England and France, traded as currency for the ancient Mayans. And considering that many of us enjoy chocolate on a regular basis (mochas and candy bars, anyone?) it seems like that love is still going strong even today.

And if you are someone who looks forward to that sweet chocolate pick-me-up on a regular basis, you likely have the women of West Africa to thank.

Women like Barbara Sika Larweh, a mother of six who works as a cocoa farmer in Larwehkrom, a community located within the Sefwi Wiawso Municipality in the Western North Region of Ghana.

care, cargillMama Cash now empowers other women to gain independence

Nearly 60% of the world’s cocoa comes from both Ghana and Côte d’Ivoire, where Barbara and other mothers make up over half of the labor force. These female cocoa farmers shoulder the same physical burden as their male counterparts—all while also running households and paying for their children to go to school. And yet, they typically don’t receive equal income. Nor do they have access to the resources that could help them achieve financial independence.

Thankfully, positive changes are taking place. Barbara’s story exemplifies the impact of programs offered by CARE and Cargill, such as Village Savings and Loan Association (VSLA), which are small groups that offer low-interest loans to individuals living in poverty, helping them to build savings without going into devastating debt.

Through these initiatives, women, like Barbara, are equipped with vital knowledge like financial literacy to improve household incomes, sustainable agriculture practices that improve yields, and nutrition education to diversify their family’s diets.

“They came and trained me on the VSLA. I dedicated myself and volunteered so that I would be able to train my people, too,” Barbara explains.

Within the first year of using the programs, Barbara and the people she trained profited—earning her the nickname of “Mama Cash.”

This is no isolated event. In cocoa-growing communities supported by CARE and Cargill programming between 2019-2022, the number of households living below the national poverty line decreased by nearly 32% in Cote d’Ivoire and Ghana - as a direct result of increasing and diversifying income through using these programs.

Like Barbara, who today is an executive member of the Community Development Committee, more than 2.4 million women have used their success as entrepreneurs to transform into leaders and decision-makers within their communities. Whether it’s giving most of their earnings back to their families, reducing child labor, or exponentially increasing overall farm yields, the rippling effect is profound.

The impact of the CARE and Cargill partnership goes beyond empowering cocoa farmers. The joint initiatives have fostered progress on complex global issues related to social justice, such as gender equality, climate change, and food security. By improving access to quality nutrition, water, and hygiene, the joint programs have positively influenced the cocoa communities’ well-being.

Suddenly there’s a lot more to think about the next time you eat a candy bar.

Find out more about the important partnership between CARE and Cargill here.
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