A Florida realtor explained that the “old American dream” was gone as millennials and Gen Z were struggling to reach today’s middle class.
In an interview with Fox News, Freddie Smith, a realtor and TikToker from Orlando, explained millennials and older Gen Zers have been struggling financially, and have had difficulty saving for homes that have become more expensive.
“The millennials, they’re the pinched generation where college essentially stopped working for most,” Smith explained. “The debt piled up, and the old American dream died, and we got left holding the bag.”
Smith added that especially when the COVID-19 pandemic hit, millennials such as himself were left feeling unsure whether or not they should purchase a home while prices were affordable at the time
“I think most of us in America would define the middle class as somebody who can work a 40-hour-a-week career and can have the income to purchase the average home in America,” Smith said.
Even a few years ago, earning between $60,000 and $70,000 a year would have been enough to buy a house, Smith told the outlet, adding that now people would need to earn a salary of roughly $120,000 a year in order to buy a house priced around $400,000 to $420,000.
Smith adds part of the reason millennials and older Gen Zers are having trouble saving for a house is because of rising rent prices, student and credit card debt.
“Rent prices are taking up 30-40% of people’s income, making it harder for them to save for a house,” Smith explained. “So it’s this perpetual cycle that is keeping people out of the middle class.”
A survey conducted in August 2023 by RealPage, showed that 44% of Americans think renting is a better move financially than purchasing a home, with 51% of Gen Zers being in favor of renting. The survey also found that 73% of renters are currently in an area where they couldn’t afford to purchase a home.
The realtor, who discusses the financial struggles that millennials and Gen Zers are having in their journey to buy a house on his TikTok, shared how even for people who are renting with children, the cost of daycare affects their ability to save.
“People are spending about $1,200 to $1,500 a month on daycare, and I’ve even heard it as much as $3,000-$4,000,” Smith explained. “So when you add in somebody who’s rent for $2,500, $2,000 for daycare, $1,000 for two college loans, just that alone, you need $100,000 as an income just for that.”
As of September 2023, the median home price in the U.S. was roughly $412,000, a 2% increase from the year before, according to Redfin.
California topped the list of states with the highest median home price, sitting at $787,000, while Hawaii followed behind with a median home price of $750,000. Washington, D.C., came in third with a median home price of $626,000.
