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Wednesday, February 25, 2026
Avocado toast instead of houses
I am a German living in Belgium. 72% of Belgians own the house they live in. Only 48% of Germans do. That has a lot of significant economic consequences. Despite the fact the Germany has a higher GDP per person, and lower taxes than Belgium, the median household net worth per adult in Belgium is $250k, compared to only $67k in Germany. Wealth is far more evenly distributed in Belgium. All over the world, houses mostly belong to average people, not banks or billionaires, and are thus an essential part of the middle class dream.
Buying a house in 2026 is harder than buying a house in 1976. There is a common narrative on the internet that this is due to some sort of generational conspiracy, where the older generations like the Boomers succeeded in an evil plot to keep the younger generations like Millennials or Gen Z poor. That is complete rubbish. The internet favors simplistic, sensationalist, and wrong narratives over complicated and less interesting truths. The counter-narrative of younger generations having no houses due to spending all their money on avocado toast isn't much better.
The complicated truth here is that patterns of consumption and asset ownership have very much changed over the last 50 years. I sometimes wish that the young people filled with generation envy and complaining the loudest about older generations could be put into a time machine and forced to spend some time in 1976. I doubt they would like the experience very much. No mobile phones, no streaming, no internet, no social media, VHS was just invented, few people had one, and there were no video rental shops yet. Households spent a much larger part of their income on groceries, but had a lot less variety. Any type of consumer goods was comparatively much more expensive. Holiday air travel was expensive and a lot less common.
And then 50 years of increased industrialization and globalisation happened. As a result, the relative cost of consumer goods fell. The relative cost of assets rose. The availability of various services exploded, but that came with a cost. Average screen time rose from 4.5 hours in 1976 to over 7 hours in 2026, but while in 1976 the main cost was buying a TV, today we have far more and far cheaper screens in our houses, but pay a lot more for subscriptions.
At 9% mortgage interest rate, houses weren't all that much more affordable in 1976 than in 2026, and as people had a lot less stuff, they were about 40% smaller. But they did require less down payment. And the value of a house grew faster than inflation in the past 5 decades, so it was a great investment. Still, one shouldn't neglect that most people who bought a house in the 70's had a lot less money left for consumption, and that money bought them comparatively less comfort. A mortgage is a way to force yourself to save more money and consume less, which obviously results in better retirement savings and a more comfortable situation in old age. The personal saving rate of Americans was 12% in 1976, and is under 4% now.
The world changed in the last 50 years, and people changed with it. The 2026 median household lifestyle with its much bigger choice of cheaper consumer goods and services would seem like luxury and science fiction to a person from 1976. But people simply adjusted their expectations to what lifestyle is normal. If we express wealth as the pile of stuff we own and the services we consume, we are a lot richer in 2026 than the people of the same age in 1976 were. But the fundamentals of people only earning money in the middle section of their lives, and their saving rate during that part of their life having a big impact on their retirement finances hasn't changed at all.
In the US, a record number of high earners report living paycheck to paycheck. But that is due to all the expenses that they consider to be "necessary" today, some of which didn't even exist before. Less consumption and higher savings rates are still possible today, even if it might involve resisting stronger temptation. Whether you buy a house or some other investment portfolio with the saved money, your future self will be grateful. It is easy to blame everything on "the economy" or "older generations", but a lot harder to make good lifestyle choices for the long term.
- posted by Tobold @ 1:32 PM Permanent Link
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Its very hard to compare home ownership across different generations because like you said so many things have changed. My father's (a boomer) first house was one he built himself on a piece of land he bought in Puerto Rico for less than $500 when he was around 20 years old. That's not something that's really available as an option to me, not only because I couldn't afford the land and don't have the skills to build a house, but because building codes would make it illegal to build a house today like he did. It's much more expensive to build a house today than in 1960.
I'm 35 and still rent despite making more money, even accounting for inflation, than he did. I don't see myself owning a home anytime soon unless something drastically changes with either my income or the cost of a mortgage. Its currently cheaper for me to continue renting then purchasing almost any home in my area.
What has me concerned is with the continuing layoffs in the tech sector and further advancements in AI, (the new Claude model for example is a huge leap forward in coding) is that I might be out of a job in 5-10 years.
I don't think Governments are not ready for the rapid changes happening to tech industries. Europe, I think will fair better, since you all tend to have more robust social safety nets. But I fear things will be especially ugly in the US.
Many millennials will be in their late 40s and early 50s having to transition to completely new careers, essentially starting over and competing with younger generations for entry level jobs.
I'm 35 and still rent despite making more money, even accounting for inflation, than he did. I don't see myself owning a home anytime soon unless something drastically changes with either my income or the cost of a mortgage. Its currently cheaper for me to continue renting then purchasing almost any home in my area.
What has me concerned is with the continuing layoffs in the tech sector and further advancements in AI, (the new Claude model for example is a huge leap forward in coding) is that I might be out of a job in 5-10 years.
I don't think Governments are not ready for the rapid changes happening to tech industries. Europe, I think will fair better, since you all tend to have more robust social safety nets. But I fear things will be especially ugly in the US.
Many millennials will be in their late 40s and early 50s having to transition to completely new careers, essentially starting over and competing with younger generations for entry level jobs.
I can't comment on whole generations, but I happen to have two children that would be considered Gen Z. I can tell you one thing that I notice in them and all of their friends that is much different than the people that I grew up with - they are not nearly as excited about being independent as we were. Generalizations are never good so I can only speak for what I've lived.
The young adults I know are delayed about 5 or more years in maturity than the people that I grew up with. I have no idea if that's generational or just the people that I associated with. They look to their parents for direction and resources much more. They delay taking personal responsibility for things. I think that those of us that are parents are part to blame. For those of us that have done well we wanted to give our children a better life. Better usually meant easier. Now having two adult children, I think better would included a lot more adversity.
As a child I had my first job at nine years old. A small paper route. It wasn't much and took about 40 min in the morning if I remember correctly. I had a satchel that I wore with all the newspapers for the route that I walked and put the newspaper on the subscribers porches. Small responsibilities like that add up and I didn't make my children do that.
If I could do it over I would have made their childhoods have much more responsibility like generations before them. We also did have the same conveniences that they have as you alluded to. But that was a feature not a bug - it built resiliency. Being bored allowed more time for introspection, during which you understood yourself and others better.
Overall I think the environment that Gen Z has is more difficult than what we had, but only because the Internet has degraded society so much. The vitriol is off the charts compared to not have access to every crazy person with a following and every conspiracy theory. The Gen Z's that I know seem to be much frailer than the people that I grew up with. For example, having a conspiracy about one generation intentionally keeping another down is ludicrous. Any decent parent always wants the best for their children and they have sacrificed a lot of their own desires and pleasures to support them. No grandparent I know wouldn't sacrifice for their grandchild. To think otherwise just demonstrates the foolishness of youth. We know, we've been there.
The young adults I know are delayed about 5 or more years in maturity than the people that I grew up with. I have no idea if that's generational or just the people that I associated with. They look to their parents for direction and resources much more. They delay taking personal responsibility for things. I think that those of us that are parents are part to blame. For those of us that have done well we wanted to give our children a better life. Better usually meant easier. Now having two adult children, I think better would included a lot more adversity.
As a child I had my first job at nine years old. A small paper route. It wasn't much and took about 40 min in the morning if I remember correctly. I had a satchel that I wore with all the newspapers for the route that I walked and put the newspaper on the subscribers porches. Small responsibilities like that add up and I didn't make my children do that.
If I could do it over I would have made their childhoods have much more responsibility like generations before them. We also did have the same conveniences that they have as you alluded to. But that was a feature not a bug - it built resiliency. Being bored allowed more time for introspection, during which you understood yourself and others better.
Overall I think the environment that Gen Z has is more difficult than what we had, but only because the Internet has degraded society so much. The vitriol is off the charts compared to not have access to every crazy person with a following and every conspiracy theory. The Gen Z's that I know seem to be much frailer than the people that I grew up with. For example, having a conspiracy about one generation intentionally keeping another down is ludicrous. Any decent parent always wants the best for their children and they have sacrificed a lot of their own desires and pleasures to support them. No grandparent I know wouldn't sacrifice for their grandchild. To think otherwise just demonstrates the foolishness of youth. We know, we've been there.
I had way too many thoughts on this since I have first hand experience so I'm sorry if my previous post is disjointed. Another thing that I did want to mention, which I always had heart burn with in the US, is the concept of everyone wins. My children both did youth sports. That was to help them develop socially and physically. The sports didn't want to exacerbate the difference between the winners and the losers. Everyone got a participation trophy at the end of the season even if they were bad. I hated that then, and think it really created people with the wrong reality of society where there are winners and losers and the difference is stark.
That did not exist when and where I grew up. Winning was celebrated. Losing was a kick in the butt to want to do better so that you didn't feel like a loser. That breeds a mindset better prepared for adulthood in my mind.
That did not exist when and where I grew up. Winning was celebrated. Losing was a kick in the butt to want to do better so that you didn't feel like a loser. That breeds a mindset better prepared for adulthood in my mind.
Janous: "We also did[n't] have the same conveniences that they have as you alluded to. But that was a feature not a bug - it built resiliency."
The biggest advantage of less choice is that it's easier to make a decision.
The independence you see missing is potentially due to an abundance as well. If your career choice is a single one for the rest of your life and comes down to learning a trade on offer in your town (or being a mother), the choice is not exciting - but it is an easy one.
If options to relocate are limited, there is less demand for the land around you, you have less need to relocate and owning a house is an easier choice coupled with lower prices due to lower demand.
I would argue that all that leads to easier access to independence - but it is independence of a lower magnitude.
So the boomers are actually at fault. By generating the dozens of options and possibilities for the latter generations.
The biggest advantage of less choice is that it's easier to make a decision.
The independence you see missing is potentially due to an abundance as well. If your career choice is a single one for the rest of your life and comes down to learning a trade on offer in your town (or being a mother), the choice is not exciting - but it is an easy one.
If options to relocate are limited, there is less demand for the land around you, you have less need to relocate and owning a house is an easier choice coupled with lower prices due to lower demand.
I would argue that all that leads to easier access to independence - but it is independence of a lower magnitude.
So the boomers are actually at fault. By generating the dozens of options and possibilities for the latter generations.
You don't miss what you dont have, only 2 channel, Black and white tv. No way to record tv, Kids where fine, we play monopoly and card games, we stayed out in summer till it was too dark to see, we read the same books over and over.
Inflation and high interest rates where bad but earnings increases from inflation could cause strange(good) effects.My parents first home cost $13,000 but within a decade dad was on 40-50k a year.
Houses are built a lot safer, but bureaucracy always goes for the safest option regardless of context. Lets have 2x firesafe/earth quake rated doors 1 meter apart that each cost $1000 each oh but lets build it in a flood zone....
Pretty much every governmental decision that was made with the intent of improving home ownership has instead lead to increases in house prices.
This has lead to the average house increasing in value for most of the last year by the average yearly salary per MONTH.
Inflation and high interest rates where bad but earnings increases from inflation could cause strange(good) effects.My parents first home cost $13,000 but within a decade dad was on 40-50k a year.
Houses are built a lot safer, but bureaucracy always goes for the safest option regardless of context. Lets have 2x firesafe/earth quake rated doors 1 meter apart that each cost $1000 each oh but lets build it in a flood zone....
Pretty much every governmental decision that was made with the intent of improving home ownership has instead lead to increases in house prices.
This has lead to the average house increasing in value for most of the last year by the average yearly salary per MONTH.
I would add that one big factor is growth. A economy growing 5% a year is completely different from the 1% we have nowadays. When everything is growing, you grow with it, you have more opportunities to advance your career. Right now climbing the career ladder mostly mean waiting for someone to retire.
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: 26/2/26 19:22
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