Real Estate Prices: What’s Ruining Millennials When Buying a Home

Article summary

Baby boomers and millennials had to spend similar amounts of their income on mortgage payments, despite sharp increases in real estate prices. Roughly speaking, the burden of mortgage payments has remained similar over the decades, while the required equity has risen sharply. Banks almost never fully finance the purchase price of a property, which is why equity capital is crucial. The increased additional costs, especially the property transfer tax, are making the purchase of home ownership more difficult today. The Kiel Institute recommends political measures to reduce entry costs in order to make it easier for young people to access home ownership.

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