by Emma Dahl

Associate Program Analyst |

I really like avocado toast. In fact, I ate three pieces for breakfast this morning. But, I’ve noticed that the “millennial” activities I love so much (eating avocado toast, drinking microbrews, etc.) have put my generation under heat for squandering our money.

If I just stopped eating so much avocado toast, I might actually be able to afford a house, right? But is the issue that my generation is actually that bad at saving money, or has stuff just gotten more expensive?

Nominal housing prices (not adjusted for inflation) have gone up quite a bit, but what about real (inflation adjusted) housing prices? The real average housing price in 1970 was $163,474 (the non- inflation adjusted price was $23,900). In 2018, that number increased to $325,200 (see the data here). That means housing prices have more than doubled since 1970.

Let’s assume we are purchasing a home with a 30-year fixed-rate mortgage with 20% down. Average mortgage interest rates in 1971 were 7.54%, and are now 4.54% .

Run these numbers through a loan payment calculator and your monthly payment in 1971 would be $918.02, and $1,324.38 in 2018. That’s a monthly difference of $406.36 (or 30.68%). How much avocado toast do I have to stop eating each month to make up the difference?

I make my own avocado toast because paying $8 for a piece of toast is for suckers. If I’m being generous, I could say that each piece costs me around $3. That works out to 33 pieces of avocado toast every month. Every month. For 30 years.

But the bigger question here is, if real housing prices have gone up this much, have wages risen the same amount? Median family income in 1970 was $63,342.25 $9,870 before adjusting for inflation) and $61,372 in 2018. From these numbers, we can see that household purchasing power has actually gone down. Yet, housing prices have increased 30%.

So yeah, home ownership for millennials is around 8% lower than for Baby Boomers and Gen-Xers when they were our age, but it’s not just because we eat too much avocado toast.