Two Unique Impacts of the Housing-Affordability Crisis

Here are two impacts of the housing-affordability crisis that no one is talking about. Except me. Geeky, old me.

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 One of the big advantages of being “The Wealthy Barber” is that people are always opening up to me about their personal finances. I mean, they say money is a taboo subject but you wouldn’t know it from the conversations I find myself in. Essentially, I’m taking confession—financial confession. People are really, really frank, but it helps me with the book writing, no question about it.

Now, here are two things I’m certain of because I’m hearing them so much today. Two impacts of the housing-affordability crisis that you probably haven’t thought about.

Number one: A lot of young people are planning on having fewer kids because of the housing costs. Yes, the birth rate was trending down anyway but the crisis has accelerated that trend.

Kids are expensive. Housing is expensive. Heck, everything is expensive. Something has to give. So many times now I hear a comment along the lines: “With our mortgage costs being so, so high with the new interest rates, especially relative to our income, we have to be careful. We’re going to have two kids, max, but probably just one, maybe none.”

Now, of course, many of us said the same thing, went on to have three, four, etc. But I’m hearing this enough that I think many will stick to it and the declining birth rate numbers are going to take another slight hit.

Number two: I think the divorce rate could also fall a bit. Several couples have admitted to me that they’ve fought harder to work things through because in this market, they know they can’t afford two homes.

A lawyer, in fact, was just telling me last month that she’s never seen so many couples get back together AFTER signing a separation agreement. The real-estate costs are at least playing a role there, too. You know, I shared those two observations with my father and he said, “Yes, makes sense. You know, your mother and I should have stopped after one.”

My sister is the older one.