Why aren’t Americans buying new cars?
We’re now seven years removed from the financial crisis and Americans are still very insecure about their economic situations. Almost all of the income gains have gone to those at the top of the income scale, whereas the rest of us have seen our paychecks hardly budge in over 40 years.
That’s why it was unsurprising to read these two news items today:
- The average US vehicle age hits record 11.5 years
- US home ownership rate falls to lowest level since 1967
Here are two examples of the lingering impact of the recession and our economy’s stagnant wages. It isn’t hard to understand. When you aren’t making enough money, you cannot buy a new car and you certainly cannot buy a house. Especially when “home values have jumped 34 percent since reaching a bottom in early 2012, making purchases more expensive for entry-level buyers”, according to Bloomberg.
As if this weren’t bad enough, the Millennial population is entering the workforce with a historical amount of student debt. The Wall Street Journal reports that the class of 2015 has (on average) $35,000 in debt. Yikes.
So don’t expect this upcoming generation to spur the economy forward by buying new homes or cars in the next five (or ten) years. That burden is on you, Generation X.