Looking at the prices of houses these days, even in a real estate climate that is somewhat chilly in some areas of the country, I've been wondering if I could afford to buy if I were just starting out.

I'm always amazed at the young single men and women who can pull off such a transaction, since it took two salaries to buy our first $63,500 house in 1982 (interest rates were 18 percent).

The compromise, however, is that since then, we've never owned a house with a mortgage that could not be paid each month by just one of us. Unlike too many home buyers, we never wanted a house that would own us rather than the reverse. That's why when tough times come, we'll at least have a place to live.

Of course, a lot of marginal buyers, faced by skyrocketing prices during the recent boom, used so-called exotic mortgages with low teaser rates as their key to homeownership.

Some of those buyers are now behind on their payments as teaser rates have begun adjusting upward into unaffordable territory.

I bought my first house at 30, just a year after I was married, and while I was savings' poor as many longtime bachelors are, the potential earnings of my wife and I made us jointly able to afford and maintain a house and still go out to dinner and on vacations.

My older son just turned 24, and I'm concerned that even when he gets married, he and his spouse might have trouble affording a house, especially if he remains in the Los Angeles area.

My fears aren't completely unfounded.

Today's young adults are feeling the full, deep impact of a massive shift in the economy, and are no longer able to start and sustain a family, build a career and grow assets in the same manner as the previous generation, according to a new report series published by Demos, a national, nonpartisan public policy center.

"Young people today are being hit by a one-two economic punch," said Tamara Draut, director of the economic opportunity program at Demos, and author of the series. "This research shows that, unless we address these problems, this will likely be the first generation to not surpass the living standards of their parents."

One of the issues, of course, is the cost of higher education, which many middle class students meet by taking on loans they have to pay upon graduation.

Inflation-adjusted per-semester tuition at public universities has nearly tripled since 1980, up from $1,758 in 1980 to $5,132 in 2004, Demos said.

Thirty years ago, the average cost (tuition, fees, room and board) of attending a private college in 1976-77 was $12,837 annually, in inflation-adjusted dollars. Today, the average cost of attending a public university is $11,354.

Since 1992-93, the average college graduate's student loan debt has grown from $12,100 to $19,300 (in 2003 inflation-adjusted dollars). Over a quarter of graduates had debt higher than $25,000, up from 7 percent in 1992-93.

Add to this the fact that the incomes of 18-34-year- olds have largely been on the decline and these younger workers are less likely to have employer-sponsored health care, retirement benefits and other employment-related benefits and you can see some major effects on the real estate market.

According to Demos, in 2002, the median percent of pre-tax income young adults spent on rent was 22 percent, up from 17 percent in 1970.

Rising rents, particularly in central cities, has resulted in a higher percentage of young adults who spend more than 30 percent of their income on housing -- the standard threshold of "affordability." In 2000, one-third of young adults aged 25 to 34 spent more than 30 percent on rent -- up from less than one-fifth in 1970.

Since the 1970s, the amount of time it takes for young first-time homebuyers to save for a down payment has steadily increased. What took the previous generation two years now takes nearly four years.

Gen Xers housing debt is 62 percent higher than it was for Baby Boomers at the same life-stage.

Draut and Demos believe that the new Congress has the answer to the problem.

"Congress has a real opportunity to address these problems head-on," she said, "to restore the promise of work and revitalize the concept of 'career ladder'; to make education affordable and accessible; to extend and develop useful tax credits to make homeownership and asset-building a reality; to address the debt crisis; and to give today's young people and future generations a shot at starting a family that can thrive."

"When the 110th Congress convenes in January, the economic concerns of young people should be at the top of their to-do list," she said.

Published: December 7, 2006

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Al Heavens writes about real estate and home repair and improvement. He is the author of What No One Ever Tells You About Renovating Your Home: Real-Life Advice For Hassle-free, Cost-Effective Remodeling.