In case you missed it in the flurry of RompHim and Russia news swirling around the Internet, Australian businessman Tim Gurner recently suggested that the reason young people can't afford to buy homes is their love for expensive avocado toast and coffee.
It echoes the "latte factor" argument that saving on the little purchases can add up to big investments later on. While true, you do save money when you don't spend it, other financial experts argue that it's actually unprecedented levels of debt, stagnating wages, and rising medical costs that are more likely to make saving difficult.
(Also note that said businessman also got a $34,000 loan from his grandfather toward purchasing his first property. How he didn't spend that on avocado toast is beyond my millennial understanding, but, hey, to each his own).
For the sake of argument, let's break this down. How many avocado toasts would you need to give up each day to save up enough money to purchase a house in Chicago?
Chicago online real estate startup Neighborhoods.com took on the challenge and crunched the numbers. They compared the average cost of an avocado toast in a US city (based on several of the most popular avocado toasts available) with the median home sale price along with cash needed to close the sale.
Chicagoans would have to give up 4,091 avocado toasts for the $45,000 needed for the closing costs on a $225,000 home. That's 11 years without an $11 avocado toast every day.
And turns out Chicago may be one of the best places to move if your avocado toast habit is all that's standing in your way from purchasing a home.
To purchase a home in New York City (median home price $1,100,000) where the average price of an avocado toast is $10, it would take 60 years to save up for closing costs. In San Francisco (where the median home price is $1,185,000) it would take 72 years.
Best of luck, avocado-loving prospective home buyers.
