Editor’s Note: A version of this story appeared in CNN Business’ Nightcap newsletter. To get it in your inbox, sign up for free, here.

A little over a decade ago, the dominant narrative about the housing market was that Millennials simply weren’t buying. They were either too cheap, lazy, or itinerant to commit to something as weighty as a mortgage.

Cut to 2020 and that narrative got flipped on its head. It wasn’t that Millennials didn’t want homes in the suburbs, they just couldn’t afford them. But when the pandemic hit and demand for property exploded, the furor was driven by people in their 30s — finally flush after years of slogging away at whatever jobs were left for them in the fallout of the Great Recession, and, for many, eager to flee to the wide-open spaces of suburban life.

(It also didn’t hurt that dizzying stock surges meant Baby Boomer parents with large investment portfolios were happy to pass on some of those gains to their darling Millennial kids.)

As that 2020 housing boom begins to go bust, those who managed to close on a home in the crush of competition fed by rock-bottom mortgage rates should count themselves extremely lucky.

Here’s the deal: On Thursday, a new report showed that first-time buyers made up just 26% of all homebuyers in the year ending in June — an all-time low over the four decades that the National Association of Realtors has been conducting its survey.

For a historical comparison, the share of first-time buyers over the past decade has been between 30% and 40%. In 2009, in the middle of the Great Recession, it was high as 50%.

More bad news for the younger Millennial and Gen Zers hoping to buy their first home: The typical age of a first-time homebuyer is now a record 36 years old, up from 33 last year.

It’s not hard to see why: First-time buyers have less cash saved and don’t have the equity that repeat buyers have.

“They have to save while paying more for rent, as well as student debt, child care and other expenses,” said Jessica Lautz, NAR’s vice president of demographics and behavioral insights. “And this year were facing increasing home prices while mortgage rates are also climbing.”

Oh yeah, one other thing: In addition to mortgage rates going up, home prices also shot up, with the median peaking at $413,800 in June. (Imagine your starter home clocking in at 400 grand!)

All of that is pushing rental prices up as well, as would-be buyers opt to continue saving (hopefully) for a down payment.

MY TWO CENTS

Housing is broken. I don’t purport to have a silver bullet, but it’s clear that inventory constraints and outdated zoning restrictions are a big part of the problem.

“The policies that regulate land use and housing production make it extremely difficult to add more homes in desirable locations,” writes Jenny Schuetz, an urban economist at the Brookings Institution.

The United States, she argues, has failed to build enough homes, and continues to build too many homes in the wrong places.

Rather than rebuilding within existing neighborhoods, housing supply has expanded through “sprawling single-family subdivisions at the urban fringe.” That’s putting more people and homes in environmentally vulnerable areas, such as wildfire-prone regions of the West.

As affordability reaches crisis levels, now is a good time for federal and local governments to rethink the way we frame the American Dream. But that will only happen if those who stand to benefit — Millennials and Gen Z — are better represented in elected office. As Schuetz argues, the upper-middle class Boomers in power now are, understandably, reluctant to change the system that got them where they are.

NUMBER OF THE DAY: 75

Seventy-five basis points: All the cool central banks are doing it.

Hot on the heels of the Fed’s fourth-straight 0.75 percentage point rate hike, the Bank of England followed suit Thursday, raising its own key interest rate by the same amount — its biggest hike in 33 years. The European Central Bank did the same thing last week.

(Side note: “Basis points” are how central bankers talk about rate moves, which usually happen in tiny increments. One basis point = one-hundredth of 1%.)

JOBS EVE

Tomorrow, when the Bureau of Labor Statistics releases its October jobs report, it will be the last major read of the economy before the midterm elections — and will cap a week of new data signaling that the white-hot labor market is showing only tentative signs of cooling off.

See here: The US economy is expected to have added 200,000 jobs last month, down from 263,000 in September but well above the pre-pandemic average. The unemployment rate is expected to edge up slightly, to 3.6% from 3.5% — still close to a half-century low.

But — there’s always a but — that is, in the Fed’s view, not great news. And it could be very bad news for Democrats next week.

The Fed’s most aggressive monetary tightening in modern history — while driving up mortgage rates above 7% for the first time in 20 years, slowing business growth and crimping household spending — has barely made a dent in the labor market.

In normal times, that’s the kind of news worth celebrating. But in the up-is-down economics of 2022, it’s cause for concern, as it suggests the economy is overheating. That’s partly why the Fed announced its fourth-straight three-quarter-point hike, the latest in a series of aggressive moves that would have been unthinkable just a few months ago.

Another strong data point on jobs will only reassure the Fed that the labor market can withstand more rate hikes.

The Fed would absolutely love for everyone to keep their jobs and just see some “softening” in the labor market — a slowdown in wage growth, say, or a drawdown in job openings.

But realistically, when the Fed raises rates, it results in employment (eventually) going down.

Analysts across the board say the odds of a recession are high, if not guaranteed. But the Fed is wagering that the pain of a recession (and the job losses that would accompany it) is preferable, in the long term, to the pain of runaway prices.

Unfortunately for Democrats trying to hold on to power next week, the pain of inflation appears to be outweighing any positive sentiment about job security. According to a new CNN poll, three-quarters of likely voters already feel like the country is in a recession.

Correction: An earlier version of this article misstated the definition of a basis point. It is one-hundredth of one percent.