Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Americans Are Still Spending Like There’s No Tomorrow

wsj.com

Post reply on HN
Print view View original

41–50 of 56 posts

Re: Americans Are Still Spending Like There’s No Tomorrow

#41

Post by alephnan »

agentofoblivion wrote: post #32
lotsofpulp wrote: post #27

Earlier quoted context omitted.

> Unrelated but Zillow says at 7.5% interest rates that house is now $750k+, weird... makes no sense... counter-intuitive, except for how tight the supply/demand situation must be) I highly doubt this estimate is true, outside of very specific locales. Always ignore Zillow/Redfin estimates, and just look at comparable sales in the recent past.

If your algorithm worked better, don’t you think that would be the algorithm? You think those models don’t consider recent sales?

If you saw a $20 bill on the ground, you shouldn’t pick it up because someone else would have thought to do so already.

Re: Americans Are Still Spending Like There’s No Tomorrow

#42

Post by reaperman »

MuffinFlavored wrote: post #4

I had an interesting thought. I was in the market to buy a house during like... 2019-2021. What "was supposed to be" say... a $450k 3/2 house became $540k during "the COVID pandemic housing gold rush" when rates were 3.25% with everybody bored, willing to have a bidding war (low supply, high demand... how all of these families were able to afford what felt like $200k inflated prices, I guess because of the "funny mon…

> me having an "oversupply" of money will

So, if you were to buy a house you'd spend more for the next 5-10 years but because your payments are fixed, whereas rents will increase each year, there will be a crossover point where your mortgage+tax payments will eventually be quite low. So people who buy a house may pump more cash into the economy in the future. Plus theoretically, whoever sold you the house will be spending any extra cash they get from it (if they buy/rent in a lower cost of living area, or if the house was sold as part of estate that goes to a younger generation).

But yes, in the short term you might be pumping the economy with more cash than you would if you bought a house, depending on your ongoing savings rate vs. spending rate.

Re: Americans Are Still Spending Like There’s No Tomorrow

#43

Post by warriormonk5 »

happytiger wrote: post #22
UncleOxidant wrote: post #7

Earlier quoted context omitted.

> So... the Fed is raising rates to 5% to try and slow inflation. But now I'm earning 5% on a bunch of money to the point that it basically offsets my rent. ... doesn't that contribute to inflation? I don't think your case is all that common. The vast majority of people don't have that much money such that they could earn say $1500+/month with rates at 5%. Offsetting you are a whole lot of people who only have a few…

Don’t be overwhelmed by this response. I recently learned that the 1000 bucks thing is mostly based on Bankrates annual survey and it’s not actually true that they don’t have access to 1k, so this is a little bit an exploration. > American households, on average, have $41,600 in savings, according to data last collected by the Federal Reserve in 2019. And that’s before the free money era and the explosion of wealth f…

>> American households, on average, have $41,600 in savings, according to data last collected by the Federal Reserve in 2019.

Average vs Median strikes again.

Median household has 4k. 70% don't break 10k.

It's the high end that weighs on that average pretty hard.

Re: Americans Are Still Spending Like There’s No Tomorrow

#44

Post by UncleOxidant »

wenc wrote: post #28
pimlottc wrote: post #11

Earlier quoted context omitted.

I’m not a finance expert but don’t you need something like $350000 in the bank to make $1500/mo in interest? https://www.calculator.net/interest-calculator.html?cstartin...

Wouldn't most people with $350k and long investment horizon rather invest that in stocks? (actually asking, I have not idea, just a notion). $350k seems like a lot of money to leave in a money market account as opposed to in a diversified portfolio of stocks/bonds in a tax advantaged account. I'm thinking long term growth. Inflation rates go up and down (i-bonds were not attractive until recently) and so do interest…

If I got a $350K windfall right now I'd probably put about 70% of it into tbills (6 month to 1 year paying ~5.5% right now) and another 20% into 2 to 5 year treasury notes (paying ~4.7% right now) with the remainder going into an S&P 500 ETF like VOO. I'd DCA into stocks & etfs as the tbills matured. You're right, these 5% rates probably won't last long (though some pundits are saying we're going to be seeing 6+% due to high demand and stubborn inflation so who knows...) but a 5.5% yield on ultra safe treasuries is too hard to pass up right now plus there's no state tax on that interest.

Re: Americans Are Still Spending Like There’s No Tomorrow

#45

Post by whoopsie »

lotsofpulp wrote: post #27
MuffinFlavored wrote: post #4

I had an interesting thought. I was in the market to buy a house during like... 2019-2021. What "was supposed to be" say... a $450k 3/2 house became $540k during "the COVID pandemic housing gold rush" when rates were 3.25% with everybody bored, willing to have a bidding war (low supply, high demand... how all of these families were able to afford what felt like $200k inflated prices, I guess because of the "funny mon…

> Unrelated but Zillow says at 7.5% interest rates that house is now $750k+, weird... makes no sense... counter-intuitive, except for how tight the supply/demand situation must be) I highly doubt this estimate is true, outside of very specific locales. Always ignore Zillow/Redfin estimates, and just look at comparable sales in the recent past.

Spot on for Washington state real estate market. Pre early and post pandemic.

Re: Americans Are Still Spending Like There’s No Tomorrow

#46

Post by hackernewds »

pcurve wrote: post #29

Summary: Americans are spending a lot of money on vacations and fun experiences that they might've otherwise put off, because they are prioritizing to enjoy life now than later. Inflated housing prices made savings almost pointless and COVID crisis taught them about fragility of life.

So because housing is expensive, Americans are making even poorer choices by saving less for them? Make it make sense.

Re: Americans Are Still Spending Like There’s No Tomorrow

#47

Post by hackernewds »

lotsofpulp wrote: post #38
agentofoblivion wrote: post #32

Earlier quoted context omitted.

If your algorithm worked better, don’t you think that would be the algorithm? You think those models don’t consider recent sales?

Zillow is a biased party, being a business that earns its income from home sales. They very well could publicize different figures than what they really think, although I think it is more likely that they simply do not have the ability to predict prices any better than most others. Which is why they lost a ton of money in their home buying/selling division and shut it down.

that sounds illegal. if a platform has monopoly pricing power, especially on something like housing

Re: Americans Are Still Spending Like There’s No Tomorrow

#48

Post by willis936 »

hackernewds wrote: post #47
lotsofpulp wrote: post #38

Earlier quoted context omitted.

Zillow is a biased party, being a business that earns its income from home sales. They very well could publicize different figures than what they really think, although I think it is more likely that they simply do not have the ability to predict prices any better than most others. Which is why they lost a ton of money in their home buying/selling division and shut it down.

that sounds illegal. if a platform has monopoly pricing power, especially on something like housing

afaik price fixing is only illegal when two parties conspire. If anyone knows about market manipulation regulation please correct me.

Re: Americans Are Still Spending Like There’s No Tomorrow

#49

Post by willis936 »

hackernewds wrote: post #46
pcurve wrote: post #29

Summary: Americans are spending a lot of money on vacations and fun experiences that they might've otherwise put off, because they are prioritizing to enjoy life now than later. Inflated housing prices made savings almost pointless and COVID crisis taught them about fragility of life.

So because housing is expensive, Americans are making even poorer choices by saving less for them? Make it make sense.

Simple: housing affordability is racing out of reach at an accelerating rate. There is no future where the savings lift them into the landowning class, so they decide to not be as miserable as they could be if they futilely saved for something that would never happen.

Re: Americans Are Still Spending Like There’s No Tomorrow

#50

Post by xboxnolifes »

hackernewds wrote: post #46
pcurve wrote: post #29

Summary: Americans are spending a lot of money on vacations and fun experiences that they might've otherwise put off, because they are prioritizing to enjoy life now than later. Inflated housing prices made savings almost pointless and COVID crisis taught them about fragility of life.

So because housing is expensive, Americans are making even poorer choices by saving less for them? Make it make sense.

houses aren't the only thing in the equation.
Post reply on HN