Generational Luck in the Housing Market
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Generational Luck in the Housing Market
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Re: Generational Luck in the Housing Market
#2This is the primary way for citizens to acquire wealth too, and the primary source of boomer wealth. The politics of this thing transcends the current Red/Blue paradigm, at least until battle lines will get drawn with various policy prescriptions and the winner/losers of each of them chooses a side.
Will be the biggest issue facing American politics for the next 10+ years I think while the Boomers age and try to cash out.
Re: Generational Luck in the Housing Market
#3The FED implicitly transferred trillions from poorer renters and young people to wealthy older homeowners.
Re: Generational Luck in the Housing Market
#4This is the primary way for citizens to acquire wealth too, and the primary source of boomer wealth. The politics of this thing transcends the current Red/Blue paradigm, at least until battle lines will get drawn with various policy prescriptions and the winner/losers of each of them chooses a side. Will be the biggest issue facing American politics for the next 10+ years I think while the Boomers age and try to cash…
It really is interesting to see how it does not fall along partisan lines. This leads to both good and bad surprises, where you find unexpected allies - as well as foes.
Re: Generational Luck in the Housing Market
#5This is the primary way for citizens to acquire wealth too, and the primary source of boomer wealth. The politics of this thing transcends the current Red/Blue paradigm, at least until battle lines will get drawn with various policy prescriptions and the winner/losers of each of them chooses a side. Will be the biggest issue facing American politics for the next 10+ years I think while the Boomers age and try to cash…
In the US the boomers are in for a world of hurt. Senior care is extremely low quality, increasingly scarce, and already unaffordable. The US medical system is completely unprepared for that entire generation to age out. It is already a crisis. At least they can spend down money from their homes to pay for some of it. The subsequent generations probably won't be as lucky.
Re: Generational Luck in the Housing Market
#6The FED implicitly transferred trillions from poorer renters and young people to wealthy older homeowners.
Yep. It was a real slap in the face.
Re: Generational Luck in the Housing Market
#7I'm a Millenial; my partner is on the cusp of Gen X. In terms of fucked generations, I'd argue those born in the early 80s are our currently most fucked (followed shortly by Gen Z). This is the generation that had perfectly-spaced financial crises in the dot-com and then financial crisis that wiped out two decades of aborted starts towards wealth. (In contrast, younger Millenals got the ZIRP era to build wealth and buy assets.)
Gen Z just missed that run-up. (Unfortunately, it looks like a lot of my peers discovered their inner NIMBY the moment they signed their first mortgage cheque.) Alpha will be fine--they'll benefit from boomers unwinding their real estate to pay for senior care. Unfortunately, that's likely to financially impact us Millenial homeowners.
Re: Generational Luck in the Housing Market
#8Probably not a sympathetic audience here, but if you look back more than the relatively short timeframe of 20 years things are far more cyclical. I grew up with double-digit interest rates, so while everything was cheaper, financing was far more costly. The generation that's now looking to buy a house grew up with a financed lifestyle (via their parents) that was essentially interest free and not sustainable in the long term. I see a lot of people who believe their first home should look a lot like their family home: new, desirable location and affordable. This has never been realistic.
Re: Generational Luck in the Housing Market
#9Where I live, many of the houses were built by the same builder or at least using the same basic plan (I've even seen houses built 20 years later than mine with the same basic layout).
My wife and I purchased in 2015. A short bit after, there was some regret as prices were still falling.
I recently went to pick up my child at a classmate's house. They just purchased last year. I walked in and, sure enough, roughly the same house with minor differences in the layout...except it cost $300,000+ more.
Not sure how my kids are ever going to own a house in the US and I feel like I am locked into this house and mortgage forever.
In retrospect, we purchased near the bottom. Truly some generational "luck".
Re: Generational Luck in the Housing Market
#10Calling it luck makes it sound like there are uncontrollable forces at work. However, these consequences are entirely downstream of artificial, man-made policies.