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Generational Luck in the Housing Market

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Re: Generational Luck in the Housing Market

#31

Post by smallmancontrov »

enlyth wrote: post #28
bryanlarsen wrote: post #11

Earlier quoted context omitted.

Why blame the Fed? The low interest rates that made it easy to buy homes (driving up the price) also should have made it cheap to build homes which would have driven down the price. It was local regulations that prevented building homes.

Among other things, I think interest only mortgages are a completely degenerate financial product that shouldn't exist, the only purpose is so someone can leverage themselves to the tits on housing

Yeah but it pumps the value of my house so fuck 'em.

(I don't believe this, but I do believe it is the most common unstated thought on the subject so I feel compelled to get it on record.)

Re: Generational Luck in the Housing Market

#32

Post by pc86 »

nickpp wrote: post #12
CharlieDigital wrote: post #9

Where 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 th…

> it cost $300,000+ more. Have you try to inflation-adjust that? You may find the price jump is not that great for the last ~10 years.

In order for inflation alone to account for $300,000 delta in value they'd be spending so much on these houses that they would be fine financially by almost any metric.

Re: Generational Luck in the Housing Market

#33

Post by riku_iki »

bryanlarsen wrote: post #11
testval123 wrote: post #3

The FED implicitly transferred trillions from poorer renters and young people to wealthy older homeowners.

Why blame the Fed? The low interest rates that made it easy to buy homes (driving up the price) also should have made it cheap to build homes which would have driven down the price. It was local regulations that prevented building homes.

> The low interest rates should have made it cheap to build homes

not sure I understand how you came to such conclusion..

Re: Generational Luck in the Housing Market

#34

Post by [deleted] »

showerst wrote: post #29
JumpCrisscross wrote: post #14

Earlier quoted context omitted.

> Not sure how my kids are ever going to own a house in the US (EDIT: Inverse of) Median income to the average house price, across America, is at its highest point since the 80s (when we started measuring) [1]. [1] https://fred.stlouisfed.org/graph/?g=coAW

EDIT: due to a missing 1/ in the parent I think i was arguing against the opposite of what the parent poster meant to convey, heh. But that doesn't account for mortgage rates, or competition in down payments right? If you make 5% more inflation adjusted than the person 5 years ago, but mortgage rates are 2x, than you're still way behind right? And if all those who bought starter houses 5 years ago have a ton of equit…

[deleted]

Re: Generational Luck in the Housing Market

#35

Post by Der_Einzige »

bluefirebrand wrote: post #20
landedgentry wrote: post #10

Calling it luck makes it sound like there are uncontrollable forces at work. However, these consequences are entirely downstream of artificial, man-made policies.

The year you are born is absolutely an uncontrollable force

Buddhists at least believe this to be controllable.

It's the ultimate victim blaming religion - you're poor because you were a bad person in a previous life.

Very awkward to jokingly say "I wish I were a puppy" when I play with my dog and to see the look of abject horror on my Buddhist partners face. I'm told even wishing for something like that significantly increases my chances of becoming a dog in the next life - which is permanently an undesirable fate.

Re: Generational Luck in the Housing Market

#36

Post by smallmancontrov »

cableshaft wrote: post #16
JumpCrisscross wrote: post #7

I'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 b…

I was born in that time period. I would agree that in general people my age seem to be in a lot of trouble (I don't know about worst though, Gen-Z seems to be struggling a lot right now, and for them there's plenty of time for more fun economic struggles to happen). I'm also not where I should be financially despite the lucrative field, compared to others in my field, due to several setbacks (and also in part because…

If you bought a house in 2018, you don't get to complain.

Re: Generational Luck in the Housing Market

#37

Post by downrightmike »

fullshark wrote: post #2

This 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…

Except that boomers have and are already cashing out, that wealth is used up because they didn't save and Social Security doesn't cover much. Reverse mortgages and Heloc loans destroy generational wealth. Nothing will be passed down to most kids.

Re: Generational Luck in the Housing Market

#38

Post by bryanlarsen »

riku_iki wrote: post #33
bryanlarsen wrote: post #11

Earlier quoted context omitted.

Why blame the Fed? The low interest rates that made it easy to buy homes (driving up the price) also should have made it cheap to build homes which would have driven down the price. It was local regulations that prevented building homes.

> The low interest rates should have made it cheap to build homes not sure I understand how you came to such conclusion..

Building homes is a capital intense business.

Re: Generational Luck in the Housing Market

#40

Post by smallmancontrov »

showerst wrote: post #29
JumpCrisscross wrote: post #14

Earlier quoted context omitted.

> Not sure how my kids are ever going to own a house in the US (EDIT: Inverse of) Median income to the average house price, across America, is at its highest point since the 80s (when we started measuring) [1]. [1] https://fred.stlouisfed.org/graph/?g=coAW

EDIT: due to a missing 1/ in the parent I think i was arguing against the opposite of what the parent poster meant to convey, heh. But that doesn't account for mortgage rates, or competition in down payments right? If you make 5% more inflation adjusted than the person 5 years ago, but mortgage rates are 2x, than you're still way behind right? And if all those who bought starter houses 5 years ago have a ton of equit…

You might not be able to trade up? Oh, the horror.

Imagine not owning a home, not being able to afford a home, and having both rent and house prices accelerate faster than wages.

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