Calling it luck makes it sound like there are uncontrollable forces at work. However, these consequences are entirely downstream of artificial, man-made policies.
Generational Luck in the Housing Market
61–70 of 117 posts
Re: Generational Luck in the Housing Market
#62This 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
#63The FED implicitly transferred trillions from poorer renters and young people to wealthy older homeowners.
Re: Generational Luck in the Housing Market
#64Probably 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 l…
On top of this, even if prospective buyers are considering less desirable neighborhoods further from place of work, the used car market is still a mess with anything that doesn’t already have a foot in the grave (and thus, is a reliable efficient commuter) carrying an inflated price, which chips away at the savings that can be had there.
Re: Generational Luck in the Housing Market
#65Earlier quoted context omitted.
If you bought a house in 2018, you don't get to complain.
I'm not complaining, I'm doing alright, I'm just agreeing as a general generation thing. Keep in mind though that I didn't buy a house until my late 30s. My parents, in contrast, bought their first house in their early 20s. Also they had me in their early 20s, and my brother in their late 20s. I'm in my 40s and I still haven't had children yet (might not ever at this rate).
Re: Generational Luck in the Housing Market
#66I'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…
In contrast, all of my younger sisters are much worse off right now. ZIRP may be great if you actually have money because you work in software, but most of my family is in construction. Hacker News loves to wax poetic about the trades, but the reality is its a non-stop boom/bust cycle and all my cousins and uncles have had LLCs go bankrupt over the years so many times I've lost count, to say nothing of those who got hurt and couldn't work, which usually ended up in giving in to drugs.
Amusingly enough, my oldest niece is the only Gen Z I know and she's also doing seemingly pretty well. Probably not buying any time soon but she just got her first solo apartment and landed a job within three weeks of graduating college, at my youngest sister's employer but getting paid $10k more a year than her.
It's important to be thankful for what you can. I suppose it depends on where you came from, but I was the last generation of Californian who experienced $11 per credit hour community college, which was how I started out and became the first person in my family to ever graduate college. Everyone holds a grudge against Boomers, and sure, my parents bought a $50,000 house when I was born they eventually sold for just shy of a million, but that took 40 years. I make that much money every three years. My dad got a nice, dependable job with a pension, which is wonderful, but he also did physical labor his entire life and can barely enjoy his retirement because his knees, hips, and back are all shot to shit.
We all experience both good and bad luck and I struggle to lament my generation. I'm just grateful to have been born in the late 20th century at all. I had a bad enough lung infection as a child that I'd have almost certainly not lived to see 5 if I'd been born before penicillin was discovered. That was the reality almost all of my ancestors lived with.
Re: Generational Luck in the Housing Market
#67Earlier 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
You dropped the 1/ 1/(Median Household Income in the United States/All-Transactions House Price Index for the United States)
both indexes next to each other are maybe more intuitive: https://fred.stlouisfed.org/graph/?g=1jzxK
Re: Generational Luck in the Housing Market
#68Earlier quoted context omitted.
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
> interest only mortgages are a completely degenerate financial product that shouldn't exist Like, at all? Or for individuals? Maybe only for poor individuals?
The most obscene part of this is when asset-holders try to blame the problem on their victims (the people who must pay higher prices for the pumped assets). The leverage is not generosity, it is a curse.
Re: Generational Luck in the Housing Market
#69I'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 1980 and do not feel this at all. Sure, I hit some bad times in my 20s but that was a long time ago. Right now, I own multiple homes that are worth more than double what I purchased, financed all around 2%, with under 7 years until it's all paid off at current rate, and housing expense is less than 10% of my income. In contrast, all of my younger sisters are much worse off right now. ZIRP may be great i…
One hundred percent. Every generation today is blessed. To be clear, we’re complaining about owning an asset that has historically been a marker of the elite.
Re: Generational Luck in the Housing Market
#70Earlier quoted context omitted.
> interest only mortgages are a completely degenerate financial product that shouldn't exist Like, at all? Or for individuals? Maybe only for poor individuals?
Increasing available leverage provides an immediate windfall to asset-holders. This is why our economy errs so heavily on the side of encouraging too much leverage: the world is run by asset-holders, for asset-holders. The most obscene part of this is when asset-holders try to blame the problem on their victims (the people who must pay higher prices for the pumped assets). The leverage is not generosity, it is a curs…
How are the latter, those procuring assets, not also asset holders?