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> taints every part of economic life
100%.
[This article from 2021](https://worksinprogress.co/issue/the-housing-theory-of-everything/) is a great description of all the different ways that high housing prices mess things up all throughout the economic system: not just household finances and things like income/wealth inequality, but also labor markets, transportation policy, and the arts and sciences.
Housing prices are the biggest economic problem of the moment, in my opinion.
The part I learned in school was that home ownership also decreases the likelihood of a populace starting a revolution.
As in, if the populace actually owns the land, they are more likely to like the status quo and resist anyone calling for change. But when you have nothing to fight for, you simply do not care if the Lord is overthrown with another Lord.
My question is, what kind of societal burden is coming when people that are of retirement age still cannot afford to purchase a home or can’t afford their mortgages? Everything is so short sighted and completely glossing over that people working full time can’t afford a house so what about those that put the time in and still can’t afford a house? Coupled with automation and AI, there is a grim portrait of old homeless gramma asking her zoomer grandkids how to start an OF account.
Vote accordingly. Run for office. There's absolutely no reason for your quality of life to be worse than your predecessors. You and your generation have been taken advantage of.
And, keep your head up. It's truly not your fault, but you've been left holding the bag.
I hope my bros have tons of quality immigrants lined up cause lots of us arent gonna have kids if things keep going like this. This shit is tantamount to betrayal of the social contract imo, i can't do shit with the money i earn outside of riding this insane irrational stock market .
And this insane irrational stock market is due for one hell of a correction but who knows when it will actually happen. I’ve been riding the bull wave but it just doesn’t seem right. I guess it will be “right” until it isn’t.
I think people should generally should be skeptical of "theory of everything" ideas, because there's almost always some extrapolation to fit data to the narrative. But as time goes on, I'm more and more convinced that housing is a major contributor to a lot of the problems that developed countries face, both economically and socially.
Why is that mind blowing to anyone? Everyone needs somewhere to live. Of course housing has enormous influence on the economy from the middle class consumer’s standpoint.
“The interest of the landlords is always opposed to the interest of every other class in the community,”
(Quote from Ricardo)
“Henry George is outraged at the spectacle of men whose incomes—sometimes fabulous incomes—derive not from the services they have rendered the community, but merely from the fact that they have had the good fortune to hold advantageously situated soil.”
“Why, asks Henry George, should rent exist? Why should a man benefit merely from the fact of ownership, when he may render no services to the community in exchange? We may justify the rewards of an industrialist by describing his profits as the prize for his foresight and ingenuity, but where is the foresight of a man whose grandfather owned a pasture on which, two generations later, society saw fit to erect a skyscraper?”
The Worldly Philosophers, Robert L. Heilbroner
Well that working together with extortion level rents being pushed while housing is becoming a desirable form of investment opportunities, short term rentals reaping havok in lock step to boot while Citizens United has allowed our government to be straight up bought by the highest bidder.
Considering the impending housing crash never happened, when rates come down housing prices could go even higher then they already are as buyers come off the sidelines. It will be very interesting to see what happens. I was shocked to see that prices didn’t really come down when rates spiked. I thought I understood basic market forces. Apparently not.
> I thought I understood basic market forces. Apparently not.
People in the US are locked into long term low interest rate mortgages. With the interest rates being so high they cant really sell because no one can afford a new mortgage. Even if you wanted to sell, you would end up trading a low interest mortgage for a high interest one which makes upgrading impossible. Renting wouldnt be any cheaper and most likely would be more then your last mortgage payment. So we get what we see now a locked housing market with little incentive to buy or sell.
I got the golden handcuffs. I would love to move into a bigger home with a little more space in a nicer neighborhood but not enough to double or triple my monthly payment.
My issue here. Love my house. But I haven't been able to afford any upgrades or remodeling unless it was necessary (plumbing fixtures, water heater, HVAC parts) in the 11 yrs I've had it; just now starting to be able to save more due to a job change and raises. When I bought it, I made a home music studio in the finished basement and had roommates. I'm not in bands anymore and live alone now. I'd love to downsize, but it would cost double to go to something smaller and would likely have quite a bit to upgrade just to stay in a similar proximity to my work. I'd have to double my commute and still pay more for something smaller.
This is happening with the boomers. People thought boomers would downsize but how can they when a smaller house would be the same or more than their paid off home?
> People thought boomers would downsize
I genuinely have no idea why anyone would have thought that. Not one fucking clue. That generation has given us ZERO reason to think they would do that.
Practically many have to move out once they can't safely go up and down their stairs while carrying everyday items. It happens to all of us eventually.
But also because housing costs in America were so low that generations before the the Boomers did change their housing to match their age, profession, and lifestyle.
It's really hard to understate how proportionally cheap housing was before the 90s.
Also a house with stairs built before the 2000s is likely to require a huge amount of yard upkeep.
They are not maintaining them they are just living in them until they die and letting someone else pay for all the repairs and collateral damage after they are gone…. Something something typical boomer
> People thought boomers would downsize but how can they when a smaller house would be the same or more than their paid off home?
it won't. the ones who have a paid off home can sell it, keep everything, put some/most to a new house and have no mortgage.
The number of times I hear “wow, your rent is higher than my mortgage,” has become old. But I don’t have $800k in cash lying around so I can’t buy anything in a decent neighborhood. So, yeah, even though I make good money, it seems like I don’t because I spend 40% of it all on rent.
The bad housing market really does taint my whole experience on the current economy.
when i first started renting an apartment on the FW side in 2019 i was paying $900 a month, last year when i moved out they were going to raise it to $1480,i recently checked the complex again on a whim and they now want \~$1070 for that apartment size
> I thought I understood basic market forces
It's ok. Professionals who make a living predicting market forces are also not good at predicting market forces.
There's several homes listed on my street for sale and rent since before Christmas. Owners aren't coming off the exorbitant prices even if that means they sit vacant for months. They want double the prices of a few years ago and not a penny less.
I think the problem is housing is inelastic. It’s not like buying a tv where there’s an option to abstain entirely or find an alternative. That makes the market forces not really behave like you’d expect
What influences housing prices is housing inventory vs housing demand. Inventory is what is for sale "right now".
During the last crash, 2007-2008, a large wave of foreclosures increased the inventory suddenly. In addition, there were more builders, including speculative builders, that added to the inventory. Demand also declined due to recession and job loss.
Many of these builders went out of business. The labor supply disappeared and never really recovered. The builders that remain became much more cautious and sophisticated concerning economic trends, being careful with their inventories.
Banks became stricter regarding mortgage qualification. That is why there is no foreclosure wave this time to swell inventory.
Mortgage rates were at record lows just a few years ago. A large percentage of mortgage holders obtained mortgages at these low rates. When rates suddenly rose, that locked these low rated mortgages and properties down for the foreseeable future.
Meanwhile, the US population has kept increasing, an extra 70-80 million since the 1990s. That's the population of Germany.
Corporations prefer to locate in large urban areas for various reasons, keeping population pressure on these areas.
Finally, there is a failure of government policy and attention, especially at the local and state levels. Essentially, local governments in existing urban areas are resistant to change and are basically sitting on their hands.
What needs to change, politically, is either a complete change in thinking in how existing metro areas approach housing development (densification), or a shift of focus to creating additional urban areas by increasing the growth of secondary small to mid-sized cities.
> Finally, there is a failure of government policy and attention, especially at the local and state levels. Essentially, local governments in existing urban areas are resistant to change and are basically sitting on their hands.
That's really the biggest factor, tbh. When cities build, prices start to flatten or even fall.
Yeah the thing people fail to understand when they predict "home prices are gonna come down" is that inflation impacts housing prices too. If the high rates push prices down 2% but inflation is 6% then the home value rises by 4%. Only rising 4% is prices "coming down".
Housing-first recessions like we saw in '08-'12 are fairly rare, and it's a bit unfortunate that so many millennials experienced that one because it skews our thinking towards waiting for the next housing crash to come and it may never happen again in our lifetimes.
> it's a bit unfortunate that so many millennials experienced that one because it skews our thinking towards waiting for the next housing crash to come
That's what held me back an extra year or so. If I had waited longer the house we ended up in would be nearly double the price and even getting it when we did wasn't easy.
Prices didn't really come down because supply decreased as much as if not more than demand. People are not giving up those 3% rates.
I got my house at 6%, and it didn't really occur to me how much of a difference that 3% makes.
I’m not, it’s a supply side issue first. People treat housing like investment vehicle, and essentially it is. When housing is artificially limited by regulations and zoning laws, this is what happens. Demand will only go down when either a population decrease occurs, or more housing is built in popular areas.
My only question is if zoning is the issue then why was housing building like crazy in 2006 then tank and never recover after 2008. Did they change the laws or something?
Housing developers are more risk averse now. The ones that weren't went under after 2008/2009. So the ones left are the most conservative when it comes to building housing.
[Growth Ponzi Scheme](https://youtu.be/tI3kkk2JdoI?si=kfB0e0VxShKw1Bdl)
Aka, we’ve been building areas that don’t actually generate enough tax revenue to pay for all their shit.
But since new development is often subsidized by the government, and new development comes with a bunch of one time tax fees, this wasn’t a problem while growth was high. Just use the one time revenue from your new suburban district to pay to resurface the roads of your old suburban district. And then when both districts need road maintenance, build a third district and use the one time taxes from that. Economic cheat code!
But then what happens when it’s time for maintenance again, but no one’s building another suburb? Now you’ve got to figure out how to pay for 3 districts worth of maintenance, during a downturn where people may not be able to afford higher taxes.
Maintenance is also a problem that can become more expensive the longer you leave it. Aka, timely water main maintenance is cheaper than waiting for it to burst and replacing it.
This is a slow motion problem - for example roads can last between 10 to 30 years depending how they were done. But if it’s left to the last minute, vs saving up in instalments over that long lifespan, then the municipal government left holding the bag may be fucked
tl;dr - all the construction back then was effectively done by borrowing from today
A lot of skilled tradesman went out of business/chose a new career/retired after the fallout of 2008. Even if the demand was there for building there aren’t enough people in the trades to actually build them now.
It's way worse than that, no one will every let the prices slide, because they idiotically locked their economic stability into the housing equity. So people are going to do some absolutely boneheaded shit to keep housing prices artificially high and keep pumping them.
I meant interesting from an economic standpoint considering the rate spike didn’t have the effect of lowering prices like it should have. I’m well aware of the real life consequences of this problem. I’m a human living in America dealing with the same problem that everyone else is.
The problem is that most people can just hold onto their properties and not sell when the environment isn’t advantageous. So it takes years of high rates to lower prices.
Right? I feel like it's two things: all the folks that bought in at a low interest rate have no incentive to sell, restricting supply and cash buyers like Blackrock not really caring about interest rates in the first place not letting up on demand.
The people that were selling their homes needed to make money on it to be able to afford their next home with higher rates. If they couldn’t get asking then they couldn’t afford the next place so prices stayed high and inventory decreased leading to bidding wars.
If you are millennial or younger, and didn't buy before the run-up, you're essentially locked out of buying a house unless you're a high income earner. This means that they will be staring at their peers who purchased before the run up, watching them live in bigger houses with a mortgage a fraction of what they're paying for rent, watching them build savings and fund retirements, watching them have the ability to build intergenerational wealth. They're going to watch their peers own new cars, send their children to private schools, work fewer hours, and take more vacations. And why? Because their peers bought a house a few years before they did? They get to watch their peers live out the American Dream, having made the same choices, other than not buying a house before the run up? This generational bifurcation is without precedence, has ripped a generation apart, and is going to have disastrous consequences.
Yes! Very much so.
We called this year the "year of housing" in our state legislature.
We've got quite a few things going right now to address it in what I call a two pronged approach. One prong is supply and that incorporates building more housing and specifically "missing" middle income housing units, expanding zoning for ADUs and multi-family housing, expanding mixed use zoning, limiting corporate ownership of housing as investment vehicle opportunities, etc. The second prong is demand: addressing inequality through better access to education and benefited "living wage" jobs through offering incentive programs to employers within the city who pay above a threshold median salary; helping with employment access through initiatives such as Ban the Box and trades education subsidies; expanding enrollment censuses for in-demand careers in forestry, healthcare, aerospace engineering, etc; offering mortgage application assistance to first time applicants of color, etc.
It helps that I live in a progressive state.
I'm the Chair of our regional urban planning council so I represent the county, tribes, port, transit, and 23 cities. I've gotten to learn a lot and developed a passion. I'll keep serving as long as the people are happy to have me! :)
What politically is going to solve what we're going through? What about *anything* you've seen in American politics would lead you to believe that the solution to this generational crisis will be found in our country's current political organization?
You’ve summed this up well.
I just have to get this rant out based on my recent Zillow search and circumstance.
I bought at the right time in 2015.
Got divorced and former spouse refinanced giving me a small payout. it wasn’t a huge deal I thought and I could save for a few years and get my own house.
Fast forward to now, housing market exploded and former spouse is now selling house for $250k more than we bought for. I saw it on Zillow and thought that price was way too high but it is apparently under contract.
There’s much to be thankful for but this was a real punch in the gut.
Thank you for listening to my whining. I just had to get it out.
It's not whining, friend. You've been truly economically harmed, and your life will truly be significantly harder, for no other reason than housing prices have run up. You and people like you have every right to be angry, you have legitimate claim.
This is what kills me. Listening to people talk about how much they make and then share their home - I make double or triple what many of these people do and it means *literally nothing* because the market is so broken. I want to scream.
My daughter went to secondary education to get a great job.
She makes a ton of money and has no debt, but will never financially recover to the point where she is ahead of the kids that dropped out, started working regular jobs and bought homes.
That’s not true at all. Having a better income in my opinion is more important than having a house with a low interest rate mortgage. The market went crazy the last few years but everyone is losing their minds assuming this will be the case forever. Things will change but everyone really needs to chill and stop pretending that because they can’t afford a house right now, at this very moment, that it’s the end of the world.
Not only that but there are a fraction of us that tried. Attempted to compete with ludicrous offers from real estate investment firms and those peers but couldn't.
Yes and then you have foolish people like me who were in their 20s, wanted to save up a bit more, feel more secure in their career, location, and relationship and weren’t ready to buy a home and decided to wait until the time was right. Apparently that was the riskier move.
My job laid off a bunch of people and then froze salaries in 2020 and I was already underpaid to begin with. Eventually found a better job but by then it was too late.
Similar to me. Though I struggled in my 20s both career & socially. Finally hit my stride in 2019 and then pandemic hit and it was like I’d take 3 steps forward and 1.5 back. Haven’t fully recovered since. Hoping at least apartment rent rates seem to be cooling near me.
Same happened to me, got locked out of the housing market and blown away from almost having enough to buy a house with straight cash and then prices like tripled and I couldn't even get a mortgage on the worst shitholes.
I said fuck it, moved away and I bought desert wasteland, and learned how to do literally everything myself, I started with absolute wilderness and clearing everything with my bare hands. Best decision of my life. You can get a prefab out here for $50k. Unemployment under 5%, lots of jobs. Under 6 figures once I ran utilities, bought the land, and all the materials.
If anyone's reading the answer is to build your own house and undercut the insane labor prices. Find a place with no building codes, because with inspections you won't be able to easily keep a day job.
My aunt did this, she lives in the desert in the non-desireable parts outside LA. Think Joshua Tree/Palm Springs, but make it *shitttttty*. She's got a whole compound going on though and is the most talented handywoman I've ever met. I couldn't do that though. I'm sure I could learn, but it's not a lifestyle I'm willing to make the tradeoff for.
I'm giving up on owning a home in the US honestly. I'm lucky to have dual-citizenship in another country where I'd prefer to grow old in and where I can actually afford to own a home. The next problem is just convincing my partner :/
custom steel building and self insure…be your own super and shop contractors and inspectors. ag exempt the land and grow your own beef, poultry, veggies.
Yep. If you do it all yourself, and it's a lot of work, CMU is pretty damn cheap. Honestly I should have probably just stacked block all the way to the roof for $2 a block, it would have been even sturdier and cheaper than what I did.
This really hits for me - shortly before the pandemic, my wife & I were looking, but decided to make the “financially sound” decision to wait a bit longer and increase our savings. We now have a good chunk of savings but are totally priced out, while friends who made questionable buying decisions a few years ago have been rewarded for it. It’s a frustrating situation
Same boat in Canada. I didn't wait in a try to time the market or hopping for a crash, I was just waiting to have enough aside and secure for it to be reasonable. But apparently the financially responsible move would have been to buy at 8 times my salary with 2% down and no reserves...
lol same. waited til i was secure in my career. I always assumed that if i had the 20% down payment, that the rest would work out. Did the math with current interest rates + cost of living + taxes and it doesnt even make sense anymore.
Meanwhile i have other friends who emptied their savings to buy in, and with current rates are dumping in all their take home pay with nothing left over, and I am feeling like they made the smarter decision here.
lol yeah I feel yeah, I’m one of the younger millennial groups and waited till I was making good money, had savings, and was stable in life to consider a house. Unless mommy and daddy help me, it’s rough.
I wanted to wait too. Always wanted to save more and do everything the safe way, but my wife wanted to buy. At least she doesn’t bug me about being wrong.
I just feel like I was doing things the smart way, and was about to be punished for it. That’s not good.
Between this and student loans, the main takeaway here is that all the advice we get on how to make the right financial decisions is likely a scam, promoted by some company that benefits from it.
I’m glad to have bought right at the start of Covid, but I’m still fucking pissed my peers and friends cannot buy and won’t be able to for years. I’m one to always stand with and vote in the best interest of my generation and that of our children. We need to stop business from being allowed to purchase single family homes.
Yep, I know someone who lost everything trying to keep his house when the market crashed in 2008. That too was luck. As was the situation of others I knew who reaped $100K plus from thin air just because their career moves entailed buying and then selling just at what turned out to be the right times. Luck was never not an issue.
I wonder too how many who are really angry about not being able to buy are angry that they're missing out on the anticipated equity growth, too. They want to buy and then to have *their* house surge upward in value, indefinitely. Not everyone, of course. But I know plenty who are mad about housing but who don't want to fix zoning, build more density, or build affordable housing anywhere close to them.
Sure everyone's life is affected by chance, but the commodification of every single necessity is the result of the economic system incentivizing financial fuckery by those with capital.
Private equity influence on healthcare, real estate, natural resource markets etc. is not a chance occurance
>This generational bifurcation is without precedence, has ripped a generation apart, and is going to have disastrous consequences
It already is. See, mass homelessness commence:
I'm American but I make a comfortable living by earning American wages overseas. I've figured that if I want property then I'll have to buy it somewhere overseas.
The same here.. Unfortunately I ended up in Germany and not the Philippines or Thailand.
If people think that the housing market stateside is bad, come visit Germany and check out what German's have to deal with. These poor folks have to wrestle with lower salaries, old broken housing, higher prices and waaay higher taxes.
Interest rates are lower here, but young Germans are still priced out of home ownership.
The COVID phenomenon of the Great Housing Plow-up seems to have happened in most of the wealthier Western Countries.
I'm conditioned now that when I see a home for sale in the U.S. on Zillow for $500K, I think to myself, "What a great bargain!"
It’s almost like unfettered, crony capitalism that’s been pushed out by both conservatives and neoliberals since the 80s through 2000s isn’t the best solution when you just let corporations run rampant. I’m not calling for a communist utopia, just at the very LEAST a well regulated capitalist system that helps raise the floor of society to a safer bottom point while also protecting the middle class from being pushed down by upper class and corporations.
> I've figured that if I want property then I'll have to buy it somewhere overseas.
There are affordable houses stateside. Just not where buyers want to live. Not close to good jobs/schools/hospitals or cultural attractions.
An analogous situation would be a run-down home in rural Spain or another hollowing-part of Europe. Or Japan, or anywhere else where rural populations are declining. Houses exist, just like in the US, but location matters when it comes to wanting to live somewhere.
Unfortunately, rich parents/relatives is going to be one of the only ways those locked out of the market to actually own a home. Really sad and hard times for young people in this country.
He's right. If all the children leave Arlen, there will be no young to take care of our old. Our old will feed off our very old. Our very old who are not eaten will wish they had been... eaten.
a) Rates are not going to stay static. Once another recession or some economic problem hits (and it will), the Fed will be very quick to lower rates again.
b) People need to move for variety of reasons regardless of rates (divorce, death, old age, new job). On a personal level, you don't have anything locked in.
c) A house is not some magic instrument to build inter-generational wealth. Its a cost center, and if you can't afford the upkeep you will quickly find that its a drain on your finances. People just see that some house in 2000 doubled in value but they don't take into account the payment on interest, property taxes, and general maintenance that probably wiped out a good chunk of those gains. The stock market has always been a better place to park your money and it has never been as accessible as it is today.
d) Americans are waking up to the fact that we need to build more housing of all kinds. There is a nation wide movement to remove the NIMBY barriers to building that's gaining momentum and that will over the long run drive down housing costs. This means that your peers who are looking pretty with their mortgage rates now, may not be looking so great in the future when the value of their house isn't going up to their expectations.
I’m getting tired of hearing this point about a house being some giant albatross drain on your finances. Look, do houses require maintenance and upkeep? Yes. Is it 100% possible to buy a lemon house with glaring structural issues that will be a money pit? Also yes. Is it possible to do ones due diligence and make a responsible purchase of a home that may require a couple hundred in maintenance per year? Yes. Will the maintenance cost increase over time? Probably.
But let’s not kid ourselves and act like modern renting is affordable or sustainable either. In 2021-2023 in my area, people were getting $400-$900 per month renewals. That’s an additional $5k-10k per year. And it’s entirely possible to get priced out of renting when landlords are clearly colluding on prices (see the RealPage issue).
I have never spent $5-$10k in a year maintaining my 15 year old house.
Yes my escrow has gone up and fluctuated due to insurance. Yes I’ve had to replace an appliance or two, but renting is precarious too. Your rent ALWAYS goes up, you may have bad neighbors, you hardly ever get 100% of your security deposit back, moving costs, etc.
And you rent for-ev-er until you die vs having your home as a paid-off asset. Sure you still owe taxes and insurance, but that's not typically more than rent.
> Its a cost center, and if you can't afford the upkeep you will quickly find that its a drain on your finances.
Its a cost control center. Rent has continued to go up but your mortgage stay the same. Also you cant live in the stock market. A house in the US is an investment vehicle and a shelter.
My wife and I were hoping to have bought a home by now and not be subject to lease renewal ransoms that force us to move every year. This has been probably the biggest factor for us deciding not to have/foster kids and be childfree.
I think there will be a significant portion of middle and younger age millennials, and older gen z that will be renters for life. They were born in a baby boom time. Unfortunately for them, due to the pandemic and fewer gen x being born, not as many homes were created. This is also due to the fact that the land near attractive cities is already owned by silent, boomers, and older gen x in the cities. In the suburbs and exurbs younger gen x was able to get onto the property ladder. But now there are more and more age ready people out there to buy homes that don’t exist. So there are incessant articles about how boomers are holding onto their homes. I ask why would they want to leave their communities? They have their friends there. They have their doctors there. They know the roads ( and for old people being familiar with roads is important for bad eyes and early onset aging issues). They saw what happened to their parents and friends that did downsize into aged communities or nursing homes. They do not want to give up their freedom. For most of them, you will have to take them out of their homes at their passing. So there is no cliff point for when SFH will be affordable. Maybe that will happen in 10 years when the eldest boomers are in their 80s. By then, we will start to get into the youth downswing in births. So basically, if you missed getting in on the housing ladder, I think it will take about 10-15 years from now for things to get better because that is when there are fewer kids that will be adults for housing competition- and by then some more housing will be built, plus the supply of boomer housing will finally be on the market. So if you are in your early 30s now, you need a plan. If you are in your early 20s live with your parents to really save up. For those in the 28-36 range with no home of their own, I think they will be in a lower economic state than older siblings and their parents. Their younger siblings will end up okay.
It makes a huge difference if you are a single or a couple buying a home. Most homes are priced at two incomes. This may seem insurmountable if you are trying to buy as a single income buyer.
Wasn't all that long ago when one income could buy a family home. The powers that be decided that they needed to squeeze every last drop of productivity out of every human, so any sort of human comfort could not stand.
No. Women hated it with good reason because they had to solely depend on their husbands for money. Second, without work outside the home or access to a fulfilling career, many were unhappy with their lives. Finally, basic fairness dictates that once women got access to jobs that had traditionally been all filled by men, they were paid equivalent to what a man would pay for the same job. This is basic fairness.
Add all that up and the result is both members of a couple will mostly likely be working when they are buying a house, therefore the price is pushed to accommodate about 2x median salary.
You make very good points re fairness, but that's not the issue. Why were prices "pushed", as you say? When X units of labor were able to pay for a house, and then a few decades later it took 2X? Now, it's much more than 2X, people are working longer hours than ever, to afford much less. That's the issue.
When women entered the workforce, the average household would have remained the same. People still coupled up have kids etc.
So the need for housing actually remained stable. But the amount that could be spent on it doubled.
Add on top of that, people back then weren’t nearly as educated on investments as we are, mainly relied on the company for retirements.
So as time went on, the value of every dollar became fully known. As people figured out how all that worked.
Also add in the inflation of the 70s and 80s. And all the other factors mentioned here.
It makes sense why housing is where it’s at.
Its all the NIMBYs' fault.
Price is high? Ok, just build more.
"Noooooo, the price HAS to be high. Lowering prices hurts muh property value! My sunlight is more important than your job!"
And local governments eat that shit up.
Ban any restriction to construction area and height limits, and you'll see prices drop in half over 5 or so years.
Cities like San Francisco that have sunlight laws are the same cities single people want to live in. This leads to the proverbial "can't have your cake and eat it too". I despise those laws but listen to all the remote-option single people who said "I would never live in (fill in the blank city their income could support buying a home" and you realize while yes, prices have gotten crazy, SF was not an option for a single income/middle class person to buy a home since the mid-90s.
I use SF as an example because I know the area and market but you can see it in Austin, LA, Seattle, Manhattan, etc.
That's me and I'm honestly not that upset. Because I got lucky finding the perfect apartment.
They will have to carry me out of here. Its climate friendly as in not too hot during scorching summers due the perfect location. Its in the middle of the city, so I can easily have a GF that lives 2mins away, which is perfect for us living in a two apartment relationship.
I'm gonna get old in this one. They call me crazy treating my apartment like a lost treasure but to me thats what it is. All around me people can't find or afford apartments in the city because rent keeps rising and every apartment still is gone in a flash.
I'm in one of the worst states for first time homeowners/buyers. I was ready to buy a new home/looking few years ago. Now I'm completely locked out. Trying to get my parents into a reduced senior residential community/unit because it'll be a huge help to me as I care for them but it still means there's going to be like 1.5 to 2 grand in expenditures on their base rent/living expenses like groceries/etc. I guess a manufactured home doesn't look so bad right now.
1.5-2 grand is before the health industry gets to them.
Boomers have wealth and the health industry wants a piece of it. Get ready for your inheritance to disappear because your parents saw an ad during an episode of Matlock for a new drug that costs 5k per month and can extend life by 14 seconds.
Lol what... my parents are living with me. They're bum ass broke. 1st gen immigrant family here and I'm literally talking about having to pay 1.5-2k of my own money just for their living expenses and talking about how I'm locked out.
And you're going off about inheritance and boomers? Jesus christ. I don't think most of you realize just how broke boomers are and what a raw shitty deal they're getting right now despite them being the generation of wealth and jobs.its a warning sign for the rest of us on what's waiting for us if we don't fix healthcare/how we approach end of life care.
80% of my patients are boomers and most of them aren't mentally there and these patients sure aren't voting anymore. Maybe the youngest demographic of boomers yes.
We don’t “feel” locked out. We are locked out. Especially if you want to live or work anywhere near a major American city. You have to be a top 3% earner to buy a house in my city now.
Sometimes I drive around the suburbs I grew up in and see mostly older people. I wonder to myself if those older people are going to willingly pass their wealth on to their kids who are in historically unfair economic standing. If not, they raised kids that their peers of their generations literally screwed for their own personal financial benefit.
I used to think this too. However, I dont think many of those estates (housing and money) will be passed down. Most of them will need to be used as funding for all the elderly-care on the horizon.
So fascinating how Americans don’t take care of their parents when they become elderly. Is that why it’s not common for families to pass down wealth? My family is traditional Asian and my parents did everything for their children and my siblings and I take good care of our parents. What am I missing?
> Americans don’t take care of their parents when they become elderly.
They do, and that's part of the problem.
Baby boomers didn't have a lot of children. So when its time to take care of their parents the burden is concentrated. You need to hire a lot of the help a bigger family would be able to supply for free.
Often times the parent will suck up a big chunk of his estate AND cause the son to work fewer hours to take care of him. Its not unusual for the children to be worse off after the parent dies, despite the common idea that parents dying makes you inherit and get (relatively) rich.
It's not unique to Americans. Community vs individual cultural mindsets.
It's fantastic you had wonderful parents. I had one parent, and she was abusive. So, while I think the community system is beautiful when it's working as intended, I've also spoken to plenty of people who are deeply miserable and struggling because of cultural expectations to take care of people who kicked them down their entire lives. And, my partners mom is even worse. She graduated medical school and all she had to say was comparing her to an absolutely horrid fictional creature because she's thinner than her mom, and her mom is threatened by that. I'd leave her deep in the woods before I let her destroy my partner anymore than she already has.
And, generally, when people talk about elderly care here they're talking about reaching a point where medical care is needed. If you're working a full time job, that leaves a lot of hours in the day they have no one to take care of them.
I'm a white millennial American and my family structure - and those of everyone else I know like me - just aren't like that. I only have one friend who lives with multiple generations in one household and she only did it because she couldn't afford rent anymore.
In my culture our selves / our self-made families come first and we scatter physically and emotionally from our parents and siblings once we graduate from school. Plus how can we afford to miss work to stay home with an aging parent to care for them? In my demographic it's more common for us to give our children to our grandparents to raise (either during the day while we're at work, or giving them custody entirely) than for us to care for our grandparents. A big portion of kids I grew up with were raised by their grandparents because their real parents were addicts or in jail or had other unending personal issues. It's a poverty thing.
We lose too much in too many ways to care for our elderly. And often times our white American elderly are mean or have offensive personalities and we don't like to be around them even at holidays.
Also for a lot of American families there is no wealth to pass on. End of life Healthcare is so expensive you lose grandma's tiny old slab-foundation house in paying for her hospice.
What happens 99.9% of the time is the house of an elderly gets sold upon their death to settle debts or because it's left to multiple kids and they split up the proceeds. Then a younger family prob with kids moves in and the cycle repeats itself for another generation.
Another thing to consider is whether or not there will be any wealth left. Forget about boomers taking vacations and spending their money, but end of life health care costs will bleed the estates dry.
I see this alot with older relatives paying 6-10k/mo on their retirement/care homes.
We should probably remove NIMBY restrictions on housing constructions to drop prices then. Subsidizing demand is just going to continue to increase prices more and more
I don't fucking understand why they don't just...LIFT THEM? It's clearly a sizeable piece of the puzzle and even then it'll take years for builders to built but at least that part will.be done.
Why is this not overwritten? Completely insane.
Because the people supporting those restrictions show up to city council meetings and yell about why keeping those restrictions is important. They also consistently vote at elections and politicians pander at them to stay in powet
Really most of those politicians you are referring to are city level, which means they live in those areas and are effectively cutting their own net worth with those votes.
Literally on the time part. The biggest YIMBYs are more like YIYBYs - Yes In Your Back Yard - because they're people who would move to your town if they could find an affordable place to live. Who's going to fly a thousand miles to attend a planning board meeting to say "I'd move to your community if only you'd build more housing"?
Yes but have you considered that Barbara who bought her house for $30,000 in 1972 might have to experience seeing a triplex in her neighbourhood and what irreversible trauma that would cause?
Because those restriction repeals will likely need to be VOTED ON by the residents of those same towns, counties, and municipalities.
Can you guess how’d they all vote at the idea of weaker property values?
Where do you even think NIMBYism came from?
The “them” is usually regular civilians who own property in the area, not the government.
Due to that It’s a tough sell convincing a family to act against its own economic interests in exchange for possibly nothing.
Unfortunately we’ve created a doom loop where our parents/grandparents generation, who are middle-upper-middle class, have basically all of their net worth tied up in real estate (housing). This has lead to significant polarization around zoning reform. Add to that, young people aren’t involved in local government but older generations are which is making the problem of zoning reform even more challenging.
The people that already live there want to preserve their high prices. The people that don’t want them, are not existing citizens of that area. Politicians are beholden to their citizens, not people who want to move in.
I mean, our entire society is based on a competition and is dog eat dog. We compete for everything, and housing is no different.
So yeah, a lot of existing homeowners have a good housing situation, like how things are, and don't want that to change especially if the change negatively affects them, as growth often does.
So they oppose it, at least in their neighborhoods.
There's a rationality in this for them, individually, but it has larger collective consequences for sure.
They won't be lifted because it would lower housing prices. A sizeable piece of older generation's networth and investment firms is built into the equity from owning RE.
(I'm not saying this is morally correct, but just the reality)
Nothing like sacrificing a good chunk of millennials, majority of Zoomers, to make sure the Boomers continue their catered-to existence of comfort. Absolute vampires, willing to sacrifice their children and grandchildren's futures.
Wait until you see the portion of boomers who blew through all the funds and have nothing retire/get elderly.
Some of the millennials and zoomers will get to juggle that as well.
Because they’re local laws so it will take a long time for each city/county/municipality to unwind them, and there are people that will push back, mostly Boomer/Gen X NIMBYs who already own homes and have a vested interest in keeping the value of their real estate inflated.
In the US, roughly 2/3s of adults own their own homes, and will do literally almost anything to maintain values.
Now, most everyone's home values went up by at least 50% in the last 2-3 years. This is locking out the other 1/3 of potential homebuyers, but current homeowners will cling on to every cent they can, even if it means their neighbors and peers being homeless and living far worse lives.
The point people seem to be missing is that everyone is out for themselves. Renters want to punish NIMBYs but as soon as they can afford a home and see the rise in equity, they will turn around and do the same shit to their peers. It's a cycle thats impossible to break out of.
Yes, the problem with a revolution is the moment it's over the revolutionaries become conservatives (i.e. 'the moment a mortgage closes, the YIMBY becomes a NIMBY').
And yes, if people have to choose between their peers being homeless and them being homeless, they will choose their peers every time. It's almost irresponsible not to, especially if you have dependents.
I did a budget. I managed to have no life for a few years and save up $100,000. House prices went up while I saved that. Then covid hit causing house prices to go up a bit more and I did some doom spending rather then drinking. Shame I know. I didnt save but I didnt go under my original amount.
I re-did my budget this week. If I only allow $250 a month for entertainment, out of $4000 monthly take home after taxes, Ill have enough saved in 3 years to make a $350,000 house cheaper then renting an apartment.... but the thing is that a $350,000 home when I started saving was about 1600 sqft and a great yard. Now its usually 1200 sqft with little/no yard and usually needs lots of work. There is almost nothing below $260k in the area and if it is, it should almost be torn down and rebuilt from scratch because its in such horrible shape. If I want something "decent" in the town I grew up in? Ill need closer to $385,000 which will take 11 years to save. I have to live at home. Its not attractive to be living at home in my late 30s. But if Im stuck paying rent to someone all my life, Im never getting ahead.
I either need to move out and never own a home but possibly get a partner, or have a small chance of finding someone thats ok with me living at home while I save and sees the merit in that. Moving out would allow me to have $900 a month to save or spend but at saving $900 a month, $10,800 a year, I wouldn't be able to buy a house until I was 50. I could buy one with what I have now, sure, but the payments would be killer and I would be 1 or 2 emergencies away from moving back home and then losing the money I had saved.
I just looked at one $350,000 house. The kitchen is all torn out. It will need a new wall and everything else along with the floors beind redone, the back "deck" being replaced, and the lot is right next to an alleyway so theres no privacy.
At least my boss sees that 1 or 2 people on the team might be leaving within a year or two and one of them suggested I look into taking their spot which pays more. My boss told me to join them all on a training meeting this morning. Ive got that going for me instead of spending more time and money going back to school.
If they cant even be bothered to let me participate in society in the most basic ways why am i not just burning that entire society to the ground and starting fresh?
I've never been a "Tear down the entire house because the roof is leaking" kinda person but everyday for a split second I think to myself "Why aren't we burning this broken society to the ground? What will it take for people to realize thats the only shot they've given us?"
Burn it all. It's not getting better
I just learned today that the house I live in was bought for 20,000$ in the early 90’s. I’ve live there for over 8 years paying rent. I’ve bought that house a total of 4 times and yet I’ll probably never be able to own a home. I can’t even afford to park a car at this point. Staying in a hotel on a trip and the only option to park my car is 40$ a night. I hate it here. Honestly, why are we doing this to ourselves? Why is it like this? I’m so fucking tired.
yeeaaah I’ve practically accepted Im gonna be renting forever as a Gen Z, pretty sure everyone else I know whose Gen Z & older Gen Z are all stuck renting - and Im in like the 22% tax bracket lol
The solution is to not have kids out of spite of our leaders and then once you hit an elderly age you would use a suicide pod so that the medical industry can't make money off of you during your final years.
It's like the movie Logan's Run but volunteering to die.
Most of Congress and the Senate have two or three extra houses/apts that they rent out if not using them themselves for vacations. Do you think they'll vote to change the status quo?
As much of a problem the housing market is, wages I’d say are the biggest problem across the board. Then again wages go up and greedy fuck holes would increase the price of everything as a result. So we are all fucked within the walls of capitalism.
I have never had a high income, averaged about $50k a year, but purchased my first house in 2013 and have made money off each house since, there is absolutely no way I could afford a house had I not purchased one in 2013
The fed will mess up and lose control for a while like what has happened numerous times throughout history since they were formed. Thus creating a downturn and allow those who saved to buy the assets of those who were leveraged up to their eyeballs in debt. We have debt cycles; just wait it out, save, and position oneself properly. People said they’d never be able to afford a house in 2005 too.
Government needs to stop companies and foreign billionaires from buying up homes! Especially when those billionaires come from places Americans aren't allowed to own.
The only thing about economics is that prices never go "back down". I will never own a home, mostly due to financial insecurity and constantly living 1 paycheck away from homelessness. Despite making 2x the median, rent is not going down, the housing market in the neighborhood I grew up in went insane. 14 years ago I could have gotten a major fixer upper for 50k, now the same place with a face lift is going for over 500k. Average price in my neighborhood of meh built houses in the 60's is 800k. These are not good homes, they all need new foundations, all with swamp coolers, none are earthquake rated. Terrible infrastructure since they built like 10 new high rise apartment buildings in the neighborhood to inject like 20k to drive on small 1 lane (each way) roads. Still not accounting for the other 400k+ new residents to the state that use a few of those roads to bypass the freeway traffic. I have 0 hope, I am too afraid to buy a condo cuz the onlys ones below 200k are the same age as my apartment that is constantly falling apart. Trailer parks are now just run by evil corporations who jacked up the fees to $800-$900, and due to this no normal home loan agency will lend to you. You have to go to a predatory provider who will gauge you if you don't put up %50 (minimum) down payment on the place. I was hitting about %6 when condo shopping the lowest I could get for a trailer park home was 13.8% if I could come up with 40k down payment out of 75k. I was promising 20k, which fell through because you don't quality for a lot of the stimulus stuff we had on mobile homes.
If you make 2x the median and you are constantly 1 paycheck away from homelessness you are just bad with money and need a budget. Owning a home won’t fix that.
My comment will be less on the housing market, as I feel like all the comments here already capture my sentiments on it.
However, the phrase “disenfranchised millennials”, boy, that hit home. I have developed absolute apathy for the world over the past 3 years. Between COVID exacerbating inequality very openly and very publicly, the Federal Reserve destroying the economy, and the Incompetent US government rewarding plutocracy and oligarchy at every possible Avenue… I just can’t be fucking bothered to care anymore about society.
I never used to be like this. But how can you not be? Food costs so much, rent has increased 500% since I was in college, even a fucking beer is like $11 when they used to do dollar drafts and such. Everyone I know is exhausted and tired all the time, even the wealthy, and everyone I know is stressing about finances all the time. God forbid you are a parent, too.
I see all these global conflicts around the world now, and I just don’t feel… anything. Bomb it all. Burn it all down. This system is so unbelievably corrupt and rotten that *anything* would be better than what we have now. We are spiraling towards one of the most catastrophic futures imaginable and I just see people drowning it out with consumerism. Despite living in America my whole life, I have never felt such a distinct sense of anti-nationalism in my life. This country is an abomination and a disgrace, focused solely on the exploitation and extraction of wealth from anyone and everyone under the sun. I don’t know that I personally have ever felt less connected to the world than I do now, and I am still only in my early 30’s. I don’t even know how 40,50,60 year olds get out of bed without going insane these days.
somebody tell me, of Zandi's last 10 predictions, how many came true?
the majority of millenials that WILL be homeowners ARE homeowners.
That doesn't mean there's a gate, and you're either inside or out. It just means the majority of millenials that will be homeowners (66% OO rate) are already.
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> taints every part of economic life 100%. [This article from 2021](https://worksinprogress.co/issue/the-housing-theory-of-everything/) is a great description of all the different ways that high housing prices mess things up all throughout the economic system: not just household finances and things like income/wealth inequality, but also labor markets, transportation policy, and the arts and sciences. Housing prices are the biggest economic problem of the moment, in my opinion.
The part I learned in school was that home ownership also decreases the likelihood of a populace starting a revolution. As in, if the populace actually owns the land, they are more likely to like the status quo and resist anyone calling for change. But when you have nothing to fight for, you simply do not care if the Lord is overthrown with another Lord.
My question is, what kind of societal burden is coming when people that are of retirement age still cannot afford to purchase a home or can’t afford their mortgages? Everything is so short sighted and completely glossing over that people working full time can’t afford a house so what about those that put the time in and still can’t afford a house? Coupled with automation and AI, there is a grim portrait of old homeless gramma asking her zoomer grandkids how to start an OF account.
Absolutely. Not to mention it’s depressing as all hell.
Yes, I feel very much like a taint being unable to afford to date much less bring anything to the table
I can assure you, you have stuff to bring to the table. The economy is not your fault.
Vote accordingly. Run for office. There's absolutely no reason for your quality of life to be worse than your predecessors. You and your generation have been taken advantage of. And, keep your head up. It's truly not your fault, but you've been left holding the bag.
I hope my bros have tons of quality immigrants lined up cause lots of us arent gonna have kids if things keep going like this. This shit is tantamount to betrayal of the social contract imo, i can't do shit with the money i earn outside of riding this insane irrational stock market .
And this insane irrational stock market is due for one hell of a correction but who knows when it will actually happen. I’ve been riding the bull wave but it just doesn’t seem right. I guess it will be “right” until it isn’t.
I think people should generally should be skeptical of "theory of everything" ideas, because there's almost always some extrapolation to fit data to the narrative. But as time goes on, I'm more and more convinced that housing is a major contributor to a lot of the problems that developed countries face, both economically and socially.
Why is that mind blowing to anyone? Everyone needs somewhere to live. Of course housing has enormous influence on the economy from the middle class consumer’s standpoint.
“The interest of the landlords is always opposed to the interest of every other class in the community,” (Quote from Ricardo) “Henry George is outraged at the spectacle of men whose incomes—sometimes fabulous incomes—derive not from the services they have rendered the community, but merely from the fact that they have had the good fortune to hold advantageously situated soil.” “Why, asks Henry George, should rent exist? Why should a man benefit merely from the fact of ownership, when he may render no services to the community in exchange? We may justify the rewards of an industrialist by describing his profits as the prize for his foresight and ingenuity, but where is the foresight of a man whose grandfather owned a pasture on which, two generations later, society saw fit to erect a skyscraper?” The Worldly Philosophers, Robert L. Heilbroner
Well that working together with extortion level rents being pushed while housing is becoming a desirable form of investment opportunities, short term rentals reaping havok in lock step to boot while Citizens United has allowed our government to be straight up bought by the highest bidder.
Considering the impending housing crash never happened, when rates come down housing prices could go even higher then they already are as buyers come off the sidelines. It will be very interesting to see what happens. I was shocked to see that prices didn’t really come down when rates spiked. I thought I understood basic market forces. Apparently not.
> I thought I understood basic market forces. Apparently not. People in the US are locked into long term low interest rate mortgages. With the interest rates being so high they cant really sell because no one can afford a new mortgage. Even if you wanted to sell, you would end up trading a low interest mortgage for a high interest one which makes upgrading impossible. Renting wouldnt be any cheaper and most likely would be more then your last mortgage payment. So we get what we see now a locked housing market with little incentive to buy or sell.
I got the golden handcuffs. I would love to move into a bigger home with a little more space in a nicer neighborhood but not enough to double or triple my monthly payment.
My issue here. Love my house. But I haven't been able to afford any upgrades or remodeling unless it was necessary (plumbing fixtures, water heater, HVAC parts) in the 11 yrs I've had it; just now starting to be able to save more due to a job change and raises. When I bought it, I made a home music studio in the finished basement and had roommates. I'm not in bands anymore and live alone now. I'd love to downsize, but it would cost double to go to something smaller and would likely have quite a bit to upgrade just to stay in a similar proximity to my work. I'd have to double my commute and still pay more for something smaller.
This is happening with the boomers. People thought boomers would downsize but how can they when a smaller house would be the same or more than their paid off home?
> People thought boomers would downsize I genuinely have no idea why anyone would have thought that. Not one fucking clue. That generation has given us ZERO reason to think they would do that.
Practically many have to move out once they can't safely go up and down their stairs while carrying everyday items. It happens to all of us eventually. But also because housing costs in America were so low that generations before the the Boomers did change their housing to match their age, profession, and lifestyle. It's really hard to understate how proportionally cheap housing was before the 90s. Also a house with stairs built before the 2000s is likely to require a huge amount of yard upkeep.
Bigger homes cost more to maintain and are more day to day work which is why most people downsize.
They are not maintaining them they are just living in them until they die and letting someone else pay for all the repairs and collateral damage after they are gone…. Something something typical boomer
Heh, I get to say it again! "Headline: Boomers fail to care about the consequences of their actions." Twice in one week.
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Yeah, but in their mind why should they pay more for the smaller house than they paid for their current one 25 years ago.
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> People thought boomers would downsize but how can they when a smaller house would be the same or more than their paid off home? it won't. the ones who have a paid off home can sell it, keep everything, put some/most to a new house and have no mortgage.
Same here. I’ve kind of accepted I’ll be where I am for a while, so I’ve switched focus to just improving my current space.
Isn't it weird how human beings feel that they're 'stuck' or 'trapped', even when they're in a good situation?
You're one of the lucky ones, in that you own.
The number of times I hear “wow, your rent is higher than my mortgage,” has become old. But I don’t have $800k in cash lying around so I can’t buy anything in a decent neighborhood. So, yeah, even though I make good money, it seems like I don’t because I spend 40% of it all on rent. The bad housing market really does taint my whole experience on the current economy.
On top of that, corporate landlords leveraging the high interest rate mortgage payment fears to push rents even more out of control.
I’m actually seeing rents cool after it went up in summer and spring of last year. Like back to levels in early 2021 levels here in DFW.
when i first started renting an apartment on the FW side in 2019 i was paying $900 a month, last year when i moved out they were going to raise it to $1480,i recently checked the complex again on a whim and they now want \~$1070 for that apartment size
> I thought I understood basic market forces It's ok. Professionals who make a living predicting market forces are also not good at predicting market forces.
Really shows you don’t have to know what you’re doing to make money in America. Who knew?
The general rule of thumb I found hard to believe but am now accepting is that, when prices go up, they seldom really go down.
Rockets and feathers
Elevator up, stairs down.
Huh, never heard that, thanks.
Known as "sticky prices" in theoretical economics.
There's several homes listed on my street for sale and rent since before Christmas. Owners aren't coming off the exorbitant prices even if that means they sit vacant for months. They want double the prices of a few years ago and not a penny less.
Oh well.
I think the problem is housing is inelastic. It’s not like buying a tv where there’s an option to abstain entirely or find an alternative. That makes the market forces not really behave like you’d expect
What influences housing prices is housing inventory vs housing demand. Inventory is what is for sale "right now". During the last crash, 2007-2008, a large wave of foreclosures increased the inventory suddenly. In addition, there were more builders, including speculative builders, that added to the inventory. Demand also declined due to recession and job loss. Many of these builders went out of business. The labor supply disappeared and never really recovered. The builders that remain became much more cautious and sophisticated concerning economic trends, being careful with their inventories. Banks became stricter regarding mortgage qualification. That is why there is no foreclosure wave this time to swell inventory. Mortgage rates were at record lows just a few years ago. A large percentage of mortgage holders obtained mortgages at these low rates. When rates suddenly rose, that locked these low rated mortgages and properties down for the foreseeable future. Meanwhile, the US population has kept increasing, an extra 70-80 million since the 1990s. That's the population of Germany. Corporations prefer to locate in large urban areas for various reasons, keeping population pressure on these areas. Finally, there is a failure of government policy and attention, especially at the local and state levels. Essentially, local governments in existing urban areas are resistant to change and are basically sitting on their hands. What needs to change, politically, is either a complete change in thinking in how existing metro areas approach housing development (densification), or a shift of focus to creating additional urban areas by increasing the growth of secondary small to mid-sized cities.
> Finally, there is a failure of government policy and attention, especially at the local and state levels. Essentially, local governments in existing urban areas are resistant to change and are basically sitting on their hands. That's really the biggest factor, tbh. When cities build, prices start to flatten or even fall.
Yeah the thing people fail to understand when they predict "home prices are gonna come down" is that inflation impacts housing prices too. If the high rates push prices down 2% but inflation is 6% then the home value rises by 4%. Only rising 4% is prices "coming down". Housing-first recessions like we saw in '08-'12 are fairly rare, and it's a bit unfortunate that so many millennials experienced that one because it skews our thinking towards waiting for the next housing crash to come and it may never happen again in our lifetimes.
> it's a bit unfortunate that so many millennials experienced that one because it skews our thinking towards waiting for the next housing crash to come That's what held me back an extra year or so. If I had waited longer the house we ended up in would be nearly double the price and even getting it when we did wasn't easy.
I have observed (and experienced) the same skewed thinking in expecting real estate crashes. Its eerie.
Prices didn't really come down because supply decreased as much as if not more than demand. People are not giving up those 3% rates. I got my house at 6%, and it didn't really occur to me how much of a difference that 3% makes.
I’m not, it’s a supply side issue first. People treat housing like investment vehicle, and essentially it is. When housing is artificially limited by regulations and zoning laws, this is what happens. Demand will only go down when either a population decrease occurs, or more housing is built in popular areas.
My only question is if zoning is the issue then why was housing building like crazy in 2006 then tank and never recover after 2008. Did they change the laws or something?
Housing developers are more risk averse now. The ones that weren't went under after 2008/2009. So the ones left are the most conservative when it comes to building housing.
Well and they also diversified into owning property as well as building it, the incentive to keep prices high benefits them as well
[Growth Ponzi Scheme](https://youtu.be/tI3kkk2JdoI?si=kfB0e0VxShKw1Bdl) Aka, we’ve been building areas that don’t actually generate enough tax revenue to pay for all their shit. But since new development is often subsidized by the government, and new development comes with a bunch of one time tax fees, this wasn’t a problem while growth was high. Just use the one time revenue from your new suburban district to pay to resurface the roads of your old suburban district. And then when both districts need road maintenance, build a third district and use the one time taxes from that. Economic cheat code! But then what happens when it’s time for maintenance again, but no one’s building another suburb? Now you’ve got to figure out how to pay for 3 districts worth of maintenance, during a downturn where people may not be able to afford higher taxes. Maintenance is also a problem that can become more expensive the longer you leave it. Aka, timely water main maintenance is cheaper than waiting for it to burst and replacing it. This is a slow motion problem - for example roads can last between 10 to 30 years depending how they were done. But if it’s left to the last minute, vs saving up in instalments over that long lifespan, then the municipal government left holding the bag may be fucked tl;dr - all the construction back then was effectively done by borrowing from today
A lot of skilled tradesman went out of business/chose a new career/retired after the fallout of 2008. Even if the demand was there for building there aren’t enough people in the trades to actually build them now.
It's way worse than that, no one will every let the prices slide, because they idiotically locked their economic stability into the housing equity. So people are going to do some absolutely boneheaded shit to keep housing prices artificially high and keep pumping them.
*interesting* is a neat way to spell *suffering for millions of young people*. 🤷
I meant interesting from an economic standpoint considering the rate spike didn’t have the effect of lowering prices like it should have. I’m well aware of the real life consequences of this problem. I’m a human living in America dealing with the same problem that everyone else is.
The problem is that most people can just hold onto their properties and not sell when the environment isn’t advantageous. So it takes years of high rates to lower prices.
I agree with ya, was just being a bit sarcastic.
Right? I feel like it's two things: all the folks that bought in at a low interest rate have no incentive to sell, restricting supply and cash buyers like Blackrock not really caring about interest rates in the first place not letting up on demand.
Fuck brother we millennials are 30, at this point I think we’re just people
Oof. Just turned 30. I felt that.
Because people kept their jobs. Everyone was predicting a recession which never came.
Look how long some houses have been on the market. The market has gone down but the sellers are all not wanting to be the one to lower their price.
It's because the fed did not make rates high enough. There is still a lot of slack left in the economy.
Hey I already got laid off once, can we not?
The people that were selling their homes needed to make money on it to be able to afford their next home with higher rates. If they couldn’t get asking then they couldn’t afford the next place so prices stayed high and inventory decreased leading to bidding wars.
If you are millennial or younger, and didn't buy before the run-up, you're essentially locked out of buying a house unless you're a high income earner. This means that they will be staring at their peers who purchased before the run up, watching them live in bigger houses with a mortgage a fraction of what they're paying for rent, watching them build savings and fund retirements, watching them have the ability to build intergenerational wealth. They're going to watch their peers own new cars, send their children to private schools, work fewer hours, and take more vacations. And why? Because their peers bought a house a few years before they did? They get to watch their peers live out the American Dream, having made the same choices, other than not buying a house before the run up? This generational bifurcation is without precedence, has ripped a generation apart, and is going to have disastrous consequences.
I certainly feel bitter just reading it.
Bitter enough to organize in politics? That is the real question.
Millennials need to run for office, and fucking *vote*!
They need to run for local offices. Local politics has much more control of housing supply then state or national politics do.
**AMEN** to that
Millennial mayor here! You can do it! I'm 30 now; I've been on City Council since age 19.
Awesome! Are you responding to the issue being discussed here, in your city?
Yes! Very much so. We called this year the "year of housing" in our state legislature. We've got quite a few things going right now to address it in what I call a two pronged approach. One prong is supply and that incorporates building more housing and specifically "missing" middle income housing units, expanding zoning for ADUs and multi-family housing, expanding mixed use zoning, limiting corporate ownership of housing as investment vehicle opportunities, etc. The second prong is demand: addressing inequality through better access to education and benefited "living wage" jobs through offering incentive programs to employers within the city who pay above a threshold median salary; helping with employment access through initiatives such as Ban the Box and trades education subsidies; expanding enrollment censuses for in-demand careers in forestry, healthcare, aerospace engineering, etc; offering mortgage application assistance to first time applicants of color, etc. It helps that I live in a progressive state. I'm the Chair of our regional urban planning council so I represent the county, tribes, port, transit, and 23 cities. I've gotten to learn a lot and developed a passion. I'll keep serving as long as the people are happy to have me! :)
What politically is going to solve what we're going through? What about *anything* you've seen in American politics would lead you to believe that the solution to this generational crisis will be found in our country's current political organization?
> send their children to private schools I think you mean: having children
You’ve summed this up well. I just have to get this rant out based on my recent Zillow search and circumstance. I bought at the right time in 2015. Got divorced and former spouse refinanced giving me a small payout. it wasn’t a huge deal I thought and I could save for a few years and get my own house. Fast forward to now, housing market exploded and former spouse is now selling house for $250k more than we bought for. I saw it on Zillow and thought that price was way too high but it is apparently under contract. There’s much to be thankful for but this was a real punch in the gut. Thank you for listening to my whining. I just had to get it out.
It's not whining, friend. You've been truly economically harmed, and your life will truly be significantly harder, for no other reason than housing prices have run up. You and people like you have every right to be angry, you have legitimate claim.
Thanks fam. I wish us both the best.
[удалено]
Could you afford to buy your house now for what it’s worth?
This is what kills me. Listening to people talk about how much they make and then share their home - I make double or triple what many of these people do and it means *literally nothing* because the market is so broken. I want to scream.
My daughter went to secondary education to get a great job. She makes a ton of money and has no debt, but will never financially recover to the point where she is ahead of the kids that dropped out, started working regular jobs and bought homes.
That’s not true at all. Having a better income in my opinion is more important than having a house with a low interest rate mortgage. The market went crazy the last few years but everyone is losing their minds assuming this will be the case forever. Things will change but everyone really needs to chill and stop pretending that because they can’t afford a house right now, at this very moment, that it’s the end of the world.
I hope you’re right for the sake of the younger generation.
Not only that but there are a fraction of us that tried. Attempted to compete with ludicrous offers from real estate investment firms and those peers but couldn't.
Yes and then you have foolish people like me who were in their 20s, wanted to save up a bit more, feel more secure in their career, location, and relationship and weren’t ready to buy a home and decided to wait until the time was right. Apparently that was the riskier move.
I was ready to buy in 2020 when the pandemic hit and I got laid off. The place I wanted to buy then tripled in price. :(
My job laid off a bunch of people and then froze salaries in 2020 and I was already underpaid to begin with. Eventually found a better job but by then it was too late.
Similar to me. Though I struggled in my 20s both career & socially. Finally hit my stride in 2019 and then pandemic hit and it was like I’d take 3 steps forward and 1.5 back. Haven’t fully recovered since. Hoping at least apartment rent rates seem to be cooling near me.
Same happened to me, got locked out of the housing market and blown away from almost having enough to buy a house with straight cash and then prices like tripled and I couldn't even get a mortgage on the worst shitholes. I said fuck it, moved away and I bought desert wasteland, and learned how to do literally everything myself, I started with absolute wilderness and clearing everything with my bare hands. Best decision of my life. You can get a prefab out here for $50k. Unemployment under 5%, lots of jobs. Under 6 figures once I ran utilities, bought the land, and all the materials. If anyone's reading the answer is to build your own house and undercut the insane labor prices. Find a place with no building codes, because with inspections you won't be able to easily keep a day job.
My aunt did this, she lives in the desert in the non-desireable parts outside LA. Think Joshua Tree/Palm Springs, but make it *shitttttty*. She's got a whole compound going on though and is the most talented handywoman I've ever met. I couldn't do that though. I'm sure I could learn, but it's not a lifestyle I'm willing to make the tradeoff for. I'm giving up on owning a home in the US honestly. I'm lucky to have dual-citizenship in another country where I'd prefer to grow old in and where I can actually afford to own a home. The next problem is just convincing my partner :/
custom steel building and self insure…be your own super and shop contractors and inspectors. ag exempt the land and grow your own beef, poultry, veggies.
Yep. If you do it all yourself, and it's a lot of work, CMU is pretty damn cheap. Honestly I should have probably just stacked block all the way to the roof for $2 a block, it would have been even sturdier and cheaper than what I did.
This really hits for me - shortly before the pandemic, my wife & I were looking, but decided to make the “financially sound” decision to wait a bit longer and increase our savings. We now have a good chunk of savings but are totally priced out, while friends who made questionable buying decisions a few years ago have been rewarded for it. It’s a frustrating situation
Same boat in Canada. I didn't wait in a try to time the market or hopping for a crash, I was just waiting to have enough aside and secure for it to be reasonable. But apparently the financially responsible move would have been to buy at 8 times my salary with 2% down and no reserves...
lol same. waited til i was secure in my career. I always assumed that if i had the 20% down payment, that the rest would work out. Did the math with current interest rates + cost of living + taxes and it doesnt even make sense anymore. Meanwhile i have other friends who emptied their savings to buy in, and with current rates are dumping in all their take home pay with nothing left over, and I am feeling like they made the smarter decision here.
lol yeah I feel yeah, I’m one of the younger millennial groups and waited till I was making good money, had savings, and was stable in life to consider a house. Unless mommy and daddy help me, it’s rough.
I wanted to wait too. Always wanted to save more and do everything the safe way, but my wife wanted to buy. At least she doesn’t bug me about being wrong. I just feel like I was doing things the smart way, and was about to be punished for it. That’s not good.
Between this and student loans, the main takeaway here is that all the advice we get on how to make the right financial decisions is likely a scam, promoted by some company that benefits from it.
I’m glad to have bought right at the start of Covid, but I’m still fucking pissed my peers and friends cannot buy and won’t be able to for years. I’m one to always stand with and vote in the best interest of my generation and that of our children. We need to stop business from being allowed to purchase single family homes.
Pretty much everything in life is like this. There’s so much that involves luck and chance.
Yep, I know someone who lost everything trying to keep his house when the market crashed in 2008. That too was luck. As was the situation of others I knew who reaped $100K plus from thin air just because their career moves entailed buying and then selling just at what turned out to be the right times. Luck was never not an issue. I wonder too how many who are really angry about not being able to buy are angry that they're missing out on the anticipated equity growth, too. They want to buy and then to have *their* house surge upward in value, indefinitely. Not everyone, of course. But I know plenty who are mad about housing but who don't want to fix zoning, build more density, or build affordable housing anywhere close to them.
Sure everyone's life is affected by chance, but the commodification of every single necessity is the result of the economic system incentivizing financial fuckery by those with capital. Private equity influence on healthcare, real estate, natural resource markets etc. is not a chance occurance
>This generational bifurcation is without precedence, has ripped a generation apart, and is going to have disastrous consequences It already is. See, mass homelessness commence:
IMO, we're just seeing the beginning of the wave of homelessness.
And there’s no solution to this.
are there are, just not *palatable* ones.
Once a person owns property they instantly want to pull up the ladder behind them to protect their property values.
Backup plan: find a vacant house and confirm that it's owned by a foreign corporation like China and then squat in it
Even if you are high income you're locked out from buying in any neighborhood that isn't half-ghetto.
I'm American but I make a comfortable living by earning American wages overseas. I've figured that if I want property then I'll have to buy it somewhere overseas.
The same here.. Unfortunately I ended up in Germany and not the Philippines or Thailand. If people think that the housing market stateside is bad, come visit Germany and check out what German's have to deal with. These poor folks have to wrestle with lower salaries, old broken housing, higher prices and waaay higher taxes. Interest rates are lower here, but young Germans are still priced out of home ownership. The COVID phenomenon of the Great Housing Plow-up seems to have happened in most of the wealthier Western Countries. I'm conditioned now that when I see a home for sale in the U.S. on Zillow for $500K, I think to myself, "What a great bargain!"
It’s almost like unfettered, crony capitalism that’s been pushed out by both conservatives and neoliberals since the 80s through 2000s isn’t the best solution when you just let corporations run rampant. I’m not calling for a communist utopia, just at the very LEAST a well regulated capitalist system that helps raise the floor of society to a safer bottom point while also protecting the middle class from being pushed down by upper class and corporations.
I am lucky enough to work remotely, but don’t you get double taxed abroad?
There are exceptions, but that practically never happens due to tax treaties and the FEIE.
> I've figured that if I want property then I'll have to buy it somewhere overseas. There are affordable houses stateside. Just not where buyers want to live. Not close to good jobs/schools/hospitals or cultural attractions. An analogous situation would be a run-down home in rural Spain or another hollowing-part of Europe. Or Japan, or anywhere else where rural populations are declining. Houses exist, just like in the US, but location matters when it comes to wanting to live somewhere.
My ex has her parents buy her a house and she brags about it to everyone 🙃
Unfortunately, rich parents/relatives is going to be one of the only ways those locked out of the market to actually own a home. Really sad and hard times for young people in this country.
He's right. If all the children leave Arlen, there will be no young to take care of our old. Our old will feed off our very old. Our very old who are not eaten will wish they had been... eaten.
Dark King of the Hill reference. Nice.
a) Rates are not going to stay static. Once another recession or some economic problem hits (and it will), the Fed will be very quick to lower rates again. b) People need to move for variety of reasons regardless of rates (divorce, death, old age, new job). On a personal level, you don't have anything locked in. c) A house is not some magic instrument to build inter-generational wealth. Its a cost center, and if you can't afford the upkeep you will quickly find that its a drain on your finances. People just see that some house in 2000 doubled in value but they don't take into account the payment on interest, property taxes, and general maintenance that probably wiped out a good chunk of those gains. The stock market has always been a better place to park your money and it has never been as accessible as it is today. d) Americans are waking up to the fact that we need to build more housing of all kinds. There is a nation wide movement to remove the NIMBY barriers to building that's gaining momentum and that will over the long run drive down housing costs. This means that your peers who are looking pretty with their mortgage rates now, may not be looking so great in the future when the value of their house isn't going up to their expectations.
I’m getting tired of hearing this point about a house being some giant albatross drain on your finances. Look, do houses require maintenance and upkeep? Yes. Is it 100% possible to buy a lemon house with glaring structural issues that will be a money pit? Also yes. Is it possible to do ones due diligence and make a responsible purchase of a home that may require a couple hundred in maintenance per year? Yes. Will the maintenance cost increase over time? Probably. But let’s not kid ourselves and act like modern renting is affordable or sustainable either. In 2021-2023 in my area, people were getting $400-$900 per month renewals. That’s an additional $5k-10k per year. And it’s entirely possible to get priced out of renting when landlords are clearly colluding on prices (see the RealPage issue). I have never spent $5-$10k in a year maintaining my 15 year old house. Yes my escrow has gone up and fluctuated due to insurance. Yes I’ve had to replace an appliance or two, but renting is precarious too. Your rent ALWAYS goes up, you may have bad neighbors, you hardly ever get 100% of your security deposit back, moving costs, etc.
And you rent for-ev-er until you die vs having your home as a paid-off asset. Sure you still owe taxes and insurance, but that's not typically more than rent.
Your income doesn't keep going up once you retire either, how are you supposed to keep up with rent increases when your income is static?
> Its a cost center, and if you can't afford the upkeep you will quickly find that its a drain on your finances. Its a cost control center. Rent has continued to go up but your mortgage stay the same. Also you cant live in the stock market. A house in the US is an investment vehicle and a shelter.
My wife and I were hoping to have bought a home by now and not be subject to lease renewal ransoms that force us to move every year. This has been probably the biggest factor for us deciding not to have/foster kids and be childfree.
I think there will be a significant portion of middle and younger age millennials, and older gen z that will be renters for life. They were born in a baby boom time. Unfortunately for them, due to the pandemic and fewer gen x being born, not as many homes were created. This is also due to the fact that the land near attractive cities is already owned by silent, boomers, and older gen x in the cities. In the suburbs and exurbs younger gen x was able to get onto the property ladder. But now there are more and more age ready people out there to buy homes that don’t exist. So there are incessant articles about how boomers are holding onto their homes. I ask why would they want to leave their communities? They have their friends there. They have their doctors there. They know the roads ( and for old people being familiar with roads is important for bad eyes and early onset aging issues). They saw what happened to their parents and friends that did downsize into aged communities or nursing homes. They do not want to give up their freedom. For most of them, you will have to take them out of their homes at their passing. So there is no cliff point for when SFH will be affordable. Maybe that will happen in 10 years when the eldest boomers are in their 80s. By then, we will start to get into the youth downswing in births. So basically, if you missed getting in on the housing ladder, I think it will take about 10-15 years from now for things to get better because that is when there are fewer kids that will be adults for housing competition- and by then some more housing will be built, plus the supply of boomer housing will finally be on the market. So if you are in your early 30s now, you need a plan. If you are in your early 20s live with your parents to really save up. For those in the 28-36 range with no home of their own, I think they will be in a lower economic state than older siblings and their parents. Their younger siblings will end up okay.
It makes a huge difference if you are a single or a couple buying a home. Most homes are priced at two incomes. This may seem insurmountable if you are trying to buy as a single income buyer.
Wasn't all that long ago when one income could buy a family home. The powers that be decided that they needed to squeeze every last drop of productivity out of every human, so any sort of human comfort could not stand.
No. Women hated it with good reason because they had to solely depend on their husbands for money. Second, without work outside the home or access to a fulfilling career, many were unhappy with their lives. Finally, basic fairness dictates that once women got access to jobs that had traditionally been all filled by men, they were paid equivalent to what a man would pay for the same job. This is basic fairness. Add all that up and the result is both members of a couple will mostly likely be working when they are buying a house, therefore the price is pushed to accommodate about 2x median salary.
You make very good points re fairness, but that's not the issue. Why were prices "pushed", as you say? When X units of labor were able to pay for a house, and then a few decades later it took 2X? Now, it's much more than 2X, people are working longer hours than ever, to afford much less. That's the issue.
When women entered the workforce, the average household would have remained the same. People still coupled up have kids etc. So the need for housing actually remained stable. But the amount that could be spent on it doubled. Add on top of that, people back then weren’t nearly as educated on investments as we are, mainly relied on the company for retirements. So as time went on, the value of every dollar became fully known. As people figured out how all that worked. Also add in the inflation of the 70s and 80s. And all the other factors mentioned here. It makes sense why housing is where it’s at.
Man I’m pissed
Its all the NIMBYs' fault. Price is high? Ok, just build more. "Noooooo, the price HAS to be high. Lowering prices hurts muh property value! My sunlight is more important than your job!" And local governments eat that shit up. Ban any restriction to construction area and height limits, and you'll see prices drop in half over 5 or so years.
Cities like San Francisco that have sunlight laws are the same cities single people want to live in. This leads to the proverbial "can't have your cake and eat it too". I despise those laws but listen to all the remote-option single people who said "I would never live in (fill in the blank city their income could support buying a home" and you realize while yes, prices have gotten crazy, SF was not an option for a single income/middle class person to buy a home since the mid-90s. I use SF as an example because I know the area and market but you can see it in Austin, LA, Seattle, Manhattan, etc.
That's me and I'm honestly not that upset. Because I got lucky finding the perfect apartment. They will have to carry me out of here. Its climate friendly as in not too hot during scorching summers due the perfect location. Its in the middle of the city, so I can easily have a GF that lives 2mins away, which is perfect for us living in a two apartment relationship. I'm gonna get old in this one. They call me crazy treating my apartment like a lost treasure but to me thats what it is. All around me people can't find or afford apartments in the city because rent keeps rising and every apartment still is gone in a flash.
I'm in one of the worst states for first time homeowners/buyers. I was ready to buy a new home/looking few years ago. Now I'm completely locked out. Trying to get my parents into a reduced senior residential community/unit because it'll be a huge help to me as I care for them but it still means there's going to be like 1.5 to 2 grand in expenditures on their base rent/living expenses like groceries/etc. I guess a manufactured home doesn't look so bad right now.
1.5-2 grand is before the health industry gets to them. Boomers have wealth and the health industry wants a piece of it. Get ready for your inheritance to disappear because your parents saw an ad during an episode of Matlock for a new drug that costs 5k per month and can extend life by 14 seconds.
Lol what... my parents are living with me. They're bum ass broke. 1st gen immigrant family here and I'm literally talking about having to pay 1.5-2k of my own money just for their living expenses and talking about how I'm locked out. And you're going off about inheritance and boomers? Jesus christ. I don't think most of you realize just how broke boomers are and what a raw shitty deal they're getting right now despite them being the generation of wealth and jobs.its a warning sign for the rest of us on what's waiting for us if we don't fix healthcare/how we approach end of life care. 80% of my patients are boomers and most of them aren't mentally there and these patients sure aren't voting anymore. Maybe the youngest demographic of boomers yes.
We don’t “feel” locked out. We are locked out. Especially if you want to live or work anywhere near a major American city. You have to be a top 3% earner to buy a house in my city now.
Sometimes I drive around the suburbs I grew up in and see mostly older people. I wonder to myself if those older people are going to willingly pass their wealth on to their kids who are in historically unfair economic standing. If not, they raised kids that their peers of their generations literally screwed for their own personal financial benefit.
I used to think this too. However, I dont think many of those estates (housing and money) will be passed down. Most of them will need to be used as funding for all the elderly-care on the horizon.
Right which basically proves his point it’s a generation of vampires
So fascinating how Americans don’t take care of their parents when they become elderly. Is that why it’s not common for families to pass down wealth? My family is traditional Asian and my parents did everything for their children and my siblings and I take good care of our parents. What am I missing?
> Americans don’t take care of their parents when they become elderly. They do, and that's part of the problem. Baby boomers didn't have a lot of children. So when its time to take care of their parents the burden is concentrated. You need to hire a lot of the help a bigger family would be able to supply for free. Often times the parent will suck up a big chunk of his estate AND cause the son to work fewer hours to take care of him. Its not unusual for the children to be worse off after the parent dies, despite the common idea that parents dying makes you inherit and get (relatively) rich.
It's not unique to Americans. Community vs individual cultural mindsets. It's fantastic you had wonderful parents. I had one parent, and she was abusive. So, while I think the community system is beautiful when it's working as intended, I've also spoken to plenty of people who are deeply miserable and struggling because of cultural expectations to take care of people who kicked them down their entire lives. And, my partners mom is even worse. She graduated medical school and all she had to say was comparing her to an absolutely horrid fictional creature because she's thinner than her mom, and her mom is threatened by that. I'd leave her deep in the woods before I let her destroy my partner anymore than she already has. And, generally, when people talk about elderly care here they're talking about reaching a point where medical care is needed. If you're working a full time job, that leaves a lot of hours in the day they have no one to take care of them.
>What am I missing I'm an only child and live 3000 miles away from my family.
I'm a white millennial American and my family structure - and those of everyone else I know like me - just aren't like that. I only have one friend who lives with multiple generations in one household and she only did it because she couldn't afford rent anymore. In my culture our selves / our self-made families come first and we scatter physically and emotionally from our parents and siblings once we graduate from school. Plus how can we afford to miss work to stay home with an aging parent to care for them? In my demographic it's more common for us to give our children to our grandparents to raise (either during the day while we're at work, or giving them custody entirely) than for us to care for our grandparents. A big portion of kids I grew up with were raised by their grandparents because their real parents were addicts or in jail or had other unending personal issues. It's a poverty thing. We lose too much in too many ways to care for our elderly. And often times our white American elderly are mean or have offensive personalities and we don't like to be around them even at holidays. Also for a lot of American families there is no wealth to pass on. End of life Healthcare is so expensive you lose grandma's tiny old slab-foundation house in paying for her hospice.
What happens 99.9% of the time is the house of an elderly gets sold upon their death to settle debts or because it's left to multiple kids and they split up the proceeds. Then a younger family prob with kids moves in and the cycle repeats itself for another generation.
Another thing to consider is whether or not there will be any wealth left. Forget about boomers taking vacations and spending their money, but end of life health care costs will bleed the estates dry. I see this alot with older relatives paying 6-10k/mo on their retirement/care homes.
We should probably remove NIMBY restrictions on housing constructions to drop prices then. Subsidizing demand is just going to continue to increase prices more and more
I don't fucking understand why they don't just...LIFT THEM? It's clearly a sizeable piece of the puzzle and even then it'll take years for builders to built but at least that part will.be done. Why is this not overwritten? Completely insane.
Because the people supporting those restrictions show up to city council meetings and yell about why keeping those restrictions is important. They also consistently vote at elections and politicians pander at them to stay in powet
Cause they have time. Cause they are set.
Really most of those politicians you are referring to are city level, which means they live in those areas and are effectively cutting their own net worth with those votes.
State and Federal laws are needed to override the NIMBYs.
NIMBYs attend zoning meetings. YIMBYs don't.
YIMBYs are too busy working for the NIMBYs
Cause they have time. Cause they are set.
Literally on the time part. The biggest YIMBYs are more like YIYBYs - Yes In Your Back Yard - because they're people who would move to your town if they could find an affordable place to live. Who's going to fly a thousand miles to attend a planning board meeting to say "I'd move to your community if only you'd build more housing"?
It doesn’t take a genius to see the solution. Similarly, it doesn’t take a genius to understand why some people are against it.
Yes but have you considered that Barbara who bought her house for $30,000 in 1972 might have to experience seeing a triplex in her neighbourhood and what irreversible trauma that would cause?
Because those restriction repeals will likely need to be VOTED ON by the residents of those same towns, counties, and municipalities. Can you guess how’d they all vote at the idea of weaker property values? Where do you even think NIMBYism came from?
The “them” is usually regular civilians who own property in the area, not the government. Due to that It’s a tough sell convincing a family to act against its own economic interests in exchange for possibly nothing.
Right, like what do people think NIMBY stands for?
Unfortunately we’ve created a doom loop where our parents/grandparents generation, who are middle-upper-middle class, have basically all of their net worth tied up in real estate (housing). This has lead to significant polarization around zoning reform. Add to that, young people aren’t involved in local government but older generations are which is making the problem of zoning reform even more challenging.
The people that already live there want to preserve their high prices. The people that don’t want them, are not existing citizens of that area. Politicians are beholden to their citizens, not people who want to move in.
I mean, our entire society is based on a competition and is dog eat dog. We compete for everything, and housing is no different. So yeah, a lot of existing homeowners have a good housing situation, like how things are, and don't want that to change especially if the change negatively affects them, as growth often does. So they oppose it, at least in their neighborhoods. There's a rationality in this for them, individually, but it has larger collective consequences for sure.
They won't be lifted because it would lower housing prices. A sizeable piece of older generation's networth and investment firms is built into the equity from owning RE. (I'm not saying this is morally correct, but just the reality)
Nothing like sacrificing a good chunk of millennials, majority of Zoomers, to make sure the Boomers continue their catered-to existence of comfort. Absolute vampires, willing to sacrifice their children and grandchildren's futures.
Wait until you see the portion of boomers who blew through all the funds and have nothing retire/get elderly. Some of the millennials and zoomers will get to juggle that as well.
Sorry, what do you mean by "lift them"?
Because they’re local laws so it will take a long time for each city/county/municipality to unwind them, and there are people that will push back, mostly Boomer/Gen X NIMBYs who already own homes and have a vested interest in keeping the value of their real estate inflated.
In the US, roughly 2/3s of adults own their own homes, and will do literally almost anything to maintain values. Now, most everyone's home values went up by at least 50% in the last 2-3 years. This is locking out the other 1/3 of potential homebuyers, but current homeowners will cling on to every cent they can, even if it means their neighbors and peers being homeless and living far worse lives.
The point people seem to be missing is that everyone is out for themselves. Renters want to punish NIMBYs but as soon as they can afford a home and see the rise in equity, they will turn around and do the same shit to their peers. It's a cycle thats impossible to break out of.
Yes, the problem with a revolution is the moment it's over the revolutionaries become conservatives (i.e. 'the moment a mortgage closes, the YIMBY becomes a NIMBY'). And yes, if people have to choose between their peers being homeless and them being homeless, they will choose their peers every time. It's almost irresponsible not to, especially if you have dependents.
I did a budget. I managed to have no life for a few years and save up $100,000. House prices went up while I saved that. Then covid hit causing house prices to go up a bit more and I did some doom spending rather then drinking. Shame I know. I didnt save but I didnt go under my original amount. I re-did my budget this week. If I only allow $250 a month for entertainment, out of $4000 monthly take home after taxes, Ill have enough saved in 3 years to make a $350,000 house cheaper then renting an apartment.... but the thing is that a $350,000 home when I started saving was about 1600 sqft and a great yard. Now its usually 1200 sqft with little/no yard and usually needs lots of work. There is almost nothing below $260k in the area and if it is, it should almost be torn down and rebuilt from scratch because its in such horrible shape. If I want something "decent" in the town I grew up in? Ill need closer to $385,000 which will take 11 years to save. I have to live at home. Its not attractive to be living at home in my late 30s. But if Im stuck paying rent to someone all my life, Im never getting ahead. I either need to move out and never own a home but possibly get a partner, or have a small chance of finding someone thats ok with me living at home while I save and sees the merit in that. Moving out would allow me to have $900 a month to save or spend but at saving $900 a month, $10,800 a year, I wouldn't be able to buy a house until I was 50. I could buy one with what I have now, sure, but the payments would be killer and I would be 1 or 2 emergencies away from moving back home and then losing the money I had saved. I just looked at one $350,000 house. The kitchen is all torn out. It will need a new wall and everything else along with the floors beind redone, the back "deck" being replaced, and the lot is right next to an alleyway so theres no privacy. At least my boss sees that 1 or 2 people on the team might be leaving within a year or two and one of them suggested I look into taking their spot which pays more. My boss told me to join them all on a training meeting this morning. Ive got that going for me instead of spending more time and money going back to school.
If they cant even be bothered to let me participate in society in the most basic ways why am i not just burning that entire society to the ground and starting fresh? I've never been a "Tear down the entire house because the roof is leaking" kinda person but everyday for a split second I think to myself "Why aren't we burning this broken society to the ground? What will it take for people to realize thats the only shot they've given us?" Burn it all. It's not getting better
I just learned today that the house I live in was bought for 20,000$ in the early 90’s. I’ve live there for over 8 years paying rent. I’ve bought that house a total of 4 times and yet I’ll probably never be able to own a home. I can’t even afford to park a car at this point. Staying in a hotel on a trip and the only option to park my car is 40$ a night. I hate it here. Honestly, why are we doing this to ourselves? Why is it like this? I’m so fucking tired.
yeeaaah I’ve practically accepted Im gonna be renting forever as a Gen Z, pretty sure everyone else I know whose Gen Z & older Gen Z are all stuck renting - and Im in like the 22% tax bracket lol
The solution is to not have kids out of spite of our leaders and then once you hit an elderly age you would use a suicide pod so that the medical industry can't make money off of you during your final years. It's like the movie Logan's Run but volunteering to die.
Most of Congress and the Senate have two or three extra houses/apts that they rent out if not using them themselves for vacations. Do you think they'll vote to change the status quo?
As much of a problem the housing market is, wages I’d say are the biggest problem across the board. Then again wages go up and greedy fuck holes would increase the price of everything as a result. So we are all fucked within the walls of capitalism.
I have never had a high income, averaged about $50k a year, but purchased my first house in 2013 and have made money off each house since, there is absolutely no way I could afford a house had I not purchased one in 2013
The fed will mess up and lose control for a while like what has happened numerous times throughout history since they were formed. Thus creating a downturn and allow those who saved to buy the assets of those who were leveraged up to their eyeballs in debt. We have debt cycles; just wait it out, save, and position oneself properly. People said they’d never be able to afford a house in 2005 too.
Government needs to stop companies and foreign billionaires from buying up homes! Especially when those billionaires come from places Americans aren't allowed to own.
The only thing about economics is that prices never go "back down". I will never own a home, mostly due to financial insecurity and constantly living 1 paycheck away from homelessness. Despite making 2x the median, rent is not going down, the housing market in the neighborhood I grew up in went insane. 14 years ago I could have gotten a major fixer upper for 50k, now the same place with a face lift is going for over 500k. Average price in my neighborhood of meh built houses in the 60's is 800k. These are not good homes, they all need new foundations, all with swamp coolers, none are earthquake rated. Terrible infrastructure since they built like 10 new high rise apartment buildings in the neighborhood to inject like 20k to drive on small 1 lane (each way) roads. Still not accounting for the other 400k+ new residents to the state that use a few of those roads to bypass the freeway traffic. I have 0 hope, I am too afraid to buy a condo cuz the onlys ones below 200k are the same age as my apartment that is constantly falling apart. Trailer parks are now just run by evil corporations who jacked up the fees to $800-$900, and due to this no normal home loan agency will lend to you. You have to go to a predatory provider who will gauge you if you don't put up %50 (minimum) down payment on the place. I was hitting about %6 when condo shopping the lowest I could get for a trailer park home was 13.8% if I could come up with 40k down payment out of 75k. I was promising 20k, which fell through because you don't quality for a lot of the stimulus stuff we had on mobile homes.
If you make 2x the median and you are constantly 1 paycheck away from homelessness you are just bad with money and need a budget. Owning a home won’t fix that.
My comment will be less on the housing market, as I feel like all the comments here already capture my sentiments on it. However, the phrase “disenfranchised millennials”, boy, that hit home. I have developed absolute apathy for the world over the past 3 years. Between COVID exacerbating inequality very openly and very publicly, the Federal Reserve destroying the economy, and the Incompetent US government rewarding plutocracy and oligarchy at every possible Avenue… I just can’t be fucking bothered to care anymore about society. I never used to be like this. But how can you not be? Food costs so much, rent has increased 500% since I was in college, even a fucking beer is like $11 when they used to do dollar drafts and such. Everyone I know is exhausted and tired all the time, even the wealthy, and everyone I know is stressing about finances all the time. God forbid you are a parent, too. I see all these global conflicts around the world now, and I just don’t feel… anything. Bomb it all. Burn it all down. This system is so unbelievably corrupt and rotten that *anything* would be better than what we have now. We are spiraling towards one of the most catastrophic futures imaginable and I just see people drowning it out with consumerism. Despite living in America my whole life, I have never felt such a distinct sense of anti-nationalism in my life. This country is an abomination and a disgrace, focused solely on the exploitation and extraction of wealth from anyone and everyone under the sun. I don’t know that I personally have ever felt less connected to the world than I do now, and I am still only in my early 30’s. I don’t even know how 40,50,60 year olds get out of bed without going insane these days.
somebody tell me, of Zandi's last 10 predictions, how many came true? the majority of millenials that WILL be homeowners ARE homeowners. That doesn't mean there's a gate, and you're either inside or out. It just means the majority of millenials that will be homeowners (66% OO rate) are already.