Boomers won't let go of their homes

"A market ripe for the taking"???

You seem to forget or not know that interest rates were much higher in the 70s/80s when many boomers bought which greatly impacted affordability. My first 2 mortgages were 12 and 13 %, respectively.

Of course, I recall being envious of the prior generation who bought $30K houses with low interest loans and also had pensions to rely on. And so it goes.

 

Boomers had different problems. They had problems with inflation and interest rates (so do Millennials and Gen Z, but not nearly as bad, at least not yet). But they had other advantages, including not having an aging population in far greater numbers behind them refusing to retire and hoarding the housing.

And again, I’m not blaming Boomers. Why? Because if I was a Boomer, I’d be doing the exact same thing. But let’s not pretend there’s no loser born into this.

 

4.5% annual growth rate for your house over 54 years.

 

Young people who are not willing to be mobile are limiting their options. There is far more access to opportunity both domestic and foreign for folks who are willing to be flexible on where they live and when they are looking to start a family (if they so desire). In the end, educated sacrifice is still a path to financial success (and what that means to individuals will vary). There are some things that create a more difficult environment for young people, but you have to recognize what opportunities you have that the prior generations did not have just the same. So many times we construct our own walls; just have to be willing to see them and make adjustments.

Go GATORS!
,WESGATORS

 

Even within generations there are winners and losers. It's an arbitrary 15 yr year span with a lot of changing positives/negatives to deal with impacting your future.

Housing affordability is now a problem but it really wasn't 10 years ago. Unemployment is at record lows, won't always be that way. It's much easier to search for jobs than it used to be.
Graduating in the middle of a recession or at a time with rampant inflation puts you at a career disadvantage vs those who graduate in a booming economy, etc etc.

I just think the whole "blame the prior generation", while it is understandable it is nonsensical in my book.

 

FWIW I'm not trying to do that.

 

Hmmm..this study seems to refute some common beliefs

Gen Z is finding it easier to buy a home compared to past generations

The homeownership rate for Gen Zers between the ages of 19 and 25 is higher than those for millennials and Gen Xers when they were the same age, according to a recent Redfin report.
In 2023, when the housing market saw a nationwide correction followed by a rebounding of prices across the country, 26.3 percent of adult Gen Zers owned a home, a slight uptick from 26.2 percent the year before, the report said. The homeownership rates among millennials and Gen Xers in 2023 were 54.8 percent and 72 percent, respectively—up from 52 percent and 70.5 percent in 2022.

 

Interesting. Outside the housing bubble era we are at a homeownership high. Way higher than the 60's, 70's, 80's, 90's, and 2010's. Only the bubbled 2000's is higher.

Homeownership Statistics (2024)

 

This isn’t the first time you posted home ownership rates as proof of “something”, but I’m not really sure what point you are trying to make. Historically low interest rates fueled a house buying frenzy. We all know this. It doesn’t necessarily indicate that prices will go up, down, or stay the same. It doesn’t mean the housing market is good or bad. It really doesn’t mean anything.

 

Just putting the current market in perspective. Doesnt look historically unaffordable with ownership rates above era's outside the housing bubble. Certainly ownership rates are higher than any year prior to 1997 and every year after 2010 which were characterized more by lax lending practices not low rates.

 

There is no correlation between those statistics. Housing is unaffordable to purchase now. It wasn’t unaffordable at the time of the low rates and moderate prices. Therefore, you are comparing the effects of a previous period to the reality of the current period. It’s a mismatched comparison.

Inventory is building up due to less demand. I don’t know what effect it will have on prices long term because asking prices are still elevated well above pre-pandemic prices. It would take a significant reduction to get things back into normalcy, but I’m not confident it will happen. I’d have expected a bigger correction already, but this housing market is surprisingly resilient and largely doesn’t make sense. Very difficult to logically assess it when it is illogical.

 

That's fair on it being a lagging indicator. No doubt housing shortage is driving prices up. Wont be a correction until there is supply though.

 

Supply is rising, but in many places it was so low that it’s like filling a leaky bucket with a trickle of water. Even in the places where inventory is rising quickly or even at pre-pandemic levels, pricing is resilient. There will be no correction unless there is a forced selling event.

 

I also still don’t believe there is a housing shortage. That’s largely a myth. As I said many times, supply and demand is a two-sided equation. Supply is down, but so is demand. The fact that inventory is rising across the USA indicates that supply is greater than demand at the moment. We have more inventory than demand, so there isn’t a shortage. There is a shortage of affordable homes, but there is more overpriced inventory than demand. And no… you can’t say well if the prices or rates go down then the demand will be there. You have to judge supply and demand simultaneously, in the same time period. You cannot compare current supply to future demand or vice versa.

 

Curious, what to list reasons why you feel this way?

 

Not how it works but weve been around on this before. In your own world if there is one diaper on a shelf somewhere in the country there was no diaper shortage during covid. The fact that you see for sale signs in your neighborhood doesnt mean there is enough housing to keep prices at historical levels. That is the definition of a shortage. There will always be a house no one wants at a price on a given day but aggregately if prices are shooting up and the number of homes selling isnt... that is a shortage. Asking prices arent tracked. Only selling prices.

 

With the 30 year mortgage rates at 7.37%... makes it an interesting dilemma.

 

I think housing prices are area specific. I chose an area where homes sell fast and are in demand. The time on market has increased but the square footage prices have been rising in the last year. I can drive 10 - 15 minutes and find homes a whole lot cheaper. They are mostly smaller, older, and in neighborhoods with less access to shopping and no deed restrictions or association fees. That’s when you start seeing unkept lawns, cars parked in the front yard, and dogs running free. People like myself prefer a neighborhood with strict rules that are enforced, gated, nice amenities like lawn maintenance, pool, clubhouse, etc. You also pay a higher cdd fee per year. Mine is just under 2K which is on the high end.

Cheap or cheaper homes are out there.