Boomers' Billion-Dollar Bonanza: The Unseen Hoarding Behind Millennial Struggles
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Anonymous
+1 especially the OP complaining "they never help with the kids and now they want to see the kids!" Just ageism and personal grudges. |
Anonymous
+1 well said |
Anonymous
And the average salary was much lower than today's as well |
Anonymous
NP. People see through the lens that benefits them. Whatever the case, when I went to college my dad would only pay if I went to the least expensive state school and major in business. |
Anonymous
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I don't know why we try to have a discussion about structural issues on a board like this.
For those of you saying "the government didn't help me with my housing" I refer you back to the interest tax deduction, which is *literally* the government incentivizing and supporting home ownership. So two people - one owns a home and one rents, same income, same monthly outlay for mortgage or rent, one has an appreciating asset, flat (and in real terms, shrinking) monthly payment, and less taxes than the other. That homeowner also had the timing and luck to have been able to find a home they could afford, and the privilege of qualifying credit and down payments (which at times the government has also subsidized). The renter is faced with increasing rents and not building longer term wealth. Which then increases wealth inequality. In the last 50 years, housing costs have far outpaced inflation (as have college costs). https://anytimeestimate.com/research/housing-prices-vs-inflation/
https://ipropertymanagement.com/research/homeownership-rate-by-age Home ownership rates have been declining by age as this has gone up. The average age has increased by 10 years to 57. Homeownership rates among those 30-34 have consistently declined, from 9.2% in 1993 to 5.9% in 2019. Among 34-44, similarly rates dropped from 23.2% in 1993 to 15.7% in 2019. Whereas there has been some noise up and down in the older brackets, in 2019 all 55+ were at the highest they had been in this data. Another fun insight:
It isn't a personal slight against boomers to say that *as a whole* the generation has had structural and timing advantages that mean they were better off than gen x and millennials at the same age, and that that advantage will continue to compound. |
Anonymous
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I say to Millennials, move on. It maybe true or not true that some Boomers got the bonanza.
Just do you! Make your own money and hope that you don't get vilified by your children & the grand kids. |
Anonymous
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What are you talking about? Most millennials purchased first homes already. I'm 37 and am in the middle range for a millennial. I purchased my first home 10 years ago and my forever home about 4 years ago. The youngest millennials are nearing 30. Interest rates only rose 2 years ago. Gen Z could complain about interest rates though. It's hard to get a first house now.
Sure Boomers are sitting on a ton of cash, but so are their parents. Greatest generation and silent generation are still alive. Boomers are inheriting even more cash like crazy. They spend it as quick as they get it though on fancy cars, 10k+ cruises, 2nd homes, on and on. |
Anonymous
Sorry but as a matter of tax policy, I want home ownership to be incentivized. Just like I think marriage should be incentivized. I remember the 5k hit to my taxes that I got just by getting married (which I think has been fixed now). I didn't make much money then, so 5k was a lot. |
Anonymous
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Weren't Millennials born to and raised by Boomers? Are they not in line then to inherit all the accumulated wealth, or even receive help and support now from boomer parents?
-signed a Gen X who is totally fine with how things have played out in the last 25 years, and happily raising Gen Z, who is also fine. |
Anonymous
+1, thank you for taking the time to lay this out. It's not a personal vendetta. The truth is that it is harder for millennials to build wealth than it was for their boomer parents, and this is not due to millennials being worse with money or any personal quality really. It's due to structural constraints that enabled boomers to build wealth via home ownership (and to a lesser extend, investment in the stock market for those who had enough cash to invest), but have made it significantly harder for millennials to do the same. Millenials are also more likely to have had (or for younger millennial, still have) education debt, which may have postponed not only home purchases but also parenthood. This can lead to a squeeze in your 30s where you are paying school loans, childcare costs, and potentially also dealing with elder care issues depending on how well your parents managed their money, and to then face skyrocketing housing costs on top of that might make home ownership feel like an impossible pipe dream. In comparison, boomers graduated from college mostly debt free (or were able to get decent paying jobs without college, which used to be possible), which enabled them to both have kids earlier and buy homes earlier because they were not paying down education debt. If you buy a home at 25, it will be paid off by 55, which opens up many doors financially. It's a very different proposal for millennials buying homes at 35 or even 40. |
Anonymous
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My boomer parents, aunts, and uncles all lived at home until they got married, through college and often graduate school. So by the time they got married in their late 20s they had savings. My parents couldn't afford a house right away but they bought a co op so theybbuilt some equity, then bought a house when I was in second grade.
Of course it's more difficult to save for a house if you're renting for a decade first, shopping at high end stores, buying all the latest electronics, eating out all the time, and traveling several times per year. The boomers seem to be doing these things after they retire instead of during their 20s and 30s. |
Anonymous
| I guess I am a member of the Boomer generation, although I hate that term. When we were starting out, we bought a tiny house in a close-in suburb, and financed it with a 30-year 12% mortgage. There are many similar houses in our neighborhood. When they come on the market they are snapped up, torn down, and replaced by mega-mansions with three-car garages, Great Rooms, etc. No young couple starting out can afford them, even at low interest rates. Not only is the house over-priced, but the taxes and utility costs are higher too. And the houses are so big that there is no back yard for kids to play in. This is not the fault of my generation. |
Anonymous
Yes, literally most millennials own homes (as of now). The economic changes from COVID including interest rates, loan pause, and financial help given to all generations helped overcome gaps. https://www.theguardian.com/us-news/2023/aug/17/millennial-home-ownership Though, those factors are no longer in place.
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Anonymous
On homes that cost less than 100k. And salaries increased over the course of their mortgages. In 1985, median salary was $24k, median home price was $84k, mortgage rates were about 12.5%. College debt was rare. Let's say you graduate from college at 22 and get a job making 18k. You live cheaply (rent is cheap) and work for 4 years, saving money. In 1985, at age 26, when you are now making 20k, you get married and buy a small starter home for 55k, putting down 10k (just shy of 20%). Your rate is 13% on a 30 yr loan because you're a first time buyer with okay credit. Monthly income: $1,666 before takes. Monthly mortgage cost: $500. Tight, sure. But that mortgage would still be $500/mo 20 years later when the boomer is making 3-4k per month. Or more. Millenials have not seen similar gains in salary. And they are more likely to postpone buying a house in order to pay off their college debt. Plus the higher cost of housing means much larger down payments, even just to put down 8-10%. So yes, Millenials have had much lower rates, but that does not mean it has been easier for them to purchase homes, or that their salaries have risen to help them afford mortgages at these lower rates. Low rates can help first time buyers but they are actually most useful for people who already own homes, who can refinance to the lower rate. Boomers and Gen X who already owned homes probably benefitted most from the low rates of the last 10-15 years, because they already owned homes purchased when housing costs were much lower, plus could refinance down to dirt cheap rates. |
Anonymous
I mean, it kind of is. Because who do you think is buying those starter homes and replacing them with giant mansions that will cost three times as much? Developers, who are mostly Gen X and Boomers. Also, Boomers have controlled our political structures for decades, and could have instituted policies that would have addressed skyrocketing housing costs. But they were not incentivized to do so because Boomers, who already owned homes, benefitted from rising home values. They had no interest in keeping housing costs down. Well now millennials are mad because they can't afford homes. Boomers could have made choices that would have made it easier for millennials to buy into the housing market, but chose not to in order to enrich themselves. |