Reply to The Next Baby Boomer "Me me me" move? A decade of escalating interest rates

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[quote=Anonymous]It's really interesting to see how policy makers have reacted to the Financial Crisis. They've done NOTHING to reform the housing sector or the housing finance system. It's still a mess of poor incentives, securitizations that mask risk, and people borrowing more than they can afford.

Essentially, they've re-inflated the bubble so Boomers in major metro areas could recover equity and sell their single family homes at top dollar to young families, funding their retirement.

What's next? How about 10-15 years of increasing interest rates. Boomers are going to take that cash and now demand risk-free return to fund their retirements. You'll see AARP campaigns (funded by the financial sector) to ratchet up rates, thus ensuring that borrowing is expensive for the next generation of students. This will also plateau housing prices. The equity gains of the last 3 years will take 20 years for Millennial home owners to accrue the same.

Additionally, my guess is that once Boomers sell the big house and retire, the USG will dismantle Fannie/Freddie or institute huge reforms. This will dramatically raise the cost of getting mortgage and lower the amount creditworthy young people will be able to afford.

Thank ya'll,
Generation Fucked.

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