Reply to Boomers' Billion-Dollar Bonanza: The Unseen Hoarding Behind Millennial Struggles

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]https://fortune.com/2023/10/28/great-wealth-transfer-baby-boomers-bank-of-america-millennials-government-policy/amp/

Wow, I just came across this shocking article from Fortune which reveals that the so-called "great wealth transfer" is not the $72 trillion we've been hearing about, but rather a whopping $129 trillion. And guess where most of it went? Yup, straight into the pockets of baby boomers, thanks to government policies over the last 40 years.

We've all heard about the economic challenges millennials face today, especially with the housing market and student debts. But to think that the government has been so instrumental in enriching an entire generation, predominantly boomers, is mind-blowing! This massive wealth transfer is arguably a result of policies from when boomers were in their prime working years. The research shows that two-thirds of the current U.S. household net worth (around $146 trillion) is held by boomers and "traditionalists."

What's even more shocking is that while millennials struggle with high-interest rates on mortgages, most boomers were able to lock in at a low 3% rate. We often hear about boomers giving financial advice to younger generations, but it's evident they had a huge leg up due to these policies.

It's time for a change. Millennials and Gen Z are battling a completely different economic landscape, one that has been significantly shaped by previous generations. While there's hope that a pending wealth transfer might offer some relief, current projections don't seem as promising as what boomers enjoyed.

Thoughts? How do we bridge this generational wealth gap? It's evident now more than ever that we need a system that supports all generations equitably.[/quote]

This is all BS. Completely confused with the wrong generation.  
I am full on Boomer. Mid 60s. 
  
Graduated in a huge recession. Waited in gas lines during gas rationing.
 No jobs.
Interest rates were upwards of 18%, started dropping to 8  much later on. We only saw 3% well after this last recession, around 2012, and 2015, brought to you by deregulation policies of Republicans.  Stock market was literally STAGNANT after dropping from crash. Our house mortgages were underwater. We had 2 incomes to just buy any house and support a family. Inflation only rose house prices recently and that is because of housing shortage. Building shortage.

Where is all this fiction you bring from? It's all made up. [/quote]

You graduated in a huge recession...just like the Millennials did. The difference is that in 1970 the average cost of one year of college at a public university was $394, ($3,125 in 2023 dollars) while today it's $26,027.

Interest rates were upwards of 18%...but houses were ridiculously cheap. In 1970 the average home price was $26,000 ($206,000 in 2023 dollars) which would be $392 a month at 18% ($3,109 in 2023 dollars.) Today the average house is $513,400, which at the current mortgage rate of 8.28% costs $3,868 a month, but that belies the true cost because DC has gotten far more expensive than the average. What does $513,000 get you in DC? A 1br condo, a tiny rowhouse in the ghetto, or a SFH with a 90 minute commute.

Let's look at a real life DC example, 4420 Fessenden St, in DCUM's darling neighborhood, AU Park:

https://www.redfin.com/DC/Washington/4420-Fessenden-St-NW-20016/home/9949272#property-history

In 1973 the house sold for $65,000 and the average mortgage rate for that year was 8.08%. In 1973 dollars that house would cost $481 a month, which would be $3,334 today. The house is currently for sale for $2.475 million, or $18,299 per month at 8%.

In 1973 that house would be easily affordable (30% of gross income) to a family making around $18,000 a year. The median family income in 1973 was $12,050, meaning you'd have to earn about 50% more than the national median to afford a single family home in a safe part of DC with a good commute and good schools. To make that same house affordable today you'd have to earn around $750,000 a year. The national median income today is $74,580, so you'd have to earn 905% more than the national median, and 724% more than the median DC family income.

So when we compare what your dollar bought you back then to what it buys you now, let's look at what 50% more than the national median gets you in DC. 30% of $74,580 is $22,374 or $1,865 a month. At today's rates, $1,865 a month equals about $250,000 in buying power. So while boomers in 1973 earning 50% more than the median were buying houses in Upper NW, people today making the same proportional salary can afford a crackhouse in Capitol Heights (https://www.redfin.com/MD/Capitol-Heights/4710-Pard-Rd-20743/home/10606506) or a basement 1br in a decent neighborhood with $600 worth of condo fees. (https://www.redfin.com/DC/Washington/3001-Porter-St-NW-20008/unit-100/home/40136597)

Your college was dirt cheap, your houses were dirt cheap. The only made up fiction is coming from you.[/quote]

Good try, but this is probably too complex for some of these boomer PPs to understand, lol.  [/quote]

You can always tell the sarcastic millenial is chiming in when you get a random lol. Way to advance the debate, yet again! You'll still never buy a house.[/quote]

Go for the ad hominem rather than engage in the substance. Pretty lazy, bro. Lol[/quote]

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