Anonymous wrote: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 wrote:

Anonymous wrote: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.

Boomers paid 12 and 13% mortgage interest rates for years.

Anonymous wrote: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.

But turbulent times may be ahead for millennials. Experts say that the window of improved affordability may have already closed.

“They bought houses and they are active in the market,” said Lautz of the NAR, “just not at the rate that we should be seeing for this age category.” Housing affordability has declined steadily in 2023, according to the NAR, as has inventory, from 1.9m homes in June 2019 to 1m today. And this year, boomers are once again the largest group of homebuyers, often competing with millennials looking to buy their first home.

Anonymous wrote: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/

In fact, home prices alone have increased 1,608% since early 1970, while inflation has increased just 644% in comparison. In other words, Americans have seen a steep decline in their purchasing power across the last five decades, especially when it comes to homeownership.

In 2021 alone, home prices rose 20%, while inflation grew at a 7.5% pace.

If home prices grew at the same rate as inflation since 1970, the median home price today would be just $177,788.

Instead, home prices have increased far faster than inflation, soaring to $408,100.

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:

Furthermore, younger potential homeowners have spent much of their adult lives in periods of economic uncertainty while the average worker’s earnings steadily lost value with inflation and reduced benefits. These financial struggles and more significant student loan debt may deter potential homeowners from buying. Even if they are eligible for a home loan, taking on more outstanding debt can be intimidating.

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 wrote: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/

In fact, home prices alone have increased 1,608% since early 1970, while inflation has increased just 644% in comparison. In other words, Americans have seen a steep decline in their purchasing power across the last five decades, especially when it comes to homeownership.

In 2021 alone, home prices rose 20%, while inflation grew at a 7.5% pace.

If home prices grew at the same rate as inflation since 1970, the median home price today would be just $177,788.

Instead, home prices have increased far faster than inflation, soaring to $408,100.

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:

Furthermore, younger potential homeowners have spent much of their adult lives in periods of economic uncertainty while the average worker’s earnings steadily lost value with inflation and reduced benefits. These financial struggles and more significant student loan debt may deter potential homeowners from buying. Even if they are eligible for a home loan, taking on more outstanding debt can be intimidating.

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.

In fact, home prices alone have increased 1,608% since early 1970, while inflation has increased just 644% in comparison. In other words, Americans have seen a steep decline in their purchasing power across the last five decades, especially when it comes to homeownership.

In 2021 alone, home prices rose 20%, while inflation grew at a 7.5% pace.

If home prices grew at the same rate as inflation since 1970, the median home price today would be just $177,788.

Instead, home prices have increased far faster than inflation, soaring to $408,100.

Furthermore, younger potential homeowners have spent much of their adult lives in periods of economic uncertainty while the average worker’s earnings steadily lost value with inflation and reduced benefits. These financial struggles and more significant student loan debt may deter potential homeowners from buying. Even if they are eligible for a home loan, taking on more outstanding debt can be intimidating.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My greatest generation parents did better than their parents. My boomer siblings have done better than our parents. And my millennial children are on a path where they could do better than their boomer parents. I believe the differentiators are better education opportunities and dual income households. Hard work has always been part of success for all the generations.

I agree. Pick a more lucrative career. The days of majoring in whatever you want and getting a good paying job is over.

The bolder alone is worth much more than anything else others have complained about.

Well, yeah but that is because college degrees were used as proxy for class, not as an education that would actually help you to do a job. Not the case anymore. College is much closer to trade school now.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Transferred from where to where?

Weren't mortgage rates 2% like 2 years ago?

Yes. How soon people forget.

Exactly! What a joke. When I bought my first home as a boomer in the late 80s the interest rate was over 10%. You have no idea what the hell you’re talking about.

Yeah and your house was like 50k…

Anonymous wrote:The problem for millennials is that they are clueless about what their boomer parents went through when they were in their 20s and 30s. Drafted to flight in Vietnam, incredible inflation and interest rates in the mid 70s to mid 80s and then a stock market crash in 1987 that wiped out 25-40% of their net worth. At the same time boomers can never fully appreciate what it was like for their parents and grandparents having to deal with the Great Depression and WW2. But as boomers got older they gained a better appreciation of what their parents experienced because age does have its benefits in terms of reflection.

Anonymous wrote:I feel like these threads always get started by someone who just hates their parents and is mad they aren’t paying for his/her vacations or kids tuition or downpayment or something.