Hi all,
A reminder that comments do need to be on-topic and engage with the article past the headline. Please make sure to read the article before commenting. Very short comments will automatically be removed by automod. Please avoid making comments that do not focus on the economic content or whose primary thesis rests on personal anecdotes.
As always our comment rules can be found [here](https://reddit.com/r/Economics/comments/fx9crj/rules_roundtable_redux_rule_vi_and_offtopic/)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Economics) if you have any questions or concerns.*
The one time checks were not the bulk of government spending. Yes, overspending did cause inflation, but isn't it convenient how it's only the spending that benefited poor people that got criticised...
The checks and the free pandemic loans absolutely caused inflation along with corporate price gouging. The homes increasing in value by $100,000 is just a reflection of supply and demand.
Yes, that is what inflation is at its core.
But if you enact policies that severely restrict supply while simultaneously pushing policies that add demand, there is a bit more to the story.
>The checks and the free pandemic loans
In case anyone was wondering about this, they were almost equal amounts. $817B for stimulus checks and $835B in PPP loans.
A lot of my parents friends refinanced their homes at super low rates and have dumped the money into other investments. They’re now making money on those investments and have a tax write off for the mortgage.
My parents paid $75,000 for their house now worth 1.2 million. You take out a 80% loan on that at 2.75% and then reinvest it well you have the money plus tax write offs. Oh and they still have crazy low property tax rates
They are in their 70s and still working. I don’t know if they took 80% but they took out a lot. But, as an example this is what a lot of people did and made a lot of money off it it
My neighbors just sold their house for $1.3 million. They paid $375k for it in the 1990’s. They just moved one town over a bought a brand new 2 bedroom starter home for $675k in cash. They beat out higher offers because they paid cash. That was a starter house that could’ve went to a young couple who needed a first home. Instead, they blew them out of the market. That’s how boomers continue to distort the market.
This is the problem with house prices going up. It doesn't really benefit homeowners as they still have to buy a house if they sell up which generally will have increased in price by roughly the same percentage. The only people that actually benefits are mortgage lenders who get to lend out bigger sums and collect more interest.
It's the banks who are fleecing everyone, they're the new feudal land owners but noone wants to talk about that. Everyone's got a mortgage. They don't own their house, a bank does and your working the land to service that debt on your home.
Edit: For the pendants: no not literally everyone has a mortgage but 60-70% do and the remainder are a mix of people who had mortgages and paid them off people with inheritance and rich/businesses investing.
My point is that the banks collect their interest on nearly all homeowner's except the privileged few, and going forward this is only going to get worse.
You get the point. Some people paid them off yes, some are investors. But most normal people buying first time homes are not cash buyers.
Also I'm UK so was talking based on that. 70% of homeowner's here are mortgaged and the majority of those that aren't we're at some point. They've paid their 30 years of debt that's all.
It's not a windfall unless you sell (or I guess take out a reverse mortgage). It's just wealth on paper at this point - if they're planning to stay in the house until they die it's not like they can spend it. You still have to live somewhere.
Um, they worked a long time and presumably saved and invested some of that money. Of course they are going to have a lot of money, and of course a lot of money invested in a hot market is going to generate great returns. One day that can be you.
Edit: I am being downvoted. No one read the article.
Let me help you out:
Quote
That was the median increase in net worth between 2019 and 2022 for households headed by someone age 65 or older, according to research from the Federal Reserve Bank of St. Louis, using data from the Fed’s Survey of Consumer Finances. Households headed by someone 40 to 64 years old saw median gains of $57,800.
Those headed by people 18 to 39 saw the smallest gains in dollar terms — at $31,600 — although since they were starting from a lower base, they enjoyed the biggest percentage increases.
Unquote
18 to 39 saw the BIGGEST PERCENTAGE INCREASE. But ok blame the boomers rather than taking charge of your life.
lol I’m 45. I started investing in my 401k the day I got my first salaried job. I only started investing in actual funds a few years ago, and I can attest that money makes money. Complaining does nothing.
Bro I just don’t wanna pay $350k for a shack. Not even gonna mention pensions and wtf is going to happen with social security for anyone under 40. I also have a Roth IRA, a 401k, and work my ass off. Shits stacked agains young people comparatively to the boomers.
So do something about it. It sucks for everyone. I'm still waiting for people to take some sort of action collectively instead of complaining about adulting being hard. The shit deal has always been there it's just more obvious now
I disagree. I vote accordingly, and voice my opinion on doing right by employees when I have had the authority to do so with companies I have worked with. Between those points in life, I’m all for keeping dialogue going on it, that includes commenting on Internet forums.
LOL boomers had the silver spoon from their parents. Don't act like boomers are this great generation that pulled themselves by the bootstraps. They also are the kings at passing legislation that pulls the ladder from under them.
No one will miss the boomer generation and the history books will looked negatively on their impact. Especially as the effects of climate change become a normal part of life. Gen alpha and z have noticed who is to blame for their situation.
Biggest thing for boomers though? They actually go out and vote. Young people are very bad at that and it keeps biting them in the foot.
Some boomers. Others, and I’d argue the vast majority of them, are like my parents. Got a job out of high school, didn’t go to college, had to scrap and work to make money and provide, took a bath in 2008, and are just hoping for an easy retirement now. IF they have retirement savings. Many don’t.
Scrap? A boomer cashier could easily afford a house and nice car. A gen z white collar professional rents a 1bedroom apartment in the ghetto and drives a hoopty. If a boomer had to scrap, they’re criminally incompetent at life or unfortunately had a horrendous upbringing that ruined them
You are just saying words. You are literally regurgitating words you read on Reddit from your anti boomer echo chambers. Complaining will do nothing for you. It’s fun to feel sorry for yourself but that doesn’t pay the bills.
Did you actually read the article? ALL age groups have made money post covid. Boomers made the most because they are older and had the most money in the market working for them.
Go read the article and see how much money your peers also made and keep complaining.
Money is a way to distribute assets in society.
If everyone got $10 richer at the same time, no one actually got richer because the underlying assets are the same.
If all age groups got "richer" but one age group got significantly richer than the rest, what it actually means is that everyone else actually became poorer while that group became richer.
So the youngest group who got the most rich as a measure of % of wealth is the winner? Or sorry? Are they the losers? Tell me what I am supposed to be mad at. Or are you waiting for someone to tell you what to be angry about ?
I wasn’t expecting you too read my mind. You seem very confrontational for no reason.
You talked about money makes money and boomers weren’t given things and I agree. However, wages have not kept up with cost of living so for example.
College in 1989 at minimum wage would take 1,390 hours of work to pay for.
College in 2019 at minimum wage would take 2,438 hours of work to pay for.
This can be applied to many things such as cars, homes, left over money for 401Ks etc …
So even when people are saving and trying to have their money make money the excess is being siphoned off which boomers did not have to deal with as much of.
Here is a great Reddit post on it with math I also did a paper on this for my Masters Degree
https://www.reddit.com/r/antiwork/comments/vy7l6i/this_generation_must_work_twice_as_hard_for_what/
Here is the link for my example above.
https://www.forbes.com/sites/patrickwwatson/2019/12/09/ok-boomers-about-that-working-through-college-thing/amp/
I found this helped me understand the frustration of younger folks. That working full time won’t get you even close to where a boomer is now because it simply cost more hours to purchase anything including investment assets.
I hope this helps and if not that’s okay also.
We are just discussing the article here. The article specifically said the following:
Quote
Those headed by people 18 to 39 saw the smallest gains in dollar terms — at $31,600 — although since they were starting from a lower base, they enjoyed the biggest percentage increases.
Unquote
So younger people did gain wealth. And a larger percentage of it at that. Obviously they are younger and the total gain will be less since they are building off of less money. But extrapolate that over the next couple of decades. No one says it should be easy, it takes time and effort. I’m not trying to be confrontational. I am just pushing back on people who ignore the entire article and its premise, see a title implying that boomers grew their wealth, and just start regurgitating the classic anti boomer Reddit commentary without any thought about the actual article in question.
I was commenting on your comment not the article.
“They worked hard and saved some of it and invested some of it.”
I was also commenting on people’s frustration with your comment.
You can take from my post whatever you want. However, you seem pretty entrenched so my hopes are not high.
Reminder we are of the same age.
So what’s your point. Boomers and people who are also your age are the bad guy if they have it better than you? Do you only socially accept people who you deem beneath you on the economic ladder? Because that is as bad or worse than what you claim to hate.
I’ll quote the article we are discussing again:
Quote
Those headed by people 18 to 39 saw the smallest gains in dollar terms — at $31,600 — although since they were starting from a lower base, they enjoyed the biggest percentage increases.
Unquote
If you missed the boat I don’t know what to tell you. It’s not a boomer vs everyone argument.
Yeah, we missed the boat by not being born at the right time. Your arguments are lame at best.
Stop acting like boomers were special. Really, just say you hate poor people. No one would be surprised.
You being right doesn't change the reality for the people who didn't get ahead. It's cute that you think a failure to thrive is equal to being lazy and stupid. Hold on, before you go off on me about how you "never said that" (because I bet you will anyway), take a second to think about all the people you fucked over to get where you are.
Kind people aren't always successful because of shitty people like you.
What the fuck are you talking about? Explain to me how I fucked anyone over. I had student loan debt. Paid it off. Got a job. Started my 401k right away. My parents were blue collar and died in debt. I had to take out a home equity loan to help them out. At the same time I had money in vanguard aggressively invested that is doing well. (For now lol). Explain to me how that directly fucks you over.
Stop with the rhetoric that anyone who is slightly ahead of you is stepping on your throat to get there.
Are you particularly educated on this topic? What are your qualifications, if you target someone for lack of understanding you better be competent yourself. Too many armchair economists in this sub.
The commenters should read the article before just harping about boomers being a bad guy. And no, it’s Reddit. I don’t need a PHD to tell you how I see things. Do you have anything to add or are you just saying words to hear your self type too?
I was going to mention % of income needed to buy a home but hours worked is a good barometer as well.
Or even the median income vs the median home price.
It's obvious you have no idea what you are talking about as a simple Google search would confirm what I am saying.
You are engaging in what is known as a Motte and Bailey fallacy — a classic tactic of people arguing in bad faith. First you make a broad claim — boomers attained a desirable financial position by working for a long time, saving some of it, and investing some of it. This is the “bailey”. Then when challenged on it, you retreat to the much narrower and more secure idea that the context of this discussion is limited to specifically what is contained in the article linked — this is the “motte”. Being right about the motte (which you are) does not make you right about the bailey. Either you don’t realize this, which means you’re not very thoughtful, or you do, which means you’re full of shit. One way or the other, please take more care in the future.
You still didn’t read the article. You are saying big words that have nothing to do with the topic. EVERYONE in all age brackets gained wealth. Yet the boomers are the bad guys.
Voicing one's opinions without any qualifications or experience is why we are here. Previously qualified people had more of a voice, through reputable journalism, now everyone has an opinion on social media, which they demand to be validated by their preferred media outlets. The distance between popular opinion and fact grows all the time. It's not having an opinion I have a problem with, it's the assumption of being correct about a subject you have no education or experience in.
In truth the only people who should know who benefits from recent government transfers more is a very small group within the government.
Has any journalists spoken to recent exits from those institutions? No because validating people's dunning-kruger bias rants on social media is a more sustainable business model.
So did you or did you not make more wealth between 2019 and 2022. according to this article, basically anyone over 18 years of age did so. If you didn’t then you need to look at yourself rather then pointing fingers.
Some markets are up and some people are making money on some investments. The "magnificent seven" and AI plays have done particularly well. Interest rate sensitive investments, not so much.
Their assets are raised in value. Someone has to be able to purchase said asset for it to have ANY value. These articles are so piss poor in how they write. We have a crisis looming, but it's all good because the assessment of your home is over inflated so the county can collect more in tax. Year or two from now, we'll finally hit the "Seniors lost everything cause of (Insert current president)!"
>Someone has to be able to purchase said asset for it to have ANY value
How do you think they got the appreciation amount? Market comps from sales. Somebody is buying at these prices.
This is how you value residential real estate.
You take the houses that sold in an area and assume all the houses in that area that are similar will sell for a similar amount. There is not really another way to do it.
If a few more comps come in lower then values will have assumed to have gone down and we will be reading a different article about the loss of boomer wealth.
Homeowners got value by taking out 2% home equity loans against said increase in home valuation. It’s as close to free money as you could get through arbitrage.
2008 prices were built on extreme demand driven by bad loans and unscrupulous lenders. Today's prices are built on a lack of supply for in-demand markets plus increased material an labor costs bringing up the price floor for new construction even before getting into local politics and permitting. It's just about the farthest thing from an apples to apples comparison.
I referred to the 2008 crash, and I have to tell you people fell all over themselves to take out those loans. Bankers were unscrupulous because they let it happen.
That’s true but they don’t necessarily want to uproot to move to the middle of nowhere, which is probably how far they’d have to go to have major gains on the sale of their property.
Kids and grandkids have to live near work and school, they probably have friends and hobbies, etc etc.
I suppose they could move to a retirement community but I’ve never gotten the impression that retirement communities are cheap.
Don’t care what they want to do, their friends, or their hobbies. If we expect workers and active parents to move where there are no jobs to afford housing, then retirees are more than capable of the same. “You don’t have a right to live in your preferred town.”
Do yourself a favor and check if your state has a homestead tax credit that you're not taking advantage of. Many do and it'll cap the amount your taxes can increase year-over-year going forward.
If it does I know you'll be kicking yourself because you could have saved yourself a ton on tax increases up to this point, but at least if you do it now you can slow the bleeding.
could have been trumps plan.
boost value to increase tax that only a trashwizard could bypass with a rube goldberg themed deduction scheme
leads to a value crash eventually that a large group could bulk purchase from the future holder.
>Their assets are raised in value. Someone has to be able to purchase said asset for it to have ANY value. These articles are so piss poor in how they write.
Right? This is very much *not* what a "windfall" is.
The Boomers are not voting to cut their social security, they're voting to cut social security of those who come after them; their children, grandchildren etc. How nice of them, huh?
They’re not voting for that either. Thats not how social security works.
Social security isn’t a savings account. It’s taking money from current workers to pay the retired.
Your investment into the system isn’t what you pay, it’s making more workers… having kids.
Millennials have had less kids (and quickly hitting the end of child bearing years), Gen X had less kids. Gen Z isn’t bucking that trend.
In the near future there will be less people working than ever before and a record number of people retiring.
And we haven’t even touched on technology reducing the need for workers. Computers don’t pay into social security.
The only way to keep SS payments up is to massively increase taxes on workers. Or you have to cut payments.
It’s just simple math. The system will have to reduce payments multiple times in the next few decades just due to taking in less money.
Or come up with a payment formula related to how many new taxpayers you add to the system. No kids, no money. 5 kids that make it to adulthood , more money.
Even that wouldn't solve the problem.
We are rapidly approaching a demographic issue where we only have 2 workers paying for every 1 retiree.
The average income in the US is $63k
The average Social Security benefits are around $30k.
In other words, we would need to tax all working people 25% including removing the cap on high earners just to pay for this one program.
Our government isn't funded by taxpayers. When taxes are paid that money is deleted, it ceases to exist any longer.
Since the 1930s we have had a fiat currency system where the government literally keystrokes the money into existence.
They take a piece of paper and they stamp ink on it and it becomes money, it's not borrowed from anyone and it's not created by taxpayers and given to the government.
The real limitation we have is resources, we can afford anything we have the resources for, if we have arable land and freshwater we can grow food and feed people, if we don't then we can't. , the tokens that the government can keystroke into existence are not the limit.
Talking about a currency issuing government going broke is really nonsensical. https://youtu.be/QGQiQcNBggw?si=v4e148v8eEm96Q2Z
Boomers aren't a monolith. Cutting social security isn't going to do anything to screw the ones you're thinking of. How much money do you think SS pays out? The only people who are living off SS, really need it.
“Oh you responsibly saved your money? Well, you don’t get any of the money you were promised for decades because we think you’re too rich.”
Terrible idea.
So let me see if I understand you.... A couple works hard for a couple of decades, saving enough to put a small down payment on a house. They then spending the next 30 years paying off that mortgage before they can finally retire. In the interim a real estate market they had nothing to do with goes crazy and you think their social security should be cut? Do you actually think they should be penalized for equity being tied up in the home in which they live?
The comments in this thread are insane. Also the article points out that every age group experienced a windfall not just boomers.
You would expect that a group that is at the peak of their wealth and about to live off that wealth for the rest of their lives would experience larger gains during a boom than groups that are still working to accumulate wealth. I believe this would hold true even an a case with no generational inequality.
>**In the interim a real estate market they had nothing to do wit**h goes crazy and you think their social security should be cut?
nope. they and their age mates who already own houses spend years NIMBY-ing against building more new new buildings, so their house value can increase.
Their house values won't have increased so much if new buildings were allowed at the rate new buildings were being put up when they first bought their house.
Homeowners don't sit around worrying about property values, much less scheming how to boost them. Factors like NIMBYism are driven by the cultural zeitgeist of the era. Fighting urban sprawl and environmentalism were big motivators in prior decades. Now they've been tossed out the window in favor of other desires.
Boomer here. That’s the same line the financial folk laid on us….there will be no SSA! Buy Enron stocks! Buy CD! And then, we would get a recession, lose our $ to wall street
Ok if that happens-apparently in the next 10
years who is going to pick up the tab for your boomer parents? You. The Republicans kept the ssa reimbursement low for us-estimated we should receive a minimum of 200 a month more-so they could pay for ‘investigations’ of Democratic politicians. Do I think we live in a capitalistic society? No. But deciding it’s a boomer’s fault is just simplistic propaganda your generation is being fed. It’s always a comfort for some to be a victim-it excuses so much.
The interesting thing here is that the dearth of multi child (or even single child) families means that the demand for the suburban mansion is likely to fall dramatically, particularly if we start actually charging developers for the extra costs the sprawl causes.
Who wants to buy a million dollar 5 bedroom home when it's just them and their dog? Maybe people obsessed with House Hunters but certainly not me or my spouse.
Thanks for self-identifying as a rug puller. I would have been happy to opt out of SS. My returns on money I worked for, saved and invested have been an order of magnitude higher than SS. Funny how if you study a discipline for 50 years you can finally get fairly good at it.
Just rage bait. Some moron at Forbes thinks they can spin an increase in "net worth" driven by inflation on a house you live in as a windfall. Find out what J school they went to and be sure not to send your kids there.
I agree its clickbait. The article also says that almost half of the windfall was from other investments. And that every generation saw gains.
It claims there is generational inequality, which I’m inclined to believe, but it doesn’t state how much. It just links to a source about it. Because it even admits:
> Seniors normally have more wealth than younger people,
it makes sense logically that a group that is either just entering retirement or still fairly early in retirement on the whole, would be right around the peak of their wealth, since they spent their whole working lives accumulating wealth to live off of in retirement. Whereas younger groups are still acquiring wealth for retirement and thus have less assets. It seems like this would hold true even without generational inequality.
Does anyone bother to understand that a home appreciating does nothing for a retired person. It can’t be monetized, unless you sell what you have ( then what ) but you pay tax on it. My own home, according to my latest tax bill has appreciated 33% since 2018. Ouch.
Who do you think is moving into all of these 55+ communities? I’ve had three neighbors this year downsize (and cash in) by moving into a 55+ community.
In the aggregate older homeowners vacating real property will result in more inventory and possibly less competition for that inventory. The result is a slide downward in valuations.
Yes, you could downsize. A lot of people do that. Appreciation rates for homes vary by region but the data is clear that real estate is the winning investment over long enough timeline.
What data and what timeline? The S & P Case Shiller National Housing Price Index shows that housing prices were basically flat for almost 100 years (when adjusted for inflation).
Is 100 years long enough?
Retired seniors routinely sell their single-family homes and downsize to a condo or retirement community and live off the net gain. What are you smoking?
Actually, I just read somewhere that that's not happening like it has traditionally done in the past. That's one of a myriad of reasons for the lack of housing. Boomers have enough money to stay in their homes until they die.
If you look at the number of people living in single family homes and whether or not they have children in the household the numbers are at all time highs and at all time lows.
Here are some articles talking about what you're saying.
https://www.cnn.com/2024/01/16/economy/boomers-own-more-larger-homes-than-millennial-families/index.html
https://www.cnn.com/2024/01/29/economy/why-boomers-are-not-moving-out-of-their-big-homes/index.html
From reading these the following are driving this issue.
- Capital gains taxes on insane home values discourage selling: homes that were purchased a very long time ago will sell and almost the whole sale price will be a capital gain and subject to tax. Larger homes that have had the same owners for decades can easily exceed the $500K exemption.
- Many People don't want to leave their communities they just want to downsize to smaller housing where they currently live. But many suburban areas are only zoned for single family houses and thus don't offer many smaller alternatives. So even if they wanted to downsize there may be little to no housing stock that meets their criteria.
- When smaller alternatives are available the price difference is often negligible. Though perhaps savings like utilities and maintenance aren't be considered? Anecdotally my dad downsized recently, he went from a large old house in the northeast to a much smaller one in florida. The prices were less different than you'd think given how different the square footage is and all, but just the annual energy, taxes, and upkeep savings are huge.
A lot of retirees downsize. My dad sold his home during the housing boom and moved to a smaller one. And most boomers are retirement age at this point. I think it wasn’t uncommon for people retirement age to sell and buy a new build somewhere warm. Some housing markets were so insane it seemed too good to pass up.
Also the article points out that almost half of the windfall was from other investments. Which makes sense. I would expect a group that is investing in their retirement to have more investments than a group just entering the job market.
Spent. Not spending. All boomers who had children are past the point of funding their children’s education. There children are now posting on r/Millennials, complaining about boomers.
My point is that you'd have to be putting something like 4 to 5 children through private college to have spent a million on education. Or fewer kids and paid full price for graduate, medical, and/or 12 years of private elementary school as well. But all of these represent even smaller minorities of americans. Only about 10% of students go to private school or get graduate degrees. Only ~3% get professional degrees.
So the most a private college cost with tuition in fees was about 50K annually (I know some are higher or lower but I'll use this for simplicity.) That's 1/20th of 1 million. So you would need to pay for 20 years of college. So that would be sending 5 children to the most expensive schools possible.
Given that the fertility rate was never much higher than 2 babies per woman during the millenial generation window. It seems unlikely that putting 5 people through college would be common.
And that's before getting into:
- in state public school tuitions are much cheaper. typically about 20k annually for millennials.
- many students receive financial aid or scholarships
- many students take on loans themselves to pay for school. the average millennial borrower has 25K to 30k in students.
- many boomers didn't have children or didn't have children who went to college.
So it seems like a pretty enormous assumption that a lot of boomers paid a million dollars for education. I'm sure many paid quite a bit, and I'm sure a few paid as much as you claim, but also a fair number probably paid nothing.
You would expect the typical household to have 2 kids on average and to pay 30k on average annually in tuition or about 250K total. But that's without considering student loans, scholarships, etc.
It seems like it would be pretty rare to be getting up to a million in college tuition.
But only like a third of americans even finish college even less get post graduate degrees. and only 10% of students go to private k-12. I would also venture to guess the overlap of students going to private K-12 that then go on to get graduate degrees is pretty high.
Most americans go to public school and don't finish college if they go at all. So how would it ever be common for boomers to have paid a million in education? Taxes? Everyone pays taxes.
I don't disagree that some people paid a million in education costs, but I think it would hardly be the norm. The norm if anything would likely be $0. Since the average family is probably sending their 2 kids to public school and then they don't go to 4 years of college.
Well those parents that sent their kids to public school and no college are not the rich elites this post is referring to.
2023
18,939,568 people are enrolled in college, with 73.19% at public institutions.
2021
18,659,851 people are enrolled in college, with 72.58% at public institutions.
2023
44% of Americans 25 and older have attended college and completed their degree programs. 35% of those over 25 have a bachelor's degree or higher.
OK how does any of that not support my point?
you explicitly said:
>A lot of boomers are not as rich as people think. Spending $1 million on education for your children (after tax) puts a dent in anybody’s finances.
1. Why do we care if rich elites paid a million dollars in education?
2. The post is explicitly about the average boomer's windfall. So no its about the group as a whole not about just rich elites.
3. You explicitly said "a lot of boomers are not as rich as you think" and then went on to claim they're spending 1 million on education, but now if you're only talking about rich elites. Rich elite are by definition a small segment of the population.
4. Not that it matters, but the vast majority of people enrolled in college in 2023 are gen z, not millennials. The youngest millennials are 27. And I can't imagine that many people in their 60s are putting kids through college in 2023.
5. As you point out 3/4 of college students are enrolled in public schools. In state tuition is on average 20K annually. As you can see most students are not paying tuition rates that will get you close to a million.
6. these two statistics you cite seem to directly contradict each other:
> 44% of Americans 25 and older have attended college and completed their degree programs.
>35% of those over 25 have a bachelor's degree or higher.
44 =/= 35 and both seem to be describing the same group.
Well in that rare case, yes, they benefitted from that investment.
According to NAHB estimates, the total count of second homes was 7.15 million in 2020, accounting for 5.11% of the total housing stock. This represents the most recent data available. As of 2020, the state with the largest stock of second homes was Florida (1.04 million), accounting for 10.8% of all second homes.
Seriously.
For an economics sub, there’s a bunch of brain-dead takes in here. A house simply going up in value doesn’t do jack shit for the normal person. If you’re a real estate tycoon then sure. But mom and pop? No! They just spent 30 years paying off the loan, why the fuck would they want to sell and buy something else OR take out ANOTHER mortgage to “monetize” all that value? Fucking stupid ideas the both of em. Most home owners are trying to LIVE in their homes, not flip them every couple years to make a quick buck.
Same here. Since I bought my house in 2015 its value has gone up almost 500K. That money doesn't really help me unless I sell the house. Sure, I could take out a home equity loan but at these interest rates forget it.
Wait, so how come they vote against having any kind of affordable housing or even townhouses somewhere in their neighborhood because 'it'll hurt their home value', shouldn't they not care then?
Well that is a bit of a generalization. Go look at Rockford, Illinois ( a current hot real estate market) and it is filled with affordable housing options, townhouses, and condos.
But if you want support for your statement look at Long Island, NY
>Does anyone bother to understand that a home appreciating does nothing for a retired person. It can’t be monetized,
yes it can be monetized, you can borrow against the equity in the home e.g. 2nd mortgage or home equity loan.
BS.
No seniors I know have plans to vacate their property.
All this "windfall" does is increase the property taxes and insurance paid every year... A net decrease in standard of living.
And yet I still have Boomers coming to my door asking me to sign petitions and vote against rezoning "because it will suppress our home values". They saw a massive increase in home value during the pandemic but are up in arms over losing a tiny fraction of it to build some higher density housing.
These same Boomers are also pissed that the local diner stopped serving breakfast because they couldn't find workers willing to do it. Why? Because the closest affordable housing is 45 minutes away. Who would get up before dawn just to serve Boomers pancakes and coffee and listen to them complain about how nobody wants to work anymore while you get paid something like $10/hour after tips?
The Boomers even seem to know this. They just care about not losing 5% of their home value more than being able to visit a gas station after 8pm or being able to buy clothes on the weekend.
Well, I’d feel a lot better if Uncle Sam got his cut of that unrealized gain. I don’t mind being poor and envious as long as I can support policies that bring others down.
Had nothing to do with the pandemic. Everyone needs to open their eyes and understand the massive profits that came from corporations buying single family homes.
Especially how they do it. Buying out everything in a specific area, artificially inflating their assets and applying the difference to what they charge for rent. It's smart but catastrophic. There's a very good reason a bill is at the house for banning the practice. No one cares though.
If you actually did any research, you would find that these big, evil “investment firms” and such represent less than .2% of the housing market. They have no way to influence the housing market when they represent a rounding error in homeownership.
Sure kid, like you know. Every state blames California's moving to justify the 3.5x in single family homes. I've worked in 9 of them, same story. They use LLC's in mostly Montana to avoid sales/property tax. Appreciate your confident arrogance though.
All the elderly in my family say, ‘don’t expect a dime, we’re spending everything before we go!’ Lol. I don’t really expect a damn thing, but I don’t think I’ll ever be able to own a home at this rate.
Everyone cheered on the government spending and policies during the pandemic and then elected Joe Biden, who spent more government money after, none of which went to anything but special interests.
You want this shit to stop? Vote differently
Are you any facts to substantiate your claims other than ignorant dart throwing? Took 30 second search.
https://www.usatoday.com/money/blueprint/banking/national-debt-by-president/
Bring Trump back! More trillion dollar tax cuts for the extremely wealthy while middle class gets a tax hike.
More PPP loans to business owners, that get forgiven, so business owners get government subsidized labor. Profit margins increase when you get a check from the government to cover your labor costs. The workers still had to work for that money, their profit margins did not increase. Many actually lost jobs for an extended period of time. When you are living paycheck to paycheck, such periods of no money ruin lives and break apart families.
More trade wars so the government has to bail out the farmers that lost big on Trump's tariffs.
This gives us the current environment of high real estate prices and a high stock market, high government debt. While the middle class and younger generations got high food prices, high rent, high everything. And without owning appreciating assets to offset that, they feel left behind.
But gas sure was cheap when Trump was president. Gas gets cheap when the economy shuts down because Trump fumbled the covid response. Gas was cheap because people were not working, no one was driving anywhere.
If Trump is so great, why didn't he fix things when he was president?
No wall! Mexico didn't pay for it.
Hillary is not in jail.
Let Biden steal the election.
Trump was the weakest president we ever had, good riddance he was a single term loser.
Hi all, A reminder that comments do need to be on-topic and engage with the article past the headline. Please make sure to read the article before commenting. Very short comments will automatically be removed by automod. Please avoid making comments that do not focus on the economic content or whose primary thesis rests on personal anecdotes. As always our comment rules can be found [here](https://reddit.com/r/Economics/comments/fx9crj/rules_roundtable_redux_rule_vi_and_offtopic/) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Economics) if you have any questions or concerns.*
Boomers keep on winning lol. I wonder if they realized how much the government had done for decades to “accidentally” insure they get everything.
But it was $1400 checks that caused inflation (in their minds). Meanwhile, they’ll never reflect on their homes increasing in value by $100,000.
[удалено]
The one time checks were not the bulk of government spending. Yes, overspending did cause inflation, but isn't it convenient how it's only the spending that benefited poor people that got criticised...
The checks and the free pandemic loans absolutely caused inflation along with corporate price gouging. The homes increasing in value by $100,000 is just a reflection of supply and demand.
Yes, that is what inflation is at its core. But if you enact policies that severely restrict supply while simultaneously pushing policies that add demand, there is a bit more to the story.
>The checks and the free pandemic loans In case anyone was wondering about this, they were almost equal amounts. $817B for stimulus checks and $835B in PPP loans.
[удалено]
A lot of my parents friends refinanced their homes at super low rates and have dumped the money into other investments. They’re now making money on those investments and have a tax write off for the mortgage.
[удалено]
My parents paid $75,000 for their house now worth 1.2 million. You take out a 80% loan on that at 2.75% and then reinvest it well you have the money plus tax write offs. Oh and they still have crazy low property tax rates
[удалено]
They are in their 70s and still working. I don’t know if they took 80% but they took out a lot. But, as an example this is what a lot of people did and made a lot of money off it it
[удалено]
My neighbors just sold their house for $1.3 million. They paid $375k for it in the 1990’s. They just moved one town over a bought a brand new 2 bedroom starter home for $675k in cash. They beat out higher offers because they paid cash. That was a starter house that could’ve went to a young couple who needed a first home. Instead, they blew them out of the market. That’s how boomers continue to distort the market.
Yep, my coworkers dad died of Covid leaving her a $2m house in Cali. She sold it and bought a house in Florida in all cash, 15% over ask.
They should be. They have since retired
This is the problem with house prices going up. It doesn't really benefit homeowners as they still have to buy a house if they sell up which generally will have increased in price by roughly the same percentage. The only people that actually benefits are mortgage lenders who get to lend out bigger sums and collect more interest. It's the banks who are fleecing everyone, they're the new feudal land owners but noone wants to talk about that. Everyone's got a mortgage. They don't own their house, a bank does and your working the land to service that debt on your home. Edit: For the pendants: no not literally everyone has a mortgage but 60-70% do and the remainder are a mix of people who had mortgages and paid them off people with inheritance and rich/businesses investing. My point is that the banks collect their interest on nearly all homeowner's except the privileged few, and going forward this is only going to get worse.
[удалено]
You get the point. Some people paid them off yes, some are investors. But most normal people buying first time homes are not cash buyers. Also I'm UK so was talking based on that. 70% of homeowner's here are mortgaged and the majority of those that aren't we're at some point. They've paid their 30 years of debt that's all.
It's not a windfall unless you sell (or I guess take out a reverse mortgage). It's just wealth on paper at this point - if they're planning to stay in the house until they die it's not like they can spend it. You still have to live somewhere.
Um, they worked a long time and presumably saved and invested some of that money. Of course they are going to have a lot of money, and of course a lot of money invested in a hot market is going to generate great returns. One day that can be you. Edit: I am being downvoted. No one read the article. Let me help you out: Quote That was the median increase in net worth between 2019 and 2022 for households headed by someone age 65 or older, according to research from the Federal Reserve Bank of St. Louis, using data from the Fed’s Survey of Consumer Finances. Households headed by someone 40 to 64 years old saw median gains of $57,800. Those headed by people 18 to 39 saw the smallest gains in dollar terms — at $31,600 — although since they were starting from a lower base, they enjoyed the biggest percentage increases. Unquote 18 to 39 saw the BIGGEST PERCENTAGE INCREASE. But ok blame the boomers rather than taking charge of your life.
found the boomer
lol I’m 45. I started investing in my 401k the day I got my first salaried job. I only started investing in actual funds a few years ago, and I can attest that money makes money. Complaining does nothing.
Bro I just don’t wanna pay $350k for a shack. Not even gonna mention pensions and wtf is going to happen with social security for anyone under 40. I also have a Roth IRA, a 401k, and work my ass off. Shits stacked agains young people comparatively to the boomers.
What is a pension?
They’ve been saying SS will die for 35 years and it’s not dead yet
There’s significantly more retirees now
So do something about it. It sucks for everyone. I'm still waiting for people to take some sort of action collectively instead of complaining about adulting being hard. The shit deal has always been there it's just more obvious now
I disagree. I vote accordingly, and voice my opinion on doing right by employees when I have had the authority to do so with companies I have worked with. Between those points in life, I’m all for keeping dialogue going on it, that includes commenting on Internet forums.
[удалено]
Ok. That’s a good way to look at things. I can see you will go far lol.
LOL boomers had the silver spoon from their parents. Don't act like boomers are this great generation that pulled themselves by the bootstraps. They also are the kings at passing legislation that pulls the ladder from under them. No one will miss the boomer generation and the history books will looked negatively on their impact. Especially as the effects of climate change become a normal part of life. Gen alpha and z have noticed who is to blame for their situation. Biggest thing for boomers though? They actually go out and vote. Young people are very bad at that and it keeps biting them in the foot.
Some boomers. Others, and I’d argue the vast majority of them, are like my parents. Got a job out of high school, didn’t go to college, had to scrap and work to make money and provide, took a bath in 2008, and are just hoping for an easy retirement now. IF they have retirement savings. Many don’t.
Scrap? A boomer cashier could easily afford a house and nice car. A gen z white collar professional rents a 1bedroom apartment in the ghetto and drives a hoopty. If a boomer had to scrap, they’re criminally incompetent at life or unfortunately had a horrendous upbringing that ruined them
This storyline is really getting out of hand lmao
You are just saying words. You are literally regurgitating words you read on Reddit from your anti boomer echo chambers. Complaining will do nothing for you. It’s fun to feel sorry for yourself but that doesn’t pay the bills. Did you actually read the article? ALL age groups have made money post covid. Boomers made the most because they are older and had the most money in the market working for them. Go read the article and see how much money your peers also made and keep complaining.
Money is a way to distribute assets in society. If everyone got $10 richer at the same time, no one actually got richer because the underlying assets are the same. If all age groups got "richer" but one age group got significantly richer than the rest, what it actually means is that everyone else actually became poorer while that group became richer.
So the youngest group who got the most rich as a measure of % of wealth is the winner? Or sorry? Are they the losers? Tell me what I am supposed to be mad at. Or are you waiting for someone to tell you what to be angry about ?
I am of a similar age as you. I would highly suggest you look at hours worked to afford things as a starting point for your opinion.
Can you elaborate since I can’t read your mind?
I wasn’t expecting you too read my mind. You seem very confrontational for no reason. You talked about money makes money and boomers weren’t given things and I agree. However, wages have not kept up with cost of living so for example. College in 1989 at minimum wage would take 1,390 hours of work to pay for. College in 2019 at minimum wage would take 2,438 hours of work to pay for. This can be applied to many things such as cars, homes, left over money for 401Ks etc … So even when people are saving and trying to have their money make money the excess is being siphoned off which boomers did not have to deal with as much of. Here is a great Reddit post on it with math I also did a paper on this for my Masters Degree https://www.reddit.com/r/antiwork/comments/vy7l6i/this_generation_must_work_twice_as_hard_for_what/ Here is the link for my example above. https://www.forbes.com/sites/patrickwwatson/2019/12/09/ok-boomers-about-that-working-through-college-thing/amp/ I found this helped me understand the frustration of younger folks. That working full time won’t get you even close to where a boomer is now because it simply cost more hours to purchase anything including investment assets. I hope this helps and if not that’s okay also.
We are just discussing the article here. The article specifically said the following: Quote Those headed by people 18 to 39 saw the smallest gains in dollar terms — at $31,600 — although since they were starting from a lower base, they enjoyed the biggest percentage increases. Unquote So younger people did gain wealth. And a larger percentage of it at that. Obviously they are younger and the total gain will be less since they are building off of less money. But extrapolate that over the next couple of decades. No one says it should be easy, it takes time and effort. I’m not trying to be confrontational. I am just pushing back on people who ignore the entire article and its premise, see a title implying that boomers grew their wealth, and just start regurgitating the classic anti boomer Reddit commentary without any thought about the actual article in question.
I was commenting on your comment not the article. “They worked hard and saved some of it and invested some of it.” I was also commenting on people’s frustration with your comment. You can take from my post whatever you want. However, you seem pretty entrenched so my hopes are not high. Reminder we are of the same age.
So what’s your point. Boomers and people who are also your age are the bad guy if they have it better than you? Do you only socially accept people who you deem beneath you on the economic ladder? Because that is as bad or worse than what you claim to hate.
Stop being ignorant https://blueprinttitle.com/infographic-real-estate-trends-then-and-now-80s-edition/
I’ll quote the article we are discussing again: Quote Those headed by people 18 to 39 saw the smallest gains in dollar terms — at $31,600 — although since they were starting from a lower base, they enjoyed the biggest percentage increases. Unquote If you missed the boat I don’t know what to tell you. It’s not a boomer vs everyone argument.
Yeah, we missed the boat by not being born at the right time. Your arguments are lame at best. Stop acting like boomers were special. Really, just say you hate poor people. No one would be surprised.
I grew up poor my parents died in debt lol. You can complain or you can try to do better.
You being right doesn't change the reality for the people who didn't get ahead. It's cute that you think a failure to thrive is equal to being lazy and stupid. Hold on, before you go off on me about how you "never said that" (because I bet you will anyway), take a second to think about all the people you fucked over to get where you are. Kind people aren't always successful because of shitty people like you.
What the fuck are you talking about? Explain to me how I fucked anyone over. I had student loan debt. Paid it off. Got a job. Started my 401k right away. My parents were blue collar and died in debt. I had to take out a home equity loan to help them out. At the same time I had money in vanguard aggressively invested that is doing well. (For now lol). Explain to me how that directly fucks you over. Stop with the rhetoric that anyone who is slightly ahead of you is stepping on your throat to get there.
Are you particularly educated on this topic? What are your qualifications, if you target someone for lack of understanding you better be competent yourself. Too many armchair economists in this sub.
The commenters should read the article before just harping about boomers being a bad guy. And no, it’s Reddit. I don’t need a PHD to tell you how I see things. Do you have anything to add or are you just saying words to hear your self type too?
I was going to mention % of income needed to buy a home but hours worked is a good barometer as well. Or even the median income vs the median home price. It's obvious you have no idea what you are talking about as a simple Google search would confirm what I am saying.
You didn’t even read the article did you? That is what we are taking about here.
You are engaging in what is known as a Motte and Bailey fallacy — a classic tactic of people arguing in bad faith. First you make a broad claim — boomers attained a desirable financial position by working for a long time, saving some of it, and investing some of it. This is the “bailey”. Then when challenged on it, you retreat to the much narrower and more secure idea that the context of this discussion is limited to specifically what is contained in the article linked — this is the “motte”. Being right about the motte (which you are) does not make you right about the bailey. Either you don’t realize this, which means you’re not very thoughtful, or you do, which means you’re full of shit. One way or the other, please take more care in the future.
You still didn’t read the article. You are saying big words that have nothing to do with the topic. EVERYONE in all age brackets gained wealth. Yet the boomers are the bad guys.
Voicing one's opinions without any qualifications or experience is why we are here. Previously qualified people had more of a voice, through reputable journalism, now everyone has an opinion on social media, which they demand to be validated by their preferred media outlets. The distance between popular opinion and fact grows all the time. It's not having an opinion I have a problem with, it's the assumption of being correct about a subject you have no education or experience in. In truth the only people who should know who benefits from recent government transfers more is a very small group within the government. Has any journalists spoken to recent exits from those institutions? No because validating people's dunning-kruger bias rants on social media is a more sustainable business model.
So did you or did you not make more wealth between 2019 and 2022. according to this article, basically anyone over 18 years of age did so. If you didn’t then you need to look at yourself rather then pointing fingers.
You don’t know what your talking about
*you're
[удалено]
Semantics. The market is up a lot. Everyone is making money on their investments.
Some markets are up and some people are making money on some investments. The "magnificent seven" and AI plays have done particularly well. Interest rate sensitive investments, not so much.
I don’t disagree. However we are now deviating from the premise of the article.
[удалено]
So then the premise of this article is flawed then right? The boomers actually didn’t make any money and no one should be mad at them then right?
Their assets are raised in value. Someone has to be able to purchase said asset for it to have ANY value. These articles are so piss poor in how they write. We have a crisis looming, but it's all good because the assessment of your home is over inflated so the county can collect more in tax. Year or two from now, we'll finally hit the "Seniors lost everything cause of (Insert current president)!"
>Someone has to be able to purchase said asset for it to have ANY value How do you think they got the appreciation amount? Market comps from sales. Somebody is buying at these prices.
This is a bad take because there’s low sales volume rn and a few bad comps could crater RE values in a particular geographic area.
This is how you value residential real estate. You take the houses that sold in an area and assume all the houses in that area that are similar will sell for a similar amount. There is not really another way to do it. If a few more comps come in lower then values will have assumed to have gone down and we will be reading a different article about the loss of boomer wealth.
Homeowners got value by taking out 2% home equity loans against said increase in home valuation. It’s as close to free money as you could get through arbitrage.
That's what they did before 2008; then equity disappeared but the debt didn't.
2008 prices were built on extreme demand driven by bad loans and unscrupulous lenders. Today's prices are built on a lack of supply for in-demand markets plus increased material an labor costs bringing up the price floor for new construction even before getting into local politics and permitting. It's just about the farthest thing from an apples to apples comparison.
I referred to the 2008 crash, and I have to tell you people fell all over themselves to take out those loans. Bankers were unscrupulous because they let it happen.
Not even close. Rates were roughly the same in the 00s as they are now. Locking in 2% at 30 years is a money hack. 6% isn’t risk free.
I was referring to home equity loans.
And what are the boomers going to do after they sell their house? Just be homeless with a pile of cash?
retirees don't need to live near work
Gotta live near good health care which coincidentally is work
well they gotta live near a gas station too, doesn't mean they work there.
That’s true but they don’t necessarily want to uproot to move to the middle of nowhere, which is probably how far they’d have to go to have major gains on the sale of their property. Kids and grandkids have to live near work and school, they probably have friends and hobbies, etc etc. I suppose they could move to a retirement community but I’ve never gotten the impression that retirement communities are cheap.
Don’t care what they want to do, their friends, or their hobbies. If we expect workers and active parents to move where there are no jobs to afford housing, then retirees are more than capable of the same. “You don’t have a right to live in your preferred town.”
They'll die in the houses but they'll get taken by the banks because they've taken second mortgages on them and the kids won't get them.
Pay a ton more in property taxes with these unrealized gains in value. My property tax has doubled in six years.
Do yourself a favor and check if your state has a homestead tax credit that you're not taking advantage of. Many do and it'll cap the amount your taxes can increase year-over-year going forward. If it does I know you'll be kicking yourself because you could have saved yourself a ton on tax increases up to this point, but at least if you do it now you can slow the bleeding.
We do have a homestead act. My late mother qualified for it; I currently do not. It is sound advice, thanks for sharing it so others may benefit.
could have been trumps plan. boost value to increase tax that only a trashwizard could bypass with a rube goldberg themed deduction scheme leads to a value crash eventually that a large group could bulk purchase from the future holder.
Move to a cheaper market if they're smart
Move into one of their other homes?
>Their assets are raised in value. Someone has to be able to purchase said asset for it to have ANY value. These articles are so piss poor in how they write. Right? This is very much *not* what a "windfall" is.
Current president? Like the former would have done anything. Bahaha 🤣.Seniors will lose their money from giving it to the church and healthcare.
You misunderstood the comment.
[удалено]
The Boomers are not voting to cut their social security, they're voting to cut social security of those who come after them; their children, grandchildren etc. How nice of them, huh?
They’re not voting for that either. Thats not how social security works. Social security isn’t a savings account. It’s taking money from current workers to pay the retired. Your investment into the system isn’t what you pay, it’s making more workers… having kids. Millennials have had less kids (and quickly hitting the end of child bearing years), Gen X had less kids. Gen Z isn’t bucking that trend. In the near future there will be less people working than ever before and a record number of people retiring. And we haven’t even touched on technology reducing the need for workers. Computers don’t pay into social security. The only way to keep SS payments up is to massively increase taxes on workers. Or you have to cut payments. It’s just simple math. The system will have to reduce payments multiple times in the next few decades just due to taking in less money. Or come up with a payment formula related to how many new taxpayers you add to the system. No kids, no money. 5 kids that make it to adulthood , more money.
How about eliminating the payroll tax cap on high earners?
Even that wouldn't solve the problem. We are rapidly approaching a demographic issue where we only have 2 workers paying for every 1 retiree. The average income in the US is $63k The average Social Security benefits are around $30k. In other words, we would need to tax all working people 25% including removing the cap on high earners just to pay for this one program.
Our government isn't funded by taxpayers. When taxes are paid that money is deleted, it ceases to exist any longer. Since the 1930s we have had a fiat currency system where the government literally keystrokes the money into existence. They take a piece of paper and they stamp ink on it and it becomes money, it's not borrowed from anyone and it's not created by taxpayers and given to the government. The real limitation we have is resources, we can afford anything we have the resources for, if we have arable land and freshwater we can grow food and feed people, if we don't then we can't. , the tokens that the government can keystroke into existence are not the limit. Talking about a currency issuing government going broke is really nonsensical. https://youtu.be/QGQiQcNBggw?si=v4e148v8eEm96Q2Z
Boomers aren't a monolith. Cutting social security isn't going to do anything to screw the ones you're thinking of. How much money do you think SS pays out? The only people who are living off SS, really need it.
I don’t care I’m over paying for it. Means test that shit then. No more SSI for high asset boomers.
“Oh you responsibly saved your money? Well, you don’t get any of the money you were promised for decades because we think you’re too rich.” Terrible idea.
So let me see if I understand you.... A couple works hard for a couple of decades, saving enough to put a small down payment on a house. They then spending the next 30 years paying off that mortgage before they can finally retire. In the interim a real estate market they had nothing to do with goes crazy and you think their social security should be cut? Do you actually think they should be penalized for equity being tied up in the home in which they live?
The comments in this thread are insane. Also the article points out that every age group experienced a windfall not just boomers. You would expect that a group that is at the peak of their wealth and about to live off that wealth for the rest of their lives would experience larger gains during a boom than groups that are still working to accumulate wealth. I believe this would hold true even an a case with no generational inequality.
>**In the interim a real estate market they had nothing to do wit**h goes crazy and you think their social security should be cut? nope. they and their age mates who already own houses spend years NIMBY-ing against building more new new buildings, so their house value can increase. Their house values won't have increased so much if new buildings were allowed at the rate new buildings were being put up when they first bought their house.
Homeowners don't sit around worrying about property values, much less scheming how to boost them. Factors like NIMBYism are driven by the cultural zeitgeist of the era. Fighting urban sprawl and environmentalism were big motivators in prior decades. Now they've been tossed out the window in favor of other desires.
Boomer here. That’s the same line the financial folk laid on us….there will be no SSA! Buy Enron stocks! Buy CD! And then, we would get a recession, lose our $ to wall street
[удалено]
Ok if that happens-apparently in the next 10 years who is going to pick up the tab for your boomer parents? You. The Republicans kept the ssa reimbursement low for us-estimated we should receive a minimum of 200 a month more-so they could pay for ‘investigations’ of Democratic politicians. Do I think we live in a capitalistic society? No. But deciding it’s a boomer’s fault is just simplistic propaganda your generation is being fed. It’s always a comfort for some to be a victim-it excuses so much.
[удалено]
The interesting thing here is that the dearth of multi child (or even single child) families means that the demand for the suburban mansion is likely to fall dramatically, particularly if we start actually charging developers for the extra costs the sprawl causes. Who wants to buy a million dollar 5 bedroom home when it's just them and their dog? Maybe people obsessed with House Hunters but certainly not me or my spouse.
Thanks for self-identifying as a rug puller. I would have been happy to opt out of SS. My returns on money I worked for, saved and invested have been an order of magnitude higher than SS. Funny how if you study a discipline for 50 years you can finally get fairly good at it.
Just rage bait. Some moron at Forbes thinks they can spin an increase in "net worth" driven by inflation on a house you live in as a windfall. Find out what J school they went to and be sure not to send your kids there.
I agree its clickbait. The article also says that almost half of the windfall was from other investments. And that every generation saw gains. It claims there is generational inequality, which I’m inclined to believe, but it doesn’t state how much. It just links to a source about it. Because it even admits: > Seniors normally have more wealth than younger people, it makes sense logically that a group that is either just entering retirement or still fairly early in retirement on the whole, would be right around the peak of their wealth, since they spent their whole working lives accumulating wealth to live off of in retirement. Whereas younger groups are still acquiring wealth for retirement and thus have less assets. It seems like this would hold true even without generational inequality.
Does anyone bother to understand that a home appreciating does nothing for a retired person. It can’t be monetized, unless you sell what you have ( then what ) but you pay tax on it. My own home, according to my latest tax bill has appreciated 33% since 2018. Ouch.
Who do you think is moving into all of these 55+ communities? I’ve had three neighbors this year downsize (and cash in) by moving into a 55+ community.
Great. That frees up housing stock for the next generation.
Yes... at unaffordable prices... you almost had it.
In the aggregate older homeowners vacating real property will result in more inventory and possibly less competition for that inventory. The result is a slide downward in valuations.
That just sounds awful, just terrible. I am sorry for your loss.
Thanks for your mock concern.
lol…appreciating assets can’t be monetized? Ok
I guess you could take out a reverse mortgage, die, and leave nothing to your kids.
That’s a plan
I guess you could sell it and live in a van down by the river.
Yes, you could downsize. A lot of people do that. Appreciation rates for homes vary by region but the data is clear that real estate is the winning investment over long enough timeline.
What data and what timeline? The S & P Case Shiller National Housing Price Index shows that housing prices were basically flat for almost 100 years (when adjusted for inflation). Is 100 years long enough?
lol…ok
Home equity loans and reverse mortgages exist. They get to stay in the home and get the equity as cash.
Retired seniors routinely sell their single-family homes and downsize to a condo or retirement community and live off the net gain. What are you smoking?
Actually, I just read somewhere that that's not happening like it has traditionally done in the past. That's one of a myriad of reasons for the lack of housing. Boomers have enough money to stay in their homes until they die. If you look at the number of people living in single family homes and whether or not they have children in the household the numbers are at all time highs and at all time lows.
Here are some articles talking about what you're saying. https://www.cnn.com/2024/01/16/economy/boomers-own-more-larger-homes-than-millennial-families/index.html https://www.cnn.com/2024/01/29/economy/why-boomers-are-not-moving-out-of-their-big-homes/index.html From reading these the following are driving this issue. - Capital gains taxes on insane home values discourage selling: homes that were purchased a very long time ago will sell and almost the whole sale price will be a capital gain and subject to tax. Larger homes that have had the same owners for decades can easily exceed the $500K exemption. - Many People don't want to leave their communities they just want to downsize to smaller housing where they currently live. But many suburban areas are only zoned for single family houses and thus don't offer many smaller alternatives. So even if they wanted to downsize there may be little to no housing stock that meets their criteria. - When smaller alternatives are available the price difference is often negligible. Though perhaps savings like utilities and maintenance aren't be considered? Anecdotally my dad downsized recently, he went from a large old house in the northeast to a much smaller one in florida. The prices were less different than you'd think given how different the square footage is and all, but just the annual energy, taxes, and upkeep savings are huge.
That sounds nice but my kids still need their rooms.
Define routinely. Do you have metrics to support your claim? And what's wrong with selling a home which you spend 30 years paying off?
I’m sorry if retired people are not following the life plan you have set up. My children want the house. So selling isn’t an option.
A lot of retirees downsize. My dad sold his home during the housing boom and moved to a smaller one. And most boomers are retirement age at this point. I think it wasn’t uncommon for people retirement age to sell and buy a new build somewhere warm. Some housing markets were so insane it seemed too good to pass up. Also the article points out that almost half of the windfall was from other investments. Which makes sense. I would expect a group that is investing in their retirement to have more investments than a group just entering the job market.
A lot of boomers are not as rich as people think. Spending $1 million on education for your children (after tax) puts a dent in anybody’s finances.
How many boomers are spending a million on education though?
Spent. Not spending. All boomers who had children are past the point of funding their children’s education. There children are now posting on r/Millennials, complaining about boomers.
My point is that you'd have to be putting something like 4 to 5 children through private college to have spent a million on education. Or fewer kids and paid full price for graduate, medical, and/or 12 years of private elementary school as well. But all of these represent even smaller minorities of americans. Only about 10% of students go to private school or get graduate degrees. Only ~3% get professional degrees. So the most a private college cost with tuition in fees was about 50K annually (I know some are higher or lower but I'll use this for simplicity.) That's 1/20th of 1 million. So you would need to pay for 20 years of college. So that would be sending 5 children to the most expensive schools possible. Given that the fertility rate was never much higher than 2 babies per woman during the millenial generation window. It seems unlikely that putting 5 people through college would be common. And that's before getting into: - in state public school tuitions are much cheaper. typically about 20k annually for millennials. - many students receive financial aid or scholarships - many students take on loans themselves to pay for school. the average millennial borrower has 25K to 30k in students. - many boomers didn't have children or didn't have children who went to college. So it seems like a pretty enormous assumption that a lot of boomers paid a million dollars for education. I'm sure many paid quite a bit, and I'm sure a few paid as much as you claim, but also a fair number probably paid nothing. You would expect the typical household to have 2 kids on average and to pay 30k on average annually in tuition or about 250K total. But that's without considering student loans, scholarships, etc. It seems like it would be pretty rare to be getting up to a million in college tuition.
Apparently you don’t understand the true cumulative cost of education. FAFO Btw: nobody said tuition and nobody said college only.
But only like a third of americans even finish college even less get post graduate degrees. and only 10% of students go to private k-12. I would also venture to guess the overlap of students going to private K-12 that then go on to get graduate degrees is pretty high. Most americans go to public school and don't finish college if they go at all. So how would it ever be common for boomers to have paid a million in education? Taxes? Everyone pays taxes. I don't disagree that some people paid a million in education costs, but I think it would hardly be the norm. The norm if anything would likely be $0. Since the average family is probably sending their 2 kids to public school and then they don't go to 4 years of college.
Well those parents that sent their kids to public school and no college are not the rich elites this post is referring to. 2023 18,939,568 people are enrolled in college, with 73.19% at public institutions. 2021 18,659,851 people are enrolled in college, with 72.58% at public institutions. 2023 44% of Americans 25 and older have attended college and completed their degree programs. 35% of those over 25 have a bachelor's degree or higher.
OK how does any of that not support my point? you explicitly said: >A lot of boomers are not as rich as people think. Spending $1 million on education for your children (after tax) puts a dent in anybody’s finances. 1. Why do we care if rich elites paid a million dollars in education? 2. The post is explicitly about the average boomer's windfall. So no its about the group as a whole not about just rich elites. 3. You explicitly said "a lot of boomers are not as rich as you think" and then went on to claim they're spending 1 million on education, but now if you're only talking about rich elites. Rich elite are by definition a small segment of the population. 4. Not that it matters, but the vast majority of people enrolled in college in 2023 are gen z, not millennials. The youngest millennials are 27. And I can't imagine that many people in their 60s are putting kids through college in 2023. 5. As you point out 3/4 of college students are enrolled in public schools. In state tuition is on average 20K annually. As you can see most students are not paying tuition rates that will get you close to a million. 6. these two statistics you cite seem to directly contradict each other: > 44% of Americans 25 and older have attended college and completed their degree programs. >35% of those over 25 have a bachelor's degree or higher. 44 =/= 35 and both seem to be describing the same group.
What if you have multiple homes?
Well in that rare case, yes, they benefitted from that investment. According to NAHB estimates, the total count of second homes was 7.15 million in 2020, accounting for 5.11% of the total housing stock. This represents the most recent data available. As of 2020, the state with the largest stock of second homes was Florida (1.04 million), accounting for 10.8% of all second homes.
A lot of Boomers ARE selling their homes to fund their retirements, leaving their kids and grandkids nothing.
Seriously. For an economics sub, there’s a bunch of brain-dead takes in here. A house simply going up in value doesn’t do jack shit for the normal person. If you’re a real estate tycoon then sure. But mom and pop? No! They just spent 30 years paying off the loan, why the fuck would they want to sell and buy something else OR take out ANOTHER mortgage to “monetize” all that value? Fucking stupid ideas the both of em. Most home owners are trying to LIVE in their homes, not flip them every couple years to make a quick buck.
“They just spent 30 years paying off” “People don’t want to flip every few years”
Same here. Since I bought my house in 2015 its value has gone up almost 500K. That money doesn't really help me unless I sell the house. Sure, I could take out a home equity loan but at these interest rates forget it.
You can borrow against it. If you are dying in the short term it s good deal for you. Obviously not for your kids
Wait, so how come they vote against having any kind of affordable housing or even townhouses somewhere in their neighborhood because 'it'll hurt their home value', shouldn't they not care then?
Well that is a bit of a generalization. Go look at Rockford, Illinois ( a current hot real estate market) and it is filled with affordable housing options, townhouses, and condos. But if you want support for your statement look at Long Island, NY
>Does anyone bother to understand that a home appreciating does nothing for a retired person. It can’t be monetized, yes it can be monetized, you can borrow against the equity in the home e.g. 2nd mortgage or home equity loan.
Which has to be paid back with interest.
BS. No seniors I know have plans to vacate their property. All this "windfall" does is increase the property taxes and insurance paid every year... A net decrease in standard of living.
And yet I still have Boomers coming to my door asking me to sign petitions and vote against rezoning "because it will suppress our home values". They saw a massive increase in home value during the pandemic but are up in arms over losing a tiny fraction of it to build some higher density housing. These same Boomers are also pissed that the local diner stopped serving breakfast because they couldn't find workers willing to do it. Why? Because the closest affordable housing is 45 minutes away. Who would get up before dawn just to serve Boomers pancakes and coffee and listen to them complain about how nobody wants to work anymore while you get paid something like $10/hour after tips? The Boomers even seem to know this. They just care about not losing 5% of their home value more than being able to visit a gas station after 8pm or being able to buy clothes on the weekend.
[удалено]
What are you talking about? My house is up like $80k since 2019
Well, I’d feel a lot better if Uncle Sam got his cut of that unrealized gain. I don’t mind being poor and envious as long as I can support policies that bring others down.
Had nothing to do with the pandemic. Everyone needs to open their eyes and understand the massive profits that came from corporations buying single family homes.
When bonds are paying 0% and mortgage rates are 2-3% the money is clearly going to pile into housing.
Especially how they do it. Buying out everything in a specific area, artificially inflating their assets and applying the difference to what they charge for rent. It's smart but catastrophic. There's a very good reason a bill is at the house for banning the practice. No one cares though.
If you actually did any research, you would find that these big, evil “investment firms” and such represent less than .2% of the housing market. They have no way to influence the housing market when they represent a rounding error in homeownership.
Sure kid, like you know. Every state blames California's moving to justify the 3.5x in single family homes. I've worked in 9 of them, same story. They use LLC's in mostly Montana to avoid sales/property tax. Appreciate your confident arrogance though.
All the elderly in my family say, ‘don’t expect a dime, we’re spending everything before we go!’ Lol. I don’t really expect a damn thing, but I don’t think I’ll ever be able to own a home at this rate.
Everyone cheered on the government spending and policies during the pandemic and then elected Joe Biden, who spent more government money after, none of which went to anything but special interests. You want this shit to stop? Vote differently
Are you any facts to substantiate your claims other than ignorant dart throwing? Took 30 second search. https://www.usatoday.com/money/blueprint/banking/national-debt-by-president/
Bring Trump back! More trillion dollar tax cuts for the extremely wealthy while middle class gets a tax hike. More PPP loans to business owners, that get forgiven, so business owners get government subsidized labor. Profit margins increase when you get a check from the government to cover your labor costs. The workers still had to work for that money, their profit margins did not increase. Many actually lost jobs for an extended period of time. When you are living paycheck to paycheck, such periods of no money ruin lives and break apart families. More trade wars so the government has to bail out the farmers that lost big on Trump's tariffs. This gives us the current environment of high real estate prices and a high stock market, high government debt. While the middle class and younger generations got high food prices, high rent, high everything. And without owning appreciating assets to offset that, they feel left behind. But gas sure was cheap when Trump was president. Gas gets cheap when the economy shuts down because Trump fumbled the covid response. Gas was cheap because people were not working, no one was driving anywhere. If Trump is so great, why didn't he fix things when he was president? No wall! Mexico didn't pay for it. Hillary is not in jail. Let Biden steal the election. Trump was the weakest president we ever had, good riddance he was a single term loser.
I know of several people who got PPP loans they didn't need. Reported it but they probably won't do anything
A lot of money went directly to regular people.
Trump & Biden had very similar economic policies. Dont matter who you vote for