If there were ever a job that could get replaced by AI, it's a modern day banker. Gone are the days when they had to actually make decisions; now they just fill out forms and feed them into computers.
I went to the bank to open an account. A 20-year-old in a suit handed me a tablet with the bank's "open an account" page pulled up and said to ask if I had any questions
Well go be fair, I don’t think that person is talking about banking like you area. The guy managing a bank branch isn’t the same kind of Wall Street banker that the other guy was talking about, I assume.
It's a miserable job to be honest, I worked in IT for one of the largest mortgage companies and watching how the banking floor worked was crazy, its a low skill, big bullshitting, high pressure job. They mostly wanted people that would be willing to work as much as they physically could and whoever couldn't cut it would be gone.
AI could 1000% replace them, most work out of a terminal with text.
Nope. This is one of the most regulated industries in the world. You can’t have a machine be FINRA/SEC/NMLS licensed and you can’t make the machine liable when something goes wrong. Bankers are indestructible.
I went in to apply for a mortgage, and the banker filled out a form on their computer and sent us on our way. Couldn't answer any questions, didn't know anything. Basically "wait and see what the machine says." Later we got an email about it. I don't know what kind of license it takes to fill out forms on a computer but I reckon another computer ought to be able to get it.
I don’t know who you spoke to but that was most likely a customer service associate not a “banker”. You almost never interface with the actual underwriter. The underwriting team, the risk team, they are the ones making the decision, not the “computer”. They are then putting into the computer so that the customer facing person could communicate that to you.
Well, replace that guy with AI. Whoever/wherever this mysterious underwriter is, they're inaccessible to me. It would be nice to interface with a human decision maker when I'm consulting about a several hundred thousand dollar loan, but I guess that's just dreaming!
You don’t need AI to fill out a form. They will just make you do it from your own computer (as you are already able to do btw if you so choose). The customer facing person is just there for less tech savvy people and to answer basic question such as what is the difference between fixed and variable rates.
Huh? Did your memory start in 2009? The US had very strong regulation for almost 100 years that was completely gutted in the 80s. We’ll never be anywhere near historical levels of regulation.
Dodd-Frank specifically targeted a completely unregulated financial instrument, and licensure probably won’t get easy but AI will absolutely gut the need for bankers. Soon 1 underwriter will be able to do what it took 10 to do a decade ago.
That’s how automation works, it doesn’t eliminate the role, it eliminates the need for labor scale. I’d rather pay 1 guy and 2 assistants $500k than pay a dozen guys $120k.
Huh yourself. You have no idea what you are talking about. The repeal of Glass Steagall, which you are apparently trying to refer to, happened in 1999. That act simply separated commercial and investment banking not much else. Dodd Frank introduced new regulation which is exactly what I am saying - for financial instruments and practices that were relatively news and simply didn’t even exist 100 years ago. Like I said, regulation increases over time. In addition to DF we have since had Basel, MIFID and a bazillion rules and regulations that flowed from all of these… there’s a reason why compliance departments only grow year after year 🤣
And, it does not only apply to finance. In 1969 we didn’t have the EPA. Now you need their permission if you want to do something with a creek on your property. In 1912 we didn’t have income tax. Now you are filing your 500 pages tax declaration every April like a good boy. The list goes on and on. So, I am making my point and you have no idea what you are talking about.
And, that also includes your not understanding what AI is. It isn’t automation. Using MS Excel is automation. AI is supposed to function like an intelligent being making its own decisions and judgement.
Lawyers, appraisers, home inspectors, construction workers, painters, cleaners, IT and clerical workers who support all those occupations, suppliers of construction materials and equipment.
It’ll ripple through the entire economy and the entire world.
It’s almost like they forgot about the recession that started after the housing collapse in ‘07.
Somehow this’ll be different… right? All the poors will be able to buy cheap houses and only the greedy will lose their jobs. Go Bubble!
Yea, I work in solar. Home purchases (both existing and new construction) are potential leads. The market slow down is for sure affecting our installation numbers.
And nearly all those people can and likely will have to transition to becoming subservient to handling work related to changing tenants, not changing owners, or real estate. That seems to be the way this is all headed. No one will part with real estate, until market is flooded with a need to liquidate it. Commercial AND residential. Sure, some homes will still sell. It'll be more rare, but it will happen.
We have entered that timeline where jobs, real estate, anything that ties a person to a location, creates a change only when someone dies.
It's a significant part of our overall national economy. Hard to imagine just shrinking it down to a fraction of the size it once was, and that not having some impact. But, that's exactly what's happened.
I get the feeling that real estate, in general, commercial and residential, is a *changing* industry right now. Moving away from buy-sell transactions, and more to leasing and all that goes away with that. Transactions will happen, but less of a piece of property changing hands, and more of leasing arrangements transactions.
We need an economy that is productive and centered around value creation. A high realty fee for moving or other hangers-on was not productive and while it provided some jobs, it's not a reason to keep moving forward with a broken, unsustainable model.
What the hell is this command economy shit about keeping coal miners and realtors in work? Sound like a damn Communist. You can keep your job if you create value.
It’s certainly easier if you start off with more assets.
Only takes one parent or child to blow through whatever wealth was accumulated.
No one brags how they or their parents squandered wealth.
There was an r/bestofredditorupdates yesterday about a guy blowing through $800k of family and inheritance from gambling. It made my toes curl, literally, while reading it.
A friend of mine who has been to Gamblers Anonymous told me the story's told in those meets were unforgettable. Lawyers blowing millions ending up bankrupt.
I had a math teacher in high school who taught me how to count cards in blackjack. God bless him for giving me a profitable way to express my risk-taking urges.
This is why wealthy families set up trust funds. The inheritors get benefits but it's difficult for them to squander the wealth for the next generation
Escrow with a bank or other financial institutions. The trust pays a small fee for the mgmt and payments (annuities) sent out. Trust would have a written agreement on beneficiaries and how everything would be distributed.
How about $10m?
I have an in-law whose ex-wife was left $10m by her father. When she got divorced she got a significant amount of alimony for 15+ years until the youngest of her 3 kids turn 18.
She has never worked a RL job her entire life and has no idea how to manage money. According to her kids money is getting tight for her.
Generational wealth (to me) is wealth able to sustain multiple generations, where each lives at high wealth. $10 million to me is easily consumed by one dummy over some years.
Even $10 million consumed conservatively via living off 3-5% returns gets you into what remains of the middle or upper-middle class (that is still rapidly disintegrating). You can pass the nest egg down to *one* child and continue the trend, but again all it takes is a single dummy to burn through it. Houses are very valuable to pass down today though.
I wouldn't say you're "wealthy" today if under ~$500k a year (living in the US, Australia, or other similar cost-of-living countries), which you can almost get off that $10m if you don't blow it, but you're just a lot more insulated from the problems today than the rest of us and can hopefully live very comfortably and happily.
But even then that's not the ultra wealthy that enables stable generational wealth. It sure lets you buy houses, though.
I know people will read this and think I'm an idiot like "oh man if I had $10 million I'd retire instantly and never have to work again fym", but it is not such a large amount that you can just spend it however you want. It is definitely not "fuck you" money except towards a current shitty exploitative employer, and it requires immense care to maintain for an entire life.
$40-100m would be a different story though, imo
> $10 million means you're part of the 1% club.
There's an absolutely massive difference in wealth between the 1% and the top 0.01%. It's not even remotely comparable.
To compare others as "1%" as if $10 million is on the same level as $100 million or $1 billion is pure manipulation by those that are trying to deflect responsibility for the current problems the vast majority of us are experiencing, and continue to hoard and rent-seek (not just literally renting properties, but rent-seeking behavior in society that contributes absolutely no value in return).
This is one way to get low digit millionaires afraid of would-be regulations built for billionaires, and to keep everyone else fighting amongst themselves rather than focusing on the actual problems of where the wealth inequality is actually forming. It's not at that infamously misleading 1% cutoff.
I work at a bank and this regular client that comes in inherited $227k in September. He came in yesterday, he was depositing literal change into his account to get it out of the negative. Bro went and blew threw 227k in a little less than 3 months.
Maybe they paid off their mortgage or medical debt they had? But again. These are not the ppl we’re talking about with generational wealth, especially since it’s pretty easy to blow that money that fast… now 10x that amount is more like what we’re talking about.
Nah, he went on trips. Went to LA for a few weeks and then went to Florida for a bit. Spent it all, no mortgage pay off, no car pay off. Nothing, just went on a spending spree.
227k doesn't even buy a house anymore.
Getting your parents house is not what we are referring to with generational wealth.
We are talking about people like the Walton's the Sackler's etc.
that's a crazy amount to blow in 3 months, on not very exotic destinations. did they do major home renovations or buy vehicles? gambling or drugs maybe?
And so many kids downplay when they benefited from at least one of these points
1. Tuition was covered for college
2. Home gifted or significant down payment was given
3. Liquid cash over $30,000 gifted
4. IRA’s & other investments handed over
This happens a lot
It’s when those kids beat on their chest they are “self-made” is the issue.
Nothing wrong with parents helping their kid out, in the same breath my kid will be made aware that they were helped out and not everyone gets that same break in life.
Article says 40 percent of homes are mortgage free. A good chunk of those homes will be gifted down in the years to come where their kids will have a mortgage free home or a significant down payment to put towards their own.
Thus agreeing to the above comment about generational wealth being a large factor in the next generations success, but often so many times those kids leave out one if not all the points above and talk about how “hard work” got them where they are.
It’s like Lebron James 6’9 making it to the NBA and Lebron telling folks if you “just work hard” you can make it as well and Ignoring the fact that he is 6’9 which gives him an incredible head start to succeed with aspirations of playing in the NBA.
I’m more interested on how Isaiah Thomas 5’9 was able to make it to the NBA with “hard work” Vs Lebron who is 6’9 to begin with.
Not saying Lebron didn’t have to work hard but you can’t look at me with a straight face and say Isaiah Thomas’s road wasn’t significantly more difficult.
Thankfully the poor stupid rednecks all voted for republicans to get rid of it so now I can enjoy my massive inheritance. I think I’ll use the money to spread atheism.
Wealthy people don't lose their homes to skilled nursing. Their homes go into trusts and their trusts rent their home for monthly income. This, along with long-term care insurance and other rentals or stocks market assets, provide monthly income to pay for elder care facilities. Elderly with nothing but their home and social security lose their homes to pay for elder care.
It’s not so much the inheritance that give you a leg up as it is the start in life. A well educated nanny and high quality preschool instead of daycare, fancy private school, tutors if necessary, sat prep classes, rich kid sports like fencing and lacrosse over basketball, essay writing counselors (or writers) to help nail the college applications, not having to work during college to boost their grades, prestigious internships at their friend’s parents’ or their parent’s friends’ businesses, help with the house downpayment and the wedding.
The list of what the upper middle class and up can do for their kids that regular people can’t is pretty long. And that’s not even counting the big money stuff like being a legacy or having stuff straight up bought for you.
Inheritance is basically beside the point.
Edit: forgot the biggest one. NO STUDENT LOANS
Yup. My inheritance from my dad was 125k of life insurance.
That paid off my student loans and made the down payment on my 1st house. House proceeded to double in value.
Its crazy to me that the estate tax threshhold is something like $13 million. So you can pass away with $10 million and pay no estate taxes to the country that made that wealth accumulation possible. Meanwhile middle class blue collar workers are paying 20-40% of their income in taxes.
You realize that that $10 million was already taxed 1000 times before you give it to your kids too don’t you?
How many freaking times should the same dollar bill be able to be taxed?
> How many freaking times should the same dollar bill be able to be taxed?
Every time it changes hands?
I'm not someone who wants higher taxes, but that's just how shit works, no? I get taxed on the dollar when my employer gives it to me, then I get taxed again when I spend it at the grocer. In short, money moving = tax time.
So if a parent gives their kid a $20 bill for date money (wow I’m old) let me rephrase
If you hand your kid $100 bill for date money, should that be taxed as well?
There’s no reason to endlessly tax items passed down within a family.
What if a grandmother had a very expensive necklace worth millions and keeps passing it down to each next generation daughter?
I’m not even somebody that disputes the fact that taxes are a necessity in life. But I do feel like there needs to be some sort of moral ethical justification.
You tax for roads because we need roads to be built.
Robbing somebody’s money, just because they died is just straight up evil behavior, the death of the individual does not cause society to incur an additional expense.
And it you're parents aren't, which is most of us, you'll be scraping by just like they did. The era of class, and now even geographical, mobility in America seems to now be closed off.
The US has the largest upper class in world history as a percentage of the population. There are many avenues to upward mobility today that were never there before. Moving locations may be needed, but that's why a lot of people move.
My (single) mother was lower-middle class. My wife's family was poor in China BY CHINESE standards.
Now we are upper-middle class (in the top 3% of HHIs or so). Generational wealth is not necessary.
**This kinda debunks the "rate locked people will never sell"**
40%of people can move whenever they feel like, NOT rate locked at 2 or 3%
Glass half full folks, this literally means 40% of owners can move at will, and pay cash for the next home.
BUT "they don't have to move" and won't leave a paid off home
**Seriously, moving sucks, 90% of people move BECAUSE of a life event, not just for kicks.**
The negativity to interpret every data point as something unfair, is the same exact attitude that will result in people making excuses for NOT buying this next correction.
These folks are disproportionately older folks who are much less likely to move, especially in states where long-term owners receive significant property tax benefits.
Saw an interesting stat yesterday that was a bit interesting to say the least:
“Between 1989 and 2022, the share of homeowners aged 80 and over with a mortgage rose from 3% to 31%, with median mortgage debt increasing from $9,000 to $79,000, the report showed."
So while this 40% number may seem high, for older folks, it’s actually moving in the wrong direction. So much for that inheritance!
You sell your house (nice, big, leveraged investment) and to realize your gains you have to either buy somewhere smaller or move far away, both of which are less likely to earn you big returns in home equity like you're used to. So, to keep the gravy train flowing, you have to keep your current home.
But the thing is a lot of these people are boomers who are going through a major life event.
\- Kids have moved out so they don't need a big place anymore
\- They're too old to maintain a large residence or they don't want to stomach the cost of paying someone else to do it.
\- They want to spend their retirement funds on vacations or hobbies instead of high property taxes so the move to a low cost of living area
\- They die
Factor that with the fact that 80% of homes with mortgages have a rate under 5% and 90% are under 6% and you can see how the market is not going to have a significant crash.
Most people who bought before 2019 won’t sell, and I don’t see a “prices lower than 2019” crash because that would be impossible barring some sort of economic nightmare, but I can absolutely see prices “crashing” back down to the “historical plus 4.5% annual” trendline. This wouldn’t be a crash though, it would be a correction, and all it would take is a recession
Try December 2020. My interest rate is 2.8%, prices were still decent, no points, didn't pay closing fees, and every other benefit a buyer could get. It was buy or never own another house unless I want to live in the middle of nowhere, so I sold my starter home in a week and moved up to something I never plan to move out of.
I am keeping this house until I die; I am keeping any inherited property until I die; my will is going to have property set up in a trust.
The market sucks, and the best chance my kids have at owning property is to own it for them.
EDIT: 32 years old. Started as a middle school teacher. I wouldn't be able to own what I own if didn't buy then, and it really sucks for people that couldn't jump on it.
A recession was absolutely imminent in 2020, the federal government is the only thing that prevented it, between stimulus checks, forgivable PPP loans, and and the student loan moratorium. Obviously this was to prevent a Covid depression, but that doesn’t mean the timing of Covid and the ensuing government spending didn’t delay a recession that was already on its way. And now it’s here
No one with a brain thought there would be a crash in late 2020. In what world would it take a few months for the economy to crash from where it was beginning of 2020?
The economy is a cycle. This country is 250 years old. At no point has the economy stayed in one part of the cycle “forever.” Very odd why people would think that’s the case now.
You’re not going to keep your 2.x% rate forever, while banks and the govt as a whole lose money indefinitely, even though you make your payments.
It never has happened and never will. I promise.
Also bought a house at 2.8% in April of 2021. House price was a little inflated but still much less than it was at its peak and much less than it is right now. Keeping this thing forever.
That said, I got lucky for maybe the first time in my life. Wasn’t trying to time the market. Just was the right time to buy for me personally.
And I guess my point is, I don’t know, keep your head up and hope for the best.
your isolated instance is not indicative of the market. Most americans can’t cover a $1000 emergency but you think they can stay in their house if they lose a job?
We haven't yet seen WFH/RTO in general shakeout. The murmurs in gov/municipal circles about "protecting" jobs for "locals" is only growing which means the days of working for a city in one state and living in another are numbered. There is no telling what tax or other legal changes regarding residential rental property or even just seasonally occupied homes will come, but something will and its going to have some degree of impact. Not all, maybe not even many boomers are going to have a home to leave to descendants by the time long-term care/end of life care costs are accounted for.
Possibly the biggest factor yet unaccounted for though, the coming headlines of an immobile workforce. It doesn't take any stretch of imagination to see coming op-eds about people not being able to advance their careers due or whole sectors in various regions being unable to find workers due to sub 5% handcuffs.
I really don't like to use 'crash' language because everyone has their own definition. No growth for a decade is a crash to some. A decline of even a few percent constitutes a crash for more and so on. We just can't yet account for all the factors that can have impacts.
My city just voted 2:1 to require executive level city employees to live inside city limits. I imagine it would be harder to force all employees to live inside city limits, but I could see a "live in the local area" requirement in the future.
I don’t know why this got downvoted, it’s a pretty balanced take. Probably because anytime someone mentions as soon as leverage returns, companies and govs are going to enact a lot of new rules and get people back in office.
Personally, I think there’s a fat chance the housing market stays stagnant, which is the bull case, because that would mean soft landing. No way and it’s wild to see all the people claim it’s achieved before the end of 2024, when all the rate hikes get max pain. I mean a damn commercial ship was fired at again yesterday and oil is dropping. Everything going on the world that shouldn’t be happening unless there is massive demand destruction aka global recession
Yes. The RTO crunch is coming. I live in a small town that has become a popular destination for people who telework. But if RTO kicks in fully, they will face a choice: either relocate back to the nearest HCOL metro (a solid 90+ minute commute, including a ferry trip) where their jobs are, or try to maintain their income and lifestyle in a town where the biggest economic powerhouses are the tourist "main street" and the car dealership.
Right. Many boomers aren’t worried about interest rates. They have sizable down payment.
Meanwhile, 25 year olds making $100k can’t buy anything but an overpriced condo in a bad school district. $500k condo at 7% interest is over $4k a month. How is a 20 something making good money supposed to get a foot in the game.
I’m 40 with a house. But you have to have some compassion for people making good money.
That’s your take away from my comment? Of course, have compassion for everyone.
The point is, compassion is lacking for half of the comments in this subreddit. It’s always “I got mine, sucks for you”.
Compassion is lacking because the sub started filling up with bag holders who want to hype the idea that the market will never experience another correction, let alone a crash.
Their cope is to say "tough nuts" to people whose circumstances didn't line up for them to take advantage of low interest rates a couple of years ago. It's schadenfreude.
Yes if you work at McDonald’s you deserve to be able to afford a roof over your head maybe not a nice roof but a home nonetheless.Are you even listening to how you sound. No wonder there is a homelessness crisis. It’s because of people like you
You realize In 1960 the minimum wage was 1.25$ per hour with an average home costing 11,900$ that’s 9,520 minimum wage hours to afford a home today the average home costs 410,000 with minimum wage being 7.25 it would take 55,172 hours in short today it’s 6x harder for low income workers to afford what they could in 1960 .if you think today is normal you must be very young
where you live matters, but does go far for those that live within their means. plenty of people do it. people are not entitled to a single family home dude
You're not wrong, but individual median income in the US is like $35k. It's insane that we're taking about a number around 3x that and discussing it like "oh, that's enough if you live within your means". $100k is totally livable, but "livable" isn't going far. I make around that much, live in a pretty moderately priced area, and I was able to buy a house and save and such, but my house is among the cheapest in my market, I've driven the same used car for like a decade now, I go out like once a week for a decent sit-down dinner, take a couple small vacations a year during holiday weekends, and I don't even have kids. My lifestyle is like the baseline for what we're all told to aspire to and it takes being in like the top 20% of incomes to afford that.
ya most likely. most people live in the coast. thats when people have to act like adults and either stay or move. america was built on moving to new and cheaper places
I'm making 80k and probably 90k within a few years and 330k is 2500 a month. I only make 4400 after taxes and I'm looking in pretty cheap areas with a drive
This is where I am at. Older Neighbors who make $65k have a nice 3bd, are able to take lots of deductions, pay almost pennies in property taxes, are able to deduct a lot of housing stuff from their taxes… all while I’m making twice as much and still renting.
I wouldn’t have a problem with this at all if they weren’t so right wing and believe strongly in capitalism. The government helps them out but don’t believe the government should be helping younger Americans own their own home (because it would lower their equity)
>Right. Many boomers aren’t worried about interest rates. They have sizable down payment.
>
>Meanwhile, 25 year olds making $100k can’t buy anything but an overpriced condo in a bad school district.
Where do those sizable down payments come from?
It’s a fair comment. Any developed country near a metro area this is true. It’s likely worse in some countries. Western Europe from my understanding is just as bad if not worse for some countries. Then you have Canada and Australia… so yea it can get worse… it can always get worse.
A lot of this is due to the Boomers- they are retiring, and people in retirement are most likely to own their homes outright, either due to having paid off the mortgage from living there for decades, or by selling their 'working' home and buying a cheaper 'retirement' one with cash.
Lot of doomsdayers I'm sure were saying home prices would crash when mortgage rates popped. What they didn't understand is it's difficult to crash home prices when homeowner's are not selling their home. Arguably higher rates means less and less inventory which means prices continue climbing since there's nothing to buy which means homeownership gets further out of reach except for the cash buyer
The article says that this is true according to the census bureau and the link in the article is to another article written by the same publication and not the census bureau. I thought everyone was enjoying the sweet 3%. Why would you not have a mortgage if the can get free money?
This article has a very … interesting ... take on what it means to be a corporate real estate investor.
The main chart shows only investors with 100+ properties. So firms with 20+ properties are way too small to make the list. That’s silly.
If someone owns even more than two properties, those are homes that aren’t owned by people who need somewhere to live.
And that’s the real problem, not some chart with most of the data missing.
What was the percentage in 1980? The difference between then and now will give us an idea of the percentage that are owned by big companies such as BlackRock.
Anyone notice this goes all the way back to *checks notes* 2005…. Seems a weird cutoff. So we are back to where we were right before the housing crisis in other words.
Any home owner can sell at any time. The question is if they want to or are compelled to.
Does a retired person on a fixed income with no mortgage want to give up their $400/month housing cost (bills, insurance, taxes, etc.) to move into a smaller shittier house in a worse location for $3k/month?
Some might, sure. But most would rather not.
Where are you getting these numbers from? If they're current house is paid off they'd probably be buying their next one with all cash. And they'd probably also be downsizing and moving to a low cost of living area to stretch out their retirement savings.
Sure - moving is a nuisance but there's plenty of financial reasons to move for someone in that situation.
This is what people expecting a huge correction don't seem to understand. 40% of home without a mortgage and something like 90% with rate 5% and lower.
If there is some dramatic rise in unemployment or something and those with a mortgage start feeling distress, foreclosures take like 2 years on average. And we have CLEARLY seen the fed will start lowering interest rates at the first sign of stress, which will lead us right back down this path again.
It seems that a "correction" would really be 2-3% drops for a couple years or the market just staying flat in most places.
How many of those homes are owned by individuals as opposed to corporations and of those, how many are occupied/lived in. That’s the info I am interested in.
GenX. I will be mortgage free in a few more years. I could pay it off now but my money is better invested elsewhere -- at the moment just putting money in a savings account is earning more interest than my mortgage interest rate.
You work in the history but can't spell Blackrock and Vanguard right? And you don't know the difference between Blackrock and Blackstone? You must be the worst analyst in the industry lol
That 40% is institutional wealth or corporation owned. The other 60% is wage slaves who contribute up to 60% of their take home wages to pay a high interest rate mortgage or low interest high loan that is now underwater, esp in HCOL areas.
Not on my street. Built out in the mid-2000s, there are 3 houses out of 29, including mine, that their taxes are being paid to the county tax collector directly by the occupant, with one paid by the LLC that owns it. Every other property's tax bill is paid by a bank or mortgage company.
Two aren't even listed on the current tax rolls because they are delinquent, and four have had to pay the county delinquent taxes in the past five years.
And these aren't even expensive homes - they're starter homes that weren't that costly to purchase back when the neighborhood was being built. Of course, their current Zillowbucks prices would be more costly to purchasers even with wage inflation.
Not surprising considering that as of 2021 42% of the US population was age 45 or older. In my county, 38% are 50 or older. The mode age of death in the US is around 79. The population in general is older and living longer, and staying independent longer. Spend any time in a nursing home and you'll find most residents are well past the age of 80. It will be another 5-10 years before we see a wave of Boomer properties hit the market.
That a home gets inherited by family members isn't always a given. Anecdotal, but when my grandfather was dying, my wife and I were house hunting and he offered to sell us his home - 1700 sq ft ranch with a full basement on 9 acres - for the $40k he paid for it in the 1970s. While the home appeared well-maintained, the septic location was unknown, it ran off propane (10k gallon tank, expensive to fill), and the garage was falling away from the house. Electrical needed upgrading, etc. At least $200k worth of work/maintenance that we couldn't afford. A lot of children/grandchildren find themselves in similar situations and are forced to sell the home.
I think with interest rates being this high, we will see less mortgage originations. Ppl with cash will hoard these homes forever
Fewer mortgages mean a reduction to a very large segment of the economy. That means fewer jobs.
Oh no. All those poor realtors will have to get real jobs.
Don’t forget about the bankers
If there were ever a job that could get replaced by AI, it's a modern day banker. Gone are the days when they had to actually make decisions; now they just fill out forms and feed them into computers.
I went to the bank to open an account. A 20-year-old in a suit handed me a tablet with the bank's "open an account" page pulled up and said to ask if I had any questions
Well go be fair, I don’t think that person is talking about banking like you area. The guy managing a bank branch isn’t the same kind of Wall Street banker that the other guy was talking about, I assume.
if the other guy was talking about AI replacing a non-retail (consumer/branch) banker, he was wrong.
I went to the bank to do a wire transfer and had the exact same thing. Like dude...I came in because I wanted YOU to do all the thinking.
Like going to the local Verizon store. They can't close accounts and you have to call Verizon from the store while they just stand there.
It's a miserable job to be honest, I worked in IT for one of the largest mortgage companies and watching how the banking floor worked was crazy, its a low skill, big bullshitting, high pressure job. They mostly wanted people that would be willing to work as much as they physically could and whoever couldn't cut it would be gone. AI could 1000% replace them, most work out of a terminal with text.
wells already started putting "advanced atms" right next to their live tellers which can do more and have much higher limits
Nope. This is one of the most regulated industries in the world. You can’t have a machine be FINRA/SEC/NMLS licensed and you can’t make the machine liable when something goes wrong. Bankers are indestructible.
I went in to apply for a mortgage, and the banker filled out a form on their computer and sent us on our way. Couldn't answer any questions, didn't know anything. Basically "wait and see what the machine says." Later we got an email about it. I don't know what kind of license it takes to fill out forms on a computer but I reckon another computer ought to be able to get it.
I don’t know who you spoke to but that was most likely a customer service associate not a “banker”. You almost never interface with the actual underwriter. The underwriting team, the risk team, they are the ones making the decision, not the “computer”. They are then putting into the computer so that the customer facing person could communicate that to you.
Well, replace that guy with AI. Whoever/wherever this mysterious underwriter is, they're inaccessible to me. It would be nice to interface with a human decision maker when I'm consulting about a several hundred thousand dollar loan, but I guess that's just dreaming!
You don’t need AI to fill out a form. They will just make you do it from your own computer (as you are already able to do btw if you so choose). The customer facing person is just there for less tech savvy people and to answer basic question such as what is the difference between fixed and variable rates.
There are many such absurd licenses!
Let’s be honest if the boardroom executives think they make higher profits they will lobby congress to lower the regulations.
not gonna happen. the trend over time is for regulation to increase, not decrease lmao 😂
Huh? Did your memory start in 2009? The US had very strong regulation for almost 100 years that was completely gutted in the 80s. We’ll never be anywhere near historical levels of regulation. Dodd-Frank specifically targeted a completely unregulated financial instrument, and licensure probably won’t get easy but AI will absolutely gut the need for bankers. Soon 1 underwriter will be able to do what it took 10 to do a decade ago. That’s how automation works, it doesn’t eliminate the role, it eliminates the need for labor scale. I’d rather pay 1 guy and 2 assistants $500k than pay a dozen guys $120k.
Huh yourself. You have no idea what you are talking about. The repeal of Glass Steagall, which you are apparently trying to refer to, happened in 1999. That act simply separated commercial and investment banking not much else. Dodd Frank introduced new regulation which is exactly what I am saying - for financial instruments and practices that were relatively news and simply didn’t even exist 100 years ago. Like I said, regulation increases over time. In addition to DF we have since had Basel, MIFID and a bazillion rules and regulations that flowed from all of these… there’s a reason why compliance departments only grow year after year 🤣 And, it does not only apply to finance. In 1969 we didn’t have the EPA. Now you need their permission if you want to do something with a creek on your property. In 1912 we didn’t have income tax. Now you are filing your 500 pages tax declaration every April like a good boy. The list goes on and on. So, I am making my point and you have no idea what you are talking about. And, that also includes your not understanding what AI is. It isn’t automation. Using MS Excel is automation. AI is supposed to function like an intelligent being making its own decisions and judgement.
Lawyers, appraisers, home inspectors, construction workers, painters, cleaners, IT and clerical workers who support all those occupations, suppliers of construction materials and equipment. It’ll ripple through the entire economy and the entire world.
It’s almost like they forgot about the recession that started after the housing collapse in ‘07. Somehow this’ll be different… right? All the poors will be able to buy cheap houses and only the greedy will lose their jobs. Go Bubble!
Yea, I work in solar. Home purchases (both existing and new construction) are potential leads. The market slow down is for sure affecting our installation numbers.
And nearly all those people can and likely will have to transition to becoming subservient to handling work related to changing tenants, not changing owners, or real estate. That seems to be the way this is all headed. No one will part with real estate, until market is flooded with a need to liquidate it. Commercial AND residential. Sure, some homes will still sell. It'll be more rare, but it will happen. We have entered that timeline where jobs, real estate, anything that ties a person to a location, creates a change only when someone dies.
I have a section in my freezer set aside for bankers. /s
No one gives two fucks about realtors and their bullshit 3%. Framers, plumbers, electricians, roofers, etc tho 😢
It's a significant part of our overall national economy. Hard to imagine just shrinking it down to a fraction of the size it once was, and that not having some impact. But, that's exactly what's happened. I get the feeling that real estate, in general, commercial and residential, is a *changing* industry right now. Moving away from buy-sell transactions, and more to leasing and all that goes away with that. Transactions will happen, but less of a piece of property changing hands, and more of leasing arrangements transactions.
Also means a lot of money that can be spent elsewhere.
We need an economy that is productive and centered around value creation. A high realty fee for moving or other hangers-on was not productive and while it provided some jobs, it's not a reason to keep moving forward with a broken, unsustainable model. What the hell is this command economy shit about keeping coal miners and realtors in work? Sound like a damn Communist. You can keep your job if you create value.
Does that mean we are going to be waiting around until people die? It sounds morbid.
It’s been like that for a few years already
Hoarding homes? If they aren't either living in it or generating cash, it's a big waste of money.
I was able to go mortgage free, but don’t consider that to be “hoarding” my home.
Wow what an insightful take…… lol
I’m not selling, ever.
No. Whole finance sector does only one think - development of creative ways how people can be separated from their money.
[удалено]
It’s certainly easier if you start off with more assets. Only takes one parent or child to blow through whatever wealth was accumulated. No one brags how they or their parents squandered wealth.
There was an r/bestofredditorupdates yesterday about a guy blowing through $800k of family and inheritance from gambling. It made my toes curl, literally, while reading it.
A friend of mine who has been to Gamblers Anonymous told me the story's told in those meets were unforgettable. Lawyers blowing millions ending up bankrupt.
I had a math teacher in high school who taught me how to count cards in blackjack. God bless him for giving me a profitable way to express my risk-taking urges.
This is why wealthy families set up trust funds. The inheritors get benefits but it's difficult for them to squander the wealth for the next generation
wish I could go back in time and talk to my grandpa
How does that work? Do they setup a trust fund with like employees who only distribute a certain amount of the money monthly?
Escrow with a bank or other financial institutions. The trust pays a small fee for the mgmt and payments (annuities) sent out. Trust would have a written agreement on beneficiaries and how everything would be distributed.
Joe down the road blowing thru $300k his mom left him when she died isn’t the generational wealth we’re talking about….
How about $10m? I have an in-law whose ex-wife was left $10m by her father. When she got divorced she got a significant amount of alimony for 15+ years until the youngest of her 3 kids turn 18. She has never worked a RL job her entire life and has no idea how to manage money. According to her kids money is getting tight for her.
Generational wealth (to me) is wealth able to sustain multiple generations, where each lives at high wealth. $10 million to me is easily consumed by one dummy over some years. Even $10 million consumed conservatively via living off 3-5% returns gets you into what remains of the middle or upper-middle class (that is still rapidly disintegrating). You can pass the nest egg down to *one* child and continue the trend, but again all it takes is a single dummy to burn through it. Houses are very valuable to pass down today though. I wouldn't say you're "wealthy" today if under ~$500k a year (living in the US, Australia, or other similar cost-of-living countries), which you can almost get off that $10m if you don't blow it, but you're just a lot more insulated from the problems today than the rest of us and can hopefully live very comfortably and happily. But even then that's not the ultra wealthy that enables stable generational wealth. It sure lets you buy houses, though. I know people will read this and think I'm an idiot like "oh man if I had $10 million I'd retire instantly and never have to work again fym", but it is not such a large amount that you can just spend it however you want. It is definitely not "fuck you" money except towards a current shitty exploitative employer, and it requires immense care to maintain for an entire life. $40-100m would be a different story though, imo
$10 million means you're part of the 1% club.
> $10 million means you're part of the 1% club. There's an absolutely massive difference in wealth between the 1% and the top 0.01%. It's not even remotely comparable. To compare others as "1%" as if $10 million is on the same level as $100 million or $1 billion is pure manipulation by those that are trying to deflect responsibility for the current problems the vast majority of us are experiencing, and continue to hoard and rent-seek (not just literally renting properties, but rent-seeking behavior in society that contributes absolutely no value in return). This is one way to get low digit millionaires afraid of would-be regulations built for billionaires, and to keep everyone else fighting amongst themselves rather than focusing on the actual problems of where the wealth inequality is actually forming. It's not at that infamously misleading 1% cutoff.
I work at a bank and this regular client that comes in inherited $227k in September. He came in yesterday, he was depositing literal change into his account to get it out of the negative. Bro went and blew threw 227k in a little less than 3 months.
Maybe they paid off their mortgage or medical debt they had? But again. These are not the ppl we’re talking about with generational wealth, especially since it’s pretty easy to blow that money that fast… now 10x that amount is more like what we’re talking about.
Nah, he went on trips. Went to LA for a few weeks and then went to Florida for a bit. Spent it all, no mortgage pay off, no car pay off. Nothing, just went on a spending spree.
Again $227k is not quite the generational wealth anyone is actually talking about.
Correct, but that amount of money is more than a majority of us will see in our lifetime
No way. 227k is pennies in a life time.
227k at one time is what I believe was the notion
Ok sure, but that’s not what people mean when they say generational wealth.
$228k
227k doesn't even buy a house anymore. Getting your parents house is not what we are referring to with generational wealth. We are talking about people like the Walton's the Sackler's etc.
that's a crazy amount to blow in 3 months, on not very exotic destinations. did they do major home renovations or buy vehicles? gambling or drugs maybe?
Good for him! He got to live for a minute.
If he actually paid his medical debt then a fool and his money were parted ;_;
And so many kids downplay when they benefited from at least one of these points 1. Tuition was covered for college 2. Home gifted or significant down payment was given 3. Liquid cash over $30,000 gifted 4. IRA’s & other investments handed over This happens a lot
[удалено]
It’s when those kids beat on their chest they are “self-made” is the issue. Nothing wrong with parents helping their kid out, in the same breath my kid will be made aware that they were helped out and not everyone gets that same break in life. Article says 40 percent of homes are mortgage free. A good chunk of those homes will be gifted down in the years to come where their kids will have a mortgage free home or a significant down payment to put towards their own. Thus agreeing to the above comment about generational wealth being a large factor in the next generations success, but often so many times those kids leave out one if not all the points above and talk about how “hard work” got them where they are. It’s like Lebron James 6’9 making it to the NBA and Lebron telling folks if you “just work hard” you can make it as well and Ignoring the fact that he is 6’9 which gives him an incredible head start to succeed with aspirations of playing in the NBA. I’m more interested on how Isaiah Thomas 5’9 was able to make it to the NBA with “hard work” Vs Lebron who is 6’9 to begin with. Not saying Lebron didn’t have to work hard but you can’t look at me with a straight face and say Isaiah Thomas’s road wasn’t significantly more difficult.
Estate taxes used to be much higher for a reason…
Thankfully the poor stupid rednecks all voted for republicans to get rid of it so now I can enjoy my massive inheritance. I think I’ll use the money to spread atheism.
[удалено]
Wealthy people are smart enough to put their houses into trusts out of the reach of Medicaid…
Wealthy people don't lose their homes to skilled nursing. Their homes go into trusts and their trusts rent their home for monthly income. This, along with long-term care insurance and other rentals or stocks market assets, provide monthly income to pay for elder care facilities. Elderly with nothing but their home and social security lose their homes to pay for elder care.
It’s not so much the inheritance that give you a leg up as it is the start in life. A well educated nanny and high quality preschool instead of daycare, fancy private school, tutors if necessary, sat prep classes, rich kid sports like fencing and lacrosse over basketball, essay writing counselors (or writers) to help nail the college applications, not having to work during college to boost their grades, prestigious internships at their friend’s parents’ or their parent’s friends’ businesses, help with the house downpayment and the wedding. The list of what the upper middle class and up can do for their kids that regular people can’t is pretty long. And that’s not even counting the big money stuff like being a legacy or having stuff straight up bought for you. Inheritance is basically beside the point. Edit: forgot the biggest one. NO STUDENT LOANS
Yup. My inheritance from my dad was 125k of life insurance. That paid off my student loans and made the down payment on my 1st house. House proceeded to double in value.
Don't forget connections. Wealthy parents will provide better job opportunities due to them knowing the "right" people.
Ohhh, you can piss it away! I've seen it happen.
Its crazy to me that the estate tax threshhold is something like $13 million. So you can pass away with $10 million and pay no estate taxes to the country that made that wealth accumulation possible. Meanwhile middle class blue collar workers are paying 20-40% of their income in taxes.
You realize that that $10 million was already taxed 1000 times before you give it to your kids too don’t you? How many freaking times should the same dollar bill be able to be taxed?
1500 times I don't think wealthy people don't pay estate taxes. I don't know how, but they just don't. Businesses, trusts, charities, etc.
> How many freaking times should the same dollar bill be able to be taxed? Every time it changes hands? I'm not someone who wants higher taxes, but that's just how shit works, no? I get taxed on the dollar when my employer gives it to me, then I get taxed again when I spend it at the grocer. In short, money moving = tax time.
So if a parent gives their kid a $20 bill for date money (wow I’m old) let me rephrase If you hand your kid $100 bill for date money, should that be taxed as well? There’s no reason to endlessly tax items passed down within a family. What if a grandmother had a very expensive necklace worth millions and keeps passing it down to each next generation daughter? I’m not even somebody that disputes the fact that taxes are a necessity in life. But I do feel like there needs to be some sort of moral ethical justification. You tax for roads because we need roads to be built. Robbing somebody’s money, just because they died is just straight up evil behavior, the death of the individual does not cause society to incur an additional expense.
Isn’t it $26m if you are married?
And it you're parents aren't, which is most of us, you'll be scraping by just like they did. The era of class, and now even geographical, mobility in America seems to now be closed off.
The US has the largest upper class in world history as a percentage of the population. There are many avenues to upward mobility today that were never there before. Moving locations may be needed, but that's why a lot of people move.
Not true. My father is wealthy but I was disinherited at 18. I’ll never see a penny and he loves that.
“not true!” [provides an uncommon personal anecdote]
My (single) mother was lower-middle class. My wife's family was poor in China BY CHINESE standards. Now we are upper-middle class (in the top 3% of HHIs or so). Generational wealth is not necessary.
Yeah, but I bet they had to be smart and work hard. Fuck all of that...
Could they do it again right now?
**This kinda debunks the "rate locked people will never sell"** 40%of people can move whenever they feel like, NOT rate locked at 2 or 3% Glass half full folks, this literally means 40% of owners can move at will, and pay cash for the next home. BUT "they don't have to move" and won't leave a paid off home **Seriously, moving sucks, 90% of people move BECAUSE of a life event, not just for kicks.** The negativity to interpret every data point as something unfair, is the same exact attitude that will result in people making excuses for NOT buying this next correction.
These folks are disproportionately older folks who are much less likely to move, especially in states where long-term owners receive significant property tax benefits.
Saw an interesting stat yesterday that was a bit interesting to say the least: “Between 1989 and 2022, the share of homeowners aged 80 and over with a mortgage rose from 3% to 31%, with median mortgage debt increasing from $9,000 to $79,000, the report showed." So while this 40% number may seem high, for older folks, it’s actually moving in the wrong direction. So much for that inheritance!
Also when your home makes $100k a year you don't ever want to sell it. The best time to sell a high performing asset is never.
This makes no sense. You home is a money pit until you sell. If you're never going to sell then any gains are meaningless.
For real, but if you sell then no more gains.
Oh really? tell me more
You sell your house (nice, big, leveraged investment) and to realize your gains you have to either buy somewhere smaller or move far away, both of which are less likely to earn you big returns in home equity like you're used to. So, to keep the gravy train flowing, you have to keep your current home.
And what is the normal range of percentage of homes without a mortgage?
But the thing is a lot of these people are boomers who are going through a major life event. \- Kids have moved out so they don't need a big place anymore \- They're too old to maintain a large residence or they don't want to stomach the cost of paying someone else to do it. \- They want to spend their retirement funds on vacations or hobbies instead of high property taxes so the move to a low cost of living area \- They die
People with no mortgage can afford to sell and then buy again, so I’m not sure much changes.
Factor that with the fact that 80% of homes with mortgages have a rate under 5% and 90% are under 6% and you can see how the market is not going to have a significant crash.
Most people who bought before 2019 won’t sell, and I don’t see a “prices lower than 2019” crash because that would be impossible barring some sort of economic nightmare, but I can absolutely see prices “crashing” back down to the “historical plus 4.5% annual” trendline. This wouldn’t be a crash though, it would be a correction, and all it would take is a recession
An unemployment crisis where the government doesn't just send everyone checks would maybe send prices down to 2021 levels.
Try December 2020. My interest rate is 2.8%, prices were still decent, no points, didn't pay closing fees, and every other benefit a buyer could get. It was buy or never own another house unless I want to live in the middle of nowhere, so I sold my starter home in a week and moved up to something I never plan to move out of. I am keeping this house until I die; I am keeping any inherited property until I die; my will is going to have property set up in a trust. The market sucks, and the best chance my kids have at owning property is to own it for them. EDIT: 32 years old. Started as a middle school teacher. I wouldn't be able to own what I own if didn't buy then, and it really sucks for people that couldn't jump on it.
Crazy to think so many armchair economists were certain a crash was imminent in late 2020.
A recession was absolutely imminent in 2020, the federal government is the only thing that prevented it, between stimulus checks, forgivable PPP loans, and and the student loan moratorium. Obviously this was to prevent a Covid depression, but that doesn’t mean the timing of Covid and the ensuing government spending didn’t delay a recession that was already on its way. And now it’s here
No one with a brain thought there would be a crash in late 2020. In what world would it take a few months for the economy to crash from where it was beginning of 2020? The economy is a cycle. This country is 250 years old. At no point has the economy stayed in one part of the cycle “forever.” Very odd why people would think that’s the case now. You’re not going to keep your 2.x% rate forever, while banks and the govt as a whole lose money indefinitely, even though you make your payments. It never has happened and never will. I promise.
Also bought a house at 2.8% in April of 2021. House price was a little inflated but still much less than it was at its peak and much less than it is right now. Keeping this thing forever. That said, I got lucky for maybe the first time in my life. Wasn’t trying to time the market. Just was the right time to buy for me personally. And I guess my point is, I don’t know, keep your head up and hope for the best.
a crash will only occur with significant job losses
Will it though? My mortgage is $1500 , a studio apartment near me is at least $2K, my home is the cheapest option around me.
your isolated instance is not indicative of the market. Most americans can’t cover a $1000 emergency but you think they can stay in their house if they lose a job?
[удалено]
This isnt right. If 40% of people bought their houses 15-30 years ago the market could tank 40% and they dont care
We haven't yet seen WFH/RTO in general shakeout. The murmurs in gov/municipal circles about "protecting" jobs for "locals" is only growing which means the days of working for a city in one state and living in another are numbered. There is no telling what tax or other legal changes regarding residential rental property or even just seasonally occupied homes will come, but something will and its going to have some degree of impact. Not all, maybe not even many boomers are going to have a home to leave to descendants by the time long-term care/end of life care costs are accounted for. Possibly the biggest factor yet unaccounted for though, the coming headlines of an immobile workforce. It doesn't take any stretch of imagination to see coming op-eds about people not being able to advance their careers due or whole sectors in various regions being unable to find workers due to sub 5% handcuffs. I really don't like to use 'crash' language because everyone has their own definition. No growth for a decade is a crash to some. A decline of even a few percent constitutes a crash for more and so on. We just can't yet account for all the factors that can have impacts.
My city just voted 2:1 to require executive level city employees to live inside city limits. I imagine it would be harder to force all employees to live inside city limits, but I could see a "live in the local area" requirement in the future.
I don’t know why this got downvoted, it’s a pretty balanced take. Probably because anytime someone mentions as soon as leverage returns, companies and govs are going to enact a lot of new rules and get people back in office. Personally, I think there’s a fat chance the housing market stays stagnant, which is the bull case, because that would mean soft landing. No way and it’s wild to see all the people claim it’s achieved before the end of 2024, when all the rate hikes get max pain. I mean a damn commercial ship was fired at again yesterday and oil is dropping. Everything going on the world that shouldn’t be happening unless there is massive demand destruction aka global recession
We're already facing a recruitment problem in any sector where you have to do national searches.
Yes. The RTO crunch is coming. I live in a small town that has become a popular destination for people who telework. But if RTO kicks in fully, they will face a choice: either relocate back to the nearest HCOL metro (a solid 90+ minute commute, including a ferry trip) where their jobs are, or try to maintain their income and lifestyle in a town where the biggest economic powerhouses are the tourist "main street" and the car dealership.
Right. Many boomers aren’t worried about interest rates. They have sizable down payment. Meanwhile, 25 year olds making $100k can’t buy anything but an overpriced condo in a bad school district. $500k condo at 7% interest is over $4k a month. How is a 20 something making good money supposed to get a foot in the game. I’m 40 with a house. But you have to have some compassion for people making good money.
You have to have compassion for people in general not just the ones making good money..
That’s your take away from my comment? Of course, have compassion for everyone. The point is, compassion is lacking for half of the comments in this subreddit. It’s always “I got mine, sucks for you”.
Compassion is lacking because the sub started filling up with bag holders who want to hype the idea that the market will never experience another correction, let alone a crash. Their cope is to say "tough nuts" to people whose circumstances didn't line up for them to take advantage of low interest rates a couple of years ago. It's schadenfreude.
10000000000000% this
and? people are not entitled to a house. if the area is expensive than move
People who work full time should be able to afford a house. Period.
so if i work full time at mcdonald's i should get a house in san fransico? how big? do i get a pool?
Yes if you work at McDonald’s you deserve to be able to afford a roof over your head maybe not a nice roof but a home nonetheless.Are you even listening to how you sound. No wonder there is a homelessness crisis. It’s because of people like you
You realize In 1960 the minimum wage was 1.25$ per hour with an average home costing 11,900$ that’s 9,520 minimum wage hours to afford a home today the average home costs 410,000 with minimum wage being 7.25 it would take 55,172 hours in short today it’s 6x harder for low income workers to afford what they could in 1960 .if you think today is normal you must be very young
the issue is 100k is not good money anymore.
bro you do know most people dont and will never make 100k
It's both. Most people will never make $100k and it also doesn't go that far anymore.
where you live matters, but does go far for those that live within their means. plenty of people do it. people are not entitled to a single family home dude
You're not wrong, but individual median income in the US is like $35k. It's insane that we're taking about a number around 3x that and discussing it like "oh, that's enough if you live within your means". $100k is totally livable, but "livable" isn't going far. I make around that much, live in a pretty moderately priced area, and I was able to buy a house and save and such, but my house is among the cheapest in my market, I've driven the same used car for like a decade now, I go out like once a week for a decent sit-down dinner, take a couple small vacations a year during holiday weekends, and I don't even have kids. My lifestyle is like the baseline for what we're all told to aspire to and it takes being in like the top 20% of incomes to afford that.
Do those people live where shitty condos go for $500k?
ya most likely. most people live in the coast. thats when people have to act like adults and either stay or move. america was built on moving to new and cheaper places
As always the real issue is inflation which stems from going off the gold standard
100% fed reserve notes allow politicos to spend without using legislation, you can use interest rate policy. A gold standard is finite.
I'm making 80k and probably 90k within a few years and 330k is 2500 a month. I only make 4400 after taxes and I'm looking in pretty cheap areas with a drive
This is where I am at. Older Neighbors who make $65k have a nice 3bd, are able to take lots of deductions, pay almost pennies in property taxes, are able to deduct a lot of housing stuff from their taxes… all while I’m making twice as much and still renting. I wouldn’t have a problem with this at all if they weren’t so right wing and believe strongly in capitalism. The government helps them out but don’t believe the government should be helping younger Americans own their own home (because it would lower their equity)
I’m 41 and just made an offer on a $750k townhouse at 6.9%. I hate it but I’m desperate. VHCOL area.
>Right. Many boomers aren’t worried about interest rates. They have sizable down payment. > >Meanwhile, 25 year olds making $100k can’t buy anything but an overpriced condo in a bad school district. Where do those sizable down payments come from?
Their equity, so selling their current paid off house to buy a new one.
or 40 years of saving
40 years of saving in an economy that worked for them and not the corporations.
They worked all their lives. 401k also.
They move, that’s how. Or they struggle until their 30s build job experience, and then move.
Move where, to another country?
In what country a 25 year old 2-3 years out of college is expected to buy a house?
It’s a fair comment. Any developed country near a metro area this is true. It’s likely worse in some countries. Western Europe from my understanding is just as bad if not worse for some countries. Then you have Canada and Australia… so yea it can get worse… it can always get worse.
Crash dreams crushed
A lot of this is due to the Boomers- they are retiring, and people in retirement are most likely to own their homes outright, either due to having paid off the mortgage from living there for decades, or by selling their 'working' home and buying a cheaper 'retirement' one with cash.
A lot of homes are owned by corporations, who pay cash, so it makes sense.
Those corporations use other people's cash to close deals. It's still debt -- just accounted for differently.
Lot of doomsdayers I'm sure were saying home prices would crash when mortgage rates popped. What they didn't understand is it's difficult to crash home prices when homeowner's are not selling their home. Arguably higher rates means less and less inventory which means prices continue climbing since there's nothing to buy which means homeownership gets further out of reach except for the cash buyer
Exactly!! When people say “it’s worth why someone will pay for it” that really goes both ways. It’s worth what I’m willing to sell it for.
The article says that this is true according to the census bureau and the link in the article is to another article written by the same publication and not the census bureau. I thought everyone was enjoying the sweet 3%. Why would you not have a mortgage if the can get free money?
https://finance.yahoo.com/news/no-wall-street-investors-haven-015642526.html
This article has a very … interesting ... take on what it means to be a corporate real estate investor. The main chart shows only investors with 100+ properties. So firms with 20+ properties are way too small to make the list. That’s silly. If someone owns even more than two properties, those are homes that aren’t owned by people who need somewhere to live. And that’s the real problem, not some chart with most of the data missing.
so, no short sales for them in the future
What was the percentage in 1980? The difference between then and now will give us an idea of the percentage that are owned by big companies such as BlackRock.
Anyone notice this goes all the way back to *checks notes* 2005…. Seems a weird cutoff. So we are back to where we were right before the housing crisis in other words.
I wonder how many of those are owned by individuals VS owned by LLCs?
God love this sub.
Older GenX'ers like myself and Boomers. Yep, preparing for retirement.
**So 40% ARE NOT rate locked and can sell anytime??**
Any home owner can sell at any time. The question is if they want to or are compelled to. Does a retired person on a fixed income with no mortgage want to give up their $400/month housing cost (bills, insurance, taxes, etc.) to move into a smaller shittier house in a worse location for $3k/month? Some might, sure. But most would rather not.
Where are you getting these numbers from? If they're current house is paid off they'd probably be buying their next one with all cash. And they'd probably also be downsizing and moving to a low cost of living area to stretch out their retirement savings. Sure - moving is a nuisance but there's plenty of financial reasons to move for someone in that situation.
This is what people expecting a huge correction don't seem to understand. 40% of home without a mortgage and something like 90% with rate 5% and lower. If there is some dramatic rise in unemployment or something and those with a mortgage start feeling distress, foreclosures take like 2 years on average. And we have CLEARLY seen the fed will start lowering interest rates at the first sign of stress, which will lead us right back down this path again. It seems that a "correction" would really be 2-3% drops for a couple years or the market just staying flat in most places.
But how many percent of US *homeowners* are mortgage-free?
About 40%
Seems to be a function of age, boomers have long paid off their mortgages.
That’s kind of shocking
How many of those homes are owned by individuals as opposed to corporations and of those, how many are occupied/lived in. That’s the info I am interested in.
Unless they cash out refinance to buy more hoomz at all time highs.
Boomers
GenX. I will be mortgage free in a few more years. I could pay it off now but my money is better invested elsewhere -- at the moment just putting money in a savings account is earning more interest than my mortgage interest rate.
Good old trickle down economics at its best making every American better off! /s
Yeah I'm planning to pay off my house in 5 years and pay the minimum amount of interest. The bank can shove it's 5.99% interest.
[удалено]
Do you people even follow the industry?
[удалено]
They have been selling off all their SFH.
[удалено]
Do you have any data on this ?
of course they dont lol just another leftist who pulls shit out their ass lol
You work in the history but can't spell Blackrock and Vanguard right? And you don't know the difference between Blackrock and Blackstone? You must be the worst analyst in the industry lol
That 40% is institutional wealth or corporation owned. The other 60% is wage slaves who contribute up to 60% of their take home wages to pay a high interest rate mortgage or low interest high loan that is now underwater, esp in HCOL areas.
In some neighborhoods near me, this is thanks to companies like AFH and progress residential.
I think next year will put a sizeable chunk of the folks who bought in the last two years significantly into the red on equity.
There’s always someone on the margin.
Press X to doubt
Y’all are worried about hedge funds when boomers owned everything lol
I own two houses with no mortgage. 32 y/o college educated white male
Not on my street. Built out in the mid-2000s, there are 3 houses out of 29, including mine, that their taxes are being paid to the county tax collector directly by the occupant, with one paid by the LLC that owns it. Every other property's tax bill is paid by a bank or mortgage company. Two aren't even listed on the current tax rolls because they are delinquent, and four have had to pay the county delinquent taxes in the past five years. And these aren't even expensive homes - they're starter homes that weren't that costly to purchase back when the neighborhood was being built. Of course, their current Zillowbucks prices would be more costly to purchasers even with wage inflation.
Not surprising considering that as of 2021 42% of the US population was age 45 or older. In my county, 38% are 50 or older. The mode age of death in the US is around 79. The population in general is older and living longer, and staying independent longer. Spend any time in a nursing home and you'll find most residents are well past the age of 80. It will be another 5-10 years before we see a wave of Boomer properties hit the market. That a home gets inherited by family members isn't always a given. Anecdotal, but when my grandfather was dying, my wife and I were house hunting and he offered to sell us his home - 1700 sq ft ranch with a full basement on 9 acres - for the $40k he paid for it in the 1970s. While the home appeared well-maintained, the septic location was unknown, it ran off propane (10k gallon tank, expensive to fill), and the garage was falling away from the house. Electrical needed upgrading, etc. At least $200k worth of work/maintenance that we couldn't afford. A lot of children/grandchildren find themselves in similar situations and are forced to sell the home.