Total wealth since 1989

[Hards Alumni]

"Millenials only have themselves to blame, the way they spend money on homes that aren't even that nice! Then they take out these huge mortgages and they expect the government to bail them out when they go under!"

aVocAdO tOAsT"

[UWW2MU]

Revisionist history.  A large portion of Millennials came of age during the 2008 housing crisis.  Anyone buying a home from 04-08 was buying overpriced homes... homes that new home buyers (millennials) could not afford.  Afterwards was 10% unemployment and a lot of young people (millennials again) had problems finding work straight out of school. 

Fewer jobs available, decreased savings, and fear that the housing bubble would happen again strongly contributed to millennials being slow to purchase homes.

This lazy narrative that millennials CHOSE to not buy into the housing market seemingly, "just because" is just flat out wrong.  The generation was just beginning to build wealth and purchase homes when the pandemic struck.  Why do you think the housing market was so hot?  Millennials finally had the wealth to purchase homes en masse... except that a decades worth of them were all trying to purchase at once.  Pair that with low numbers of new builds, and boomers and SGs staying in their homes longer, and you see the results. 

Now that interest rates are through the roof for 30 year mortgages (over 7%) and housing prices have barely dipped, you're going to continue to see a lot of millennials and especially zoomers stuck at home with their parents... or they'll continue to be stuck renting.

https://www.investopedia.com/insights/how-financial-crisis-affected-millennials/
https://www.businessinsider.com/how-the-great-recession-affected-millennials-2019-8

Um, no.   I didn't revise anything, nor did I pass judgement on the decision not to buy homes, nor say anything about it being "just because."   

But just for the heck of it, let me point out a few things.   1. Most Millennials were prime buying age AFTER the crash of 08 and housing was extremely affordable and easy to do.  The government was literally giving away $7,500 if you bought your first home.  Yes, you needed a job and Millennials had the highest unemployment rate of the US population, but even that only lasted a few years and at the same time the gov was making it very easy to do.  2. Interest rates in the 2010's were always below 5%, which is extremely low.  3. Not buying WAS a choice and many more Millennials DID choose to live a more urban lifestyle that often meant renting in urbran centers instead of buying a house in the burbs like previous generations.  That was often a lifestyle choice, it's not revisionist to say that.

[dgies9156]

Oh yeah?  How did it change your and your friend's day-to-day?  Did you buy smaller homes, put off major life decisions, etc.?  The most frustrating thing about these conversations to me is that your age bracket says "hey millenials, thems the shakes, it affected us all." But it didn't. It emotionally affected you because your 401(k) balance went down. But it didn't ACTUALLY change any aspect of how you lived your life - you just temporarily felt less secure in your distant financial future. It is the functional equivalent now of a millenial looking at their 401(k) and pretending the stock market drop affects them the same as someone on a fixed income. It might make them feel less secure, but it doesn't affect their life decisions or spending in a material way.

The common thread in this subject is an apparent desire to have immunity to market forces.

We tried that for many, many years. The long-departed Reg Q limited savings rates paid by insured financial institutions. Stable rates led to stable mortgage rates -- and were a contributor to high inflation in the 1970s (along with oil prices). When the Fed moved to bring inflation under control, we terminated the savings and loan business.

We tried to make home ownership universal beginning in the 1990s. We loosened down payment and eligibility standards for qualified residential mortgages. It worked for awhile until 2008, when "payment option" ARMs, sub-prime mortgages and other high-risk residence-secured debt blew up as secondary market conduits failed to adequately recognize and price risk. That meant the federal government bailed out the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, as well as Lehman Brothers an a couple of large insurance companies. That bail-out was far more expensive than the savings and loan crisis.

And yet, we seem to want more.

You guys keep focusing on income disparity and how hard it is to buy a home. Of course, buying a home is hard. It's the single largest purchase you'll ever make, regardless of income status. You have to save and manage money carefully. That's true of our ancestors going back, well, forever.

I'd strongly suggest that instead of focusing on income disparity, we focus on the percentage of Americans who are living comfortably. If we want to get bent out of shape over income disparity, take a hard look at household income, rather than individual salaries. And, as I noted earlier, the standard of living in this country is comparatively fabulous.

[MUBurrow]

The common thread in this subject is an apparent desire to have immunity to market forces.

We tried that for many, many years. The long-departed Reg Q limited savings rates paid by insured financial institutions. Stable rates led to stable mortgage rates -- and were a contributor to high inflation in the 1970s (along with oil prices). When the Fed moved to bring inflation under control, we terminated the savings and loan business.

We tried to make home ownership universal beginning in the 1990s. We loosened down payment and eligibility standards for qualified residential mortgages. It worked for awhile until 2008, when "payment option" ARMs, sub-prime mortgages and other high-risk residence-secured debt blew up as secondary market conduits failed to adequately recognize and price risk. That meant the federal government bailed out the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, as well as Lehman Brothers an a couple of large insurance companies. That bail-out was far more expensive than the savings and loan crisis.

And yet, we seem to want more.

You guys keep focusing on income disparity and how hard it is to buy a home. Of course, buying a home is hard. It's the single largest purchase you'll ever make, regardless of income status. You have to save and manage money carefully. That's true of our ancestors going back, well, forever.

I'd strongly suggest that instead of focusing on income disparity, we focus on the percentage of Americans who are living comfortably. If we want to get bent out of shape over income disparity, take a hard look at household income, rather than individual salaries. And, as I noted earlier, the standard of living in this country is comparatively fabulous.

Nah.  My issue is that the "apparent desire to have immunity to market forces" seems to migrate with the socioeconomic circumstances of a particular segment of the American population - a fact that when pointed out, gets obsfucated with axioms like "it affects all of us" or "the standard of living in this country is comparatively fabulous." 

[UWW2MU]

Points of clarification here.

I am an older millennial myself and bought my first house in 2009.  That helps shape my perspective to be different than many other millennials.

I jumped into the conversation because I see a difference between the people who are complaining and making excuses and giving off the vibe that they think the world is against them and it owes them something vs those who just merely are discussing headwinds that first time homebuyers face right now. 


For example, there's a difference between my friends Becky and Erin.

Becky has always made good money, loves living downtown and is married to a director at a fortune 500 company who can afford $3500 rent in the 777 building in MKE.  They complained how they can't find a house that they both like and afford that isn't off the market before they can see it.
Erin, and admin assistant pays $1,100 in rent and is married to a police dispatcher.  They truly couldn't afford to buy until now, but prices have gotten out of control and once again can't afford to buy in a decent neighborhood.


To Becky, I wish I could just tell her she did this to herself, she decided what she wanted and now has to deal with the consequences and no, you can no longer get your big home in the north shore that needs no updates without having to compete with others who made the same life decisions.  To Erin, best I can do is empathize and tell her it's Becky's fault.   

[Spotcheck Billy]

But did you pay 250k?  $260 sq/ft?

My wife and I bought our current home under $150 sq/ft almost a decade ago.

It was the cheapest house on the block: $65 sq/ft in 1992

[TAMU, Knower of Ball]

It was the cheapest house on the block: $65 sq/ft in 1992

So no. Accounting for inflation, you paid the equivalent of $137.21/sq ft, just over half the price of the example Hards provided.

Again, no one's looking for pity. Just an acknowledgement of the current difficulties facing first time home buyers.

[TAMU, Knower of Ball]

Points of clarification here.

I am an older millennial myself and bought my first house in 2009.  That helps shape my perspective to be different than many other millennials.

I jumped into the conversation because I see a difference between the people who are complaining and making excuses and giving off the vibe that they think the world is against them and it owes them something vs those who just merely are discussing headwinds that first time homebuyers face right now. 


For example, there's a difference between my friends Becky and Erin.

Becky has always made good money, loves living downtown and is married to a director at a fortune 500 company who can afford $3500 rent in the 777 building in MKE.  They complained how they can't find a house that they both like and afford that isn't off the market before they can see it.
Erin, and admin assistant pays $1,100 in rent and is married to a police dispatcher.  They truly couldn't afford to buy until now, but prices have gotten out of control and once again can't afford to buy in a decent neighborhood.


To Becky, I wish I could just tell her she did this to herself, she decided what she wanted and now has to deal with the consequences and no, you can no longer get your big home in the north shore that needs no updates without having to compete with others who made the same life decisions.  To Erin, best I can do is empathize and tell her it's Becky's fault.   

I think the frustration stems from people overestimating how many Beckys there are vs. Erins. And also the need to blame Beckys when their impact on the current situation has been minimal.

[TAMU, Knower of Ball]

You guys keep focusing on income disparity and how hard it is to buy a home. Of course, buying a home is hard. It's the single largest purchase you'll ever make, regardless of income status. You have to save and manage money carefully. That's true of our ancestors going back, well, forever.

I'd strongly suggest that instead of focusing on income disparity, we focus on the percentage of Americans who are living comfortably. If we want to get bent out of shape over income disparity, take a hard look at household income, rather than individual salaries. And, as I noted earlier, the standard of living in this country is comparatively fabulous.

Dgies, first of all, we're not focused on how hard it is to buy a home. We're focused on that it is harder to buy a home today than it was when your generation was entering the housing market. Can you acknowledge that?

If you are hanging your hat on "increasing % of American's living comfortably" that's not an accomplishment. That is something that has happened naturally over 1000s of years. New innovations increase the standard of living of all but doesn't address the disparity of wealth. It's akin to telling a homeless person that they are better off than George Washington was because they have access to air conditioned shelters and electricity. And bluntly, it's very easy (and very crappy) to say to ignore income disparity when you are on the topside of that income disparity. I'm fiscally conservative. I believe in Capitalism and that there is a path to upward mobility. However, I think it is important to have honest conversations about the barriers that have been erected the limit upward mobility and having conversations about the best way to remove those barriers.

[Hards Alumni]

Points of clarification here.

I am an older millennial myself and bought my first house in 2009.  That helps shape my perspective to be different than many other millennials.

I jumped into the conversation because I see a difference between the people who are complaining and making excuses and giving off the vibe that they think the world is against them and it owes them something vs those who just merely are discussing headwinds that first time homebuyers face right now. 


For example, there's a difference between my friends Becky and Erin.

Becky has always made good money, loves living downtown and is married to a director at a fortune 500 company who can afford $3500 rent in the 777 building in MKE.  They complained how they can't find a house that they both like and afford that isn't off the market before they can see it.
Erin, and admin assistant pays $1,100 in rent and is married to a police dispatcher.  They truly couldn't afford to buy until now, but prices have gotten out of control and once again can't afford to buy in a decent neighborhood.


To Becky, I wish I could just tell her she did this to herself, she decided what she wanted and now has to deal with the consequences and no, you can no longer get your big home in the north shore that needs no updates without having to compete with others who made the same life decisions.  To Erin, best I can do is empathize and tell her it's Becky's fault.   

This is your ideology creeping in.  I'm certainly older than you, and bought in 07 and then upgraded in 13.  I've posted articles and statistics that show how it was more difficult for our generation.  YOUR personal experience and mine are irrelevant since they're anecdotal.  I've mentioned many times how fortunate I've been. 

[UWW2MU]

I think the frustration stems from people overestimating how many Beckys there are vs. Erins. And also the need to blame Beckys when their impact on the current situation has been minimal.

Perhaps.  Can we also admit that there could be an overestimation on how many Millennials are struggling to buy a first home that truly can't? 

Per US Census, in 2019 home ownership for Millennials was 59% vs 65% at the same age for Boomers.  Plus, I feel like whenever there's talk about the harships people faced to make homeownership happened (ie "I bought a dated, tiny, piece of crap house when I made $36k a year in 2009 because I knew it would pay off") suddenly makes people get defensive and make sarcastic comments about avocado toast spending.

[UWW2MU]

This is your ideology creeping in.  I'm certainly older than you, and bought in 07 and then upgraded in 13.  I've posted articles and statistics that show how it was more difficult for our generation.  YOUR personal experience and mine are irrelevant since they're anecdotal.  I've mentioned many times how fortunate I've been.

I'm certainly not hiding anything, and I mentioned that to make my biases clear as I'm not trying to hide them.  But there's a flip side to that, where people's decision making 10 years ago are affecting their life now and they won't recognize their own bias.  I too am grateful and feel truly blessed for how fortunate I've been, but it also didn't happen by accident.  I didn't trip and fall into home ownership by accident.

As I said, the headwinds and challenges exists... but it's usually (as always, not applicable in all situations) not impossible to buy a home as long as you have realistic expectations.  Well, until now with the interest rates at almost 7% and housing prices not down yet.  Just give that until spring though, the market with correct that. 

[TAMU, Knower of Ball]

Perhaps.  Can we also admit that there could be an overestimation on how many Millennials are struggling to buy a first home that truly can't? 

I can't because I don't see that happening. I see people who believe that millennials are struggling supporting their assertions with data, I see people who don't believe it support it with anecdotes and quips about about millennials whining too much.

Per US Census, in 2019 home ownership for Millennials was 59% vs 65% at the same age for Boomers. 

Or in your case, data that actually supports that it is harder to buy home now than it was before.

As I said, the headwinds and challenges exists... but it's usually (as always, not applicable in all situations) not impossible to buy a home as long as you have realistic expectations.  Well, until now with the interest rates at almost 7% and housing prices not down yet.  Just give that until spring though, the market with correct that. 

You keep building this strawman that people are saying it's "impossible" to buy a house. What is being argued is that it is harder to buy a house now than it was before.

[Hards Alumni]

Perhaps.  Can we also admit that there could be an overestimation on how many Millennials are struggling to buy a first home that truly can't? 

Per US Census, in 2019 home ownership for Millennials was 59% vs 65% at the same age for Boomers.  Plus, I feel like whenever there's talk about the harships people faced to make homeownership happened (ie "I bought a dated, tiny, piece of crap house when I made $36k a year in 2009 because I knew it would pay off") suddenly makes people get defensive and make sarcastic comments about avocado toast spending.

You're missing the forest for the trees here, mate.  I'm not saying the Millennials are STILL struggling to buy homes.  I'm 40.  The youngest Millennial is 26.  Anyone in that age group should probably be able to afford a home BY NOW.  We're old.  We're not the youth anymore.  We could be parents to college graduates for Christ's sake.

How do you think the Zoomers are going to do considering how rough the last couple of years have been?  They're in a WORSE situation that we were!  And that has been the entire point.  It has become MUCH more difficult to purchase a home in the last decade and the NUMBERS BEAR THAT OUT.   Home prices have sky rocketed.  Interest rates are up as well.  Wages have not kept up.  As a result, people are required to spend much more on housing than in decades previous.  This is the entire point that is being made.  Can someone still buy a house in the boonies for 40k and drive an hour or more to work?  Probably.  No one here is suggesting that young people should be able to immediately purchase a large family home in the burbs right out of school.  But even starter homes are basically out of reach for first time home buyers.

The 'starter home' I posted earlier last sold in 2015 for 70k.  Now it's more than doubled seven years later.  And looking at the condition, it looks more like an apartment you'd find on campus at Marquette than a home.   

I've never seen anyone claim that there isn't a housing problem in this country.   If you're doing that, you better show your work or don't expect others to take you seriously.

[4everwarriors]

Lotsa free land under I-794 if ya gotta tent, hey?

[Uncle Rico]

Lotsa free land under I-794 if ya gotta tent, hey?

Surprised I don’t see more Christians down there trying to help the poor and homeless.  Too busy watching porn, aina?

[MUBurrow]

If you are hanging your hat on "increasing % of American's living comfortably" that's not an accomplishment. That is something that has happened naturally over 1000s of years. New innovations increase the standard of living of all but doesn't address the disparity of wealth. It's akin to telling a homeless person that they are better off than George Washington was because they have access to air conditioned shelters and electricity. And bluntly, it's very easy (and very crappy) to say to ignore income disparity when you are on the topside of that income disparity. I'm fiscally conservative. I believe in Capitalism and that there is a path to upward mobility. However, I think it is important to have honest conversations about the barriers that have been erected the limit upward mobility and having conversations about the best way to remove those barriers.

And I think an additional spin here is that this isn't just important from an equity or fairness point of view.  There are real economic consequences to having millenials put off buying houses, starting families, etc. As those decisions continue to be put off, folks are going to start to adapt their preferences to their abilities, and a lot of those things they are putting off won't ever happen. I think the further downstream consequences of that remain to be seen, but I suspect the current labor situation at least partially reflects that. 

[Goose]

TAMU

The crazy housing market has been causing havoc for a couple of years and it has been crazy. Two of my sons bought very nice properties in MKE (one duplex and one home) in 2019 and paid a very fair price. I guess I am missing how two bizarre years has altered the fate of anyone under 40 years old.

[MU82]

Surprised I don’t see more Christians down there trying to help the poor and homeless.  Too busy watching porn, aina?

Or pissing on the tents as they make fun of the homeless.

[UWW2MU]

You're missing the forest for the trees here, mate.  I'm not saying the Millennials are STILL struggling to buy homes.  I'm 40.  The youngest Millennial is 26.  Anyone in that age group should probably be able to afford a home BY NOW.  We're old.  We're not the youth anymore.  We could be parents to college graduates for Christ's sake.

First... HOW DARE YOU?! 

j/k, I'm going to really enjoy being middle age!   

I've never seen anyone claim that there isn't a housing problem in this country.   If you're doing that, you better show your work or don't expect others to take you seriously.

Second, both of you and TAMU are putting words in my mouth.  I keep agreeing that there are more challenges right now, especially in the last year or two.  Again, I only jumped in because despite the challenges, home ownership is still a very viable option for many people and/or will be in the coming years.  Since home ownership is the largest driver of wealth, and the market will correct itself to balance things out, I'm not too concerned long term.  Just wait and see what happens when boomers start moving into nursing homes and/or dying off in bigger numbers. 

[Uncle Rico]

TAMU

The crazy housing market has been causing havoc for a couple of years and it has been crazy. Two of my sons bought very nice properties in MKE (one duplex and one home) in 2019 and paid a very fair price. I guess I am missing how two bizarre years has altered the fate of anyone under 40 years old.

I wouldn’t buy a house in this market.  Also, I’m not sure I’d sell.  Buying a new place sounds like a wash at best and rent rates have skyrocketed as well. 

[TAMU, Knower of Ball]

TAMU

The crazy housing market has been causing havoc for a couple of years and it has been crazy. Two of my sons bought very nice properties in MKE (one duplex and one home) in 2019 and paid a very fair price. I guess I am missing how two bizarre years has altered the fate of anyone under 40 years old.

You said earlier in this thread something about how important it is to not be house poor and yet can't see how the current housing market would impact first time home buyers? That's willful ignorance Goose.

[TAMU, Knower of Ball]

Second, both of you and TAMU are putting words in my mouth.  I keep agreeing that there are more challenges right now, especially in the last year or two.  Again, I only jumped in because despite the challenges, home ownership is still a very viable option for many people and/or will be in the coming years.  Since home ownership is the largest driver of wealth, and the market will correct itself to balance things out, I'm not too concerned long term.  Just wait and see what happens when boomers start moving into nursing homes and/or dying off in bigger numbers.

I'm not putting words into your mouth. I just keep saying that you are building a strawman that no one is arguing about. You say you agree that there are more challenges. Great. That's really all that anyone is trying to say.

On your point about waiting until the boomers start moving into nursing homes, you are right, that will help things....if you can afford to wait to buy a home for several years. The oldest boomers are 76, the youngest are 56. Average lifespan in the US is 79. So we are 3 years away from any boomers reaching the average lifespan and 23 years away from all of them. What I fear is that those buying starter houses now at bloated prices will actually have a hard time selling when they are ready to buy their forever houses because of an increased supply driving down the value of their starter homes. That's just a worry, not a thing I'm certain will happen.

[UWW2MU]

I'm not putting words into your mouth. I just keep saying that you are building a strawman that no one is arguing about. You say you agree that there are more challenges. Great. That's really all that anyone is trying to say.

On your point about waiting until the boomers start moving into nursing homes, you are right, that will help things....if you can afford to wait to buy a home for several years. The oldest boomers are 76, the youngest are 56. Average lifespan in the US is 79. So we are 3 years away from any boomers reaching the average lifespan and 23 years away from all of them. What I fear is that those buying starter houses now at bloated prices will actually have a hard time selling when they are ready to buy their forever houses because of an increased supply driving down the value of their starter homes. That's just a worry, not a thing I'm certain will happen.

My original point, is that home ownership (one of the main paths to wealth) is still obtainable despite challenges.  I stated that b/c Hards went on a diatribe against dgies about how boomers got theirs and he didn't think millennials could.  I disagree with that, and buying a home is a way to do that.   You could have agreed with me, since we do agree on that, but instead you argued that it was tougher, which was the real straw man for my point.  But that's ok, because I agree with you anyway.  So we just kept circling in agreement I guess!   

[tower912]

I had lunch in New Buffalo today.   Admiring all of the (formerly) million dollar summer condos.    The money, the contactors, the materials for so many years went to that.   

Yes, there is a lack of affordable starter homes.   While these expensive condos sit empty 10 months out of the year.