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Thank The Boomers For Home Prices
I read a fascinating article today about America’s housing market. You can click here to read the article. Here are the bullet points …
Home prices are at record highs.
Rates are at record highs.
Home prices are the highest percentage of income on record.
Since most home owners bought their mortgages at such low rates, no one is going to sell.
Even if the rates came down, all that would do is increase demand and decrease supply, which would increase home prices.
Now, here’s my take.
The reason why the housing market is the way it is is complicated, but there is one huge factor that can’t be ignored.
Yep. Those boomers.
Now, before all my millennial brothers and sisters get triggered and start blaming boomers for your problems, I suggest you first thank them for keeping the U.S. economy in such good shape over the last three years.
You ever stop to ask why America’s economy is doing so well after Covid while the rest of the world is crashing and burning?
Well, America is the only country that had a baby boom after the second world war. Now, those boomers are the healthiest older people in history (and there’s lots of them) and instead of retiring and dying, they’re going on cruises and spending money on their grandkids.
So, I never thought I’d say this, but thank you boomers.
Now, back to the housing market.
Millennials … You have to take the wins with the losses.
Yeah, we got screwed by the great financial crisis. Yeah, you (not me because I didn’t fall for the scam that is higher education) went $80,000 in debt for a piece of paper that is worthless. And yeah, your parents got divorced and left you with emotional trauma and skepticism towards the traditional family dynamic. But let’s be real, you have it pretty good.
On the surface, it may seem like you got the shit end of the stick again, seeing that you can’t buy a home to raise your family in.
Site note* - Real estate is actually just affordable as ever, but millennials aren’t satisficed with a 1300 square foot home the way our parents were. I wrote an article about it.
Life has it’s seasons. This season of your life is dedicated for you to be disgruntled and annoyed that you can’t have 5 beds and 4 baths and central air.
But, there is light at the end of the tunnel. Because as we all know, life stops for no one, not even the boomers. And eventually, the boomers will pass on and flood the housing market with inventory.
When that happens, what do you think comes next?
Yes, a massive price decrease. A HUGE flood of housing inventory. The biggest transfer of wealth in history of the world.
The same is true with small businesses, annuities, trust funds, high end art, classic cars, and any other financial asset you can imagine.
So, to my millennial brothers and sisters, hear you me. I know it feels all doom and gloom right now, but there are brighter days on the horizon. In the end, markets are fair (in the same way that The Joker is fair) and the anarchy of markets will continue to tell the truth. So you will get your affordable house soon enough, even if it’s not when you want.
In the meantime, I suggest you hug your parents and call your grandma. Because when these moments come to pass, the last thing you’ll be thinking about is home prices.