A battle Millennials are losing to Boomers - can you say "OK Boomer" now?

[jtw2]

I’m gen x so I’ve had to compete with boomers my entire life. It’s just a really huge population that had some distinct advantages. That generation will die off though and when they do all that capital will go somewhere. Millennials will get their turn but it’s not something they are particularly good at:waiting their turn

 

[Vaquero]

^^^^^^
Why my last check will bounce.

 

[Grumps21]

I hate all this. I get called a Boomer but my parents are Baby Boomers. I am Gen X. WTF ever...I don't care.

You are not alone there..

 

[kyletxria1911a1]

I’m gen x so I’ve had to compete with boomers my entire life. It’s just a really huge population that had some distinct advantages. That generation will die off though and when they do all that capital will go somewhere. Millennials will get their turn but it’s not something they are particularly good at:waiting their turn

The Mendez Brothers

 

[Dawico]

I just hope if you want to buy a house and have the means you can. I don't care what Gen you are.

I also hope you don't do it in this inflated market.

I foresee a lot of people being very upside down soon and the foreclosures following. Not as bad as 2008 but it will be bad.

Sent from my SM-G998U using Tapatalk

 

[Brains]

We were sort of pushed into our last move, but glad we jumped when we did (2nd to 3rd qtr. 2020). Prices have gone silly, if we would have waited any longer we probably would have needed to rent until the market corrected itself.

 

[Sasquatch]

I just hope if you want to buy a house and have the means you can. I don't care what Gen you are.

I also hope you don't do it in this inflated market.

I foresee a lot of people being very upside down soon and the foreclosures following. Not as bad as 2008 but it will be bad.

Sent from my SM-G998U using Tapatalk

They're not still doing ARM loans, are they? Those were a big problem leading up to 2008 - but I think those jumping in now and doing FHA, USDA (0% down) and similar loans on inflated houses right now are going to be in for a lot of hurt when the economy crashes, and it looks like that is going to happen sooner (a lot sooner) rather than later.

People have already had almost 2 years of struggling to pay mortgage or rent thanks to the commie lock down measures and the businesses that ground to a halt because of it.

The rich are going to consolidate wealth as the world burns around them, and we're going to be left with a lot more renters and a lot fewer owners. So glad we don't have a mortgage, but there are still the other recurring expenses that aren't getting any cheaper!

I worry about my family members who are in that age bracket that they would've been looking at their first home purchase, but who can't afford it because of the housing market that has gone full retard. They're getting squoze by increasing rents with less buying power for their dollars.

 

[Darkpriest667]

They're not still doing ARM loans, are they? Those were a big problem leading up to 2008 - but I think those jumping in now and doing FHA, USDA (0% down) and similar loans on inflated houses right now are going to be in for a lot of hurt when the economy crashes, and it looks like that is going to happen sooner (a lot sooner) rather than later.

People have already had almost 2 years of struggling to pay mortgage or rent thanks to the commie lock down measures and the businesses that ground to a halt because of it.

The rich are going to consolidate wealth as the world burns around them, and we're going to be left with a lot more renters and a lot fewer owners. So glad we don't have a mortgage, but there are still the other recurring expenses that aren't getting any cheaper!

I worry about my family members who are in that age bracket that they would've been looking at their first home purchase, but who can't afford it because of the housing market that has gone full retard. They're getting squoze by increasing rents with less buying power for their dollars.

Almost no one can qualify for an ARM and those that do never choose an ARM.

People thinking this is a bubble are wrong. Millennials (my generation) outnumber the boomers, we have families, wives, etc. The demand for housing isn't going to go down. The population isn't going to go down.

Like Brains I bought exactly at the right time. I bought my house in July of 2020 and I got a KILLER interest rate (2.5%) however, I need a bigger house and I am paying almost 140k more for 500 square more feet. (the house is nicer overall and newer) I'm selling this house for 100k more than I paid for it. My new interest rate is 3.75 (I think it's a little fuzzy for another 30 days.)

This market is unlikely to crash the way the last one did.

 

[TreyG-20]

Very few people are getting into a house using FHA. All these houses being sold are conventional loans or straight cash sales.

 

[Brains]

Very few people are getting into a house using FHA. All these houses being sold are conventional loans or straight cash sales.

Ain't that the truth. FHA buyers almost need a miracle going up against people who have the ability to close now. That extended timeline, the additional inspection requirements, etc. are not going to compete against someone who can close as soon as you can get the paperwork to the title company.

 

[SQLGeek]

I bought in 2017 and pray we don't need to move any time soon. Work would be the only real reason I can foresee and I don't think that's very likely. The concept of buying a house in this market is pretty terrifying.

They're not still doing ARM loans, are they?

Oh very much so. My credit union is currently offering a 3/6 and a 7/6 both over 30 year time spans. What has gone away are the much riskier (not that an ARM isn't risky) subprime loans.

 

[TipBledsoe]

IMO:

I understand and sympathize with today's 20-30 year olds. Thier problems began before they were born, when the boomers began pushing a whole lot of good jobs outside the USA (and compounded by totally unbalanced trade deficits) beginning with LBJ and all the following Democrat and RINO boomers. Today's politicians are no better. I just don't count Trump as a politician - he started taking steps to turn our ship around. But the rising liberal majority in the US is too lazy, too stupid, and too immoral to understand the path of destruction we are on.

Us Gen-X folks have nothing to complain about. We've bought and sold, and bought and sold. As long as one buys AND sells, and doesn't do so foolishly, it makes no difference what's going on with the market - when the market causes home prices to soar; our new home purchase price tag is equally as high as the price tag of our house sold. It is especially easy to understand when a wise one looks at it from the perspective of an entire lifetime. Through most of our working years, each time we sell and buy, we go bigger and better. Then entering our retirement years we downsize and reap the rewards of the investments we made earlier.

 

[toddnjoyce]

I’ll offer this as a counterpoint: The idea that buying a house when younger is ludicrous. Historically it takes about six years just to break even on a house. I don’t know about y’all, but my 20s and 30s were the leanest years income-wise and we were moving every couple of years….no equity can develop in that short of a time span.

Now, if younger people would put just $50 every two weeks into an S&P500 fund for ten years, they’d generate close to $20K; if they can add to that amount with every pay increase and bonus, they could easily generate $30K-$50K towards a down payment, while increasing their earnings and figuring out life.

But *most* would rather have experiences and $5 coffees instead. Priorities.

 

[Axxe55]

I would also think Generation Boomers also because of their age difference over Generation Millenials have more of their larger assets paid for and have more disposable money, and income.

 

[Brains]

I’ll offer this as a counterpoint: The idea that buying a house when younger is ludicrous. Historically it takes about six years just to break even on a house. I don’t know about y’all, but my 20s and 30s were the leanest years income-wise and we were moving every couple of years….no equity can develop in that short of a time span.

Now, if younger people would put just $50 every two weeks into an S&P500 fund for ten years, they’d generate close to $20K; if they can add to that amount with every pay increase and bonus, they could easily generate $30K-$50K towards a down payment, while increasing their earnings and figuring out life.

But *most* would rather have experiences and $5 coffees instead. Priorities.

That depends, I suppose. Both my brother and I bought houses young and I think we both did fine. In my case I sold after a couple years to move to Texas, and got basically what I paid for it. FSBO to a dentist who got it for his girlfriend, he paid all costs.

You hit the nail on the head with the ignorance of youth when it comes to investing though. I wish I would have listened to some advice I'd gotten along the way and put some fun money into a handful of stocks and just let them ride. Just imagine what you'd have if you gambled 100 bucks on a few tech stocks when the internet world was becoming a thing? Google, Yahoo, AOL, etc.

 

[Axxe55]

I think age, wisdom and experience also play a factor in buying a home as well.

 

[bbbass]

Buying young is foolish???

I bought my first spec home in Huntington Beach in 1975 while I was an E2 in the Coast Guard... learned from a fellow that was determined to make millionaires out of as many people as possible. That started a lifetime of flipping and rehabbing houses and buying rental units. In a booming RE market, equity comes quickly and the avg person can buy/inhabit and then move every two years. Conversely, we made flips as quickly as 3 months that gained us $50,000. Never lost money on a house or residential rental property.

My wife put money away into mutual funds every payday all her life. I did some of that, unfortunately not as regularly.

The big problem for us was when we got sucked into investing in pure stocks during a stock market boom. We pulled most of our money out of real estate (stable assets) and invested into single tech stocks (volatile assets). The stocks went down down down as soon as we bought them. Some tech stocks reached almost zero value (Global Crossing), some had to be sold to pay recurring brokerage/mgt fees. Never listen to Motley Fool - the stock advisors!!! It's all a game.

In the long run, we still have enough mutual fund IRA to cover emergencies in our retirement age, but the only real money we ever made was in flipping/rehab.

 

[toddnjoyce]

…gained us $50,000…

Gross or net? 1972 dollars or 2021 dollars?

I’m not arguing that running a business to flip a house, which is what you did can’t be profitable. What I’m arguing is that *most* 20- to 30-somethings don’t have the time, interest, or skills to do that today. They may have one or two, but not all three.

 

[Eli]

I’ll offer this as a counterpoint: The idea that buying a house when younger is ludicrous. Historically it takes about six years just to break even on a house. I don’t know about y’all, but my 20s and 30s were the leanest years income-wise and we were moving every couple of years….no equity can develop in that short of a time span.

Now, if younger people would put just $50 every two weeks into an S&P500 fund for ten years, they’d generate close to $20K; if they can add to that amount with every pay increase and bonus, they could easily generate $30K-$50K towards a down payment, while increasing their earnings and figuring out life.

But *most* would rather have experiences and $5 coffees instead. Priorities.

Most people only stay in their homes around 6 years, and upsize.
The reason for the (now-mythical) 'six-year break-even' is the once-common (and now rare) 'seller contribution' (used to be 3% standard), 6% commissions, 2% closing costs, and 'realistic' interest rates in the 6-8% range meant you started about 11% negative and took years to build any sort of equity.
Take away the seller contribution and you're starting at 8% negative - roughly the rate of inflation last few years - and with interest rates below 4% you're building equity within a couple of years.

Eli

 

[Axxe55]

Gross or net? 1972 dollars or 2021 dollars?

I’m not arguing that running a business to flip a house, which is what you did can’t be profitable. What I’m arguing is that *most* 20- to 30-somethings don’t have the time, interest, or skills to do that today. They may have one or two, but not all three.

Also could be the initiative to put down roots as well. Maybe many of the younger generations are more willing to relocate for job opportunities and advancement that the older generations did.