8 ms·

Housing, Education and Health Care are all insanely unaffordable for the middle class. Eventually the home equity of their parents that has been floating the mi

Housing, Education and Health Care are all insanely unaffordable for the middle class. Eventually the home equity of their parents that has been floating the millennial generation will run out and what happens then?

wrong_variable 11y ago
wouldn't that be transferred to the kids ?
- hardcandy 11y ago
  There is a growing theory that the majority of working middle class retirees will reverse mortgage their homes in retirement in order to supplement their cost of living (and pay inflated nursing home, health care, and end of life costs), leaving their kids with much less than expected inheritance. This would also exacerbate the inequality gap as wealthier families would have no need to go into debt and would rather continue to accumulate assets. Watch for Wall Street and associated marketing channels to put out financial products that make it ''stupid simple'' to qualify for and execute on a reverse mortgage as the start of this trend.
  - FilterSweep 11y ago
    They will also live 10+ more years than projected government estimates, further exhausting Social Security and other benefit programs. It's been well acknowledged in the financial planning world that many will run out of their nest egg halfway through retirement, and die in debt.
  - maxerickson 11y ago
    Easy reverse mortgages are already advertised on TV.
    - kspaans 11y ago
      Yeah I remember seeing them on TV in Canada over 10 years ago.
    - Avshalom 11y ago
      Yeah The Fonz started hawking them about 5 years ago.
- djb_hackernews 11y ago
  Tapping in to a homes equity requires a loan, and yes, those loans will be transferred to their children. EDIT: Yes I meant the loans stay with the estate which services the debtors. The house that is typically handed down to the next generation is now sold to make whole the debt.
  - deleted 11y ago
    [deleted]
  - droffel 11y ago
    Your debts do not pass to your children when you die. The worst that happens is that the debts are paid out of the child's inheritance.
    - pc86 11y ago
      Not always the case. Pennsylvania for example does have filial responsibility laws where under very specific circumstances debt incurred by the parents can be transferred to the children. One example is nursing home/end of life care, regardless of whether or not the child had any role in it. Source: I live in PA. My elderly parents live in PA.
      - beeboop 11y ago
        I looked into this because I thought it was a little odd. The only precedence I can find of this is a single lawsuit, the PDF of which is here: http://www.pacourts.us/assets/opinions/Superior/out/A36025_11.pdf http://www.pacourts.us/assets/opinions/Superior/out/A36025_1... This really doesn't have anything to do with inheritance, especially so since his mother wasn't (and presumably still isn't) deceased. It has to do with some states having laws requiring parents/children, who have the means to do so, to support their child/parent who is poor or otherwise incapable of supporting themselves. In this court case, the child was found to be financially capable and also legally liable for supporting his mother. Because of this, he was found responsible for paying off the debt, but only as he was capable of doing so. If the son in this case only made the national median income, had a large family to support, and didn't have any wiggle room in his budget, he very likely would not have been found liable for this debt.
swsieber 11y ago
Are they though? Defining middle-class might be good as well. A decent home in some parts of Utah is 150-200K. Granted some parts are more expensive. And for a college, BYU runs at about 2.5-3.5K a semester, not all that bad. I managed to work my way through most of college.
- api 11y ago
  But Utah is not on the coast, therefore "nothing happens there" and you can't advance your career (supposedly). The mega-prestige city where you "must be" phenomenon is a major driver here. It's really exploded since roughly 2000. Edit: I think the best way of seeing it is to look at where early PCs came from: MITS Altair: Albuquerque, NM Commodore 64: Philadelphia (metro), PA IBM PC: Miami / Boca Raton, FL CompuColor II (first color home PC): Norcross, GA TRS-80: Fort Worth, TX Apple II: Cupertino, CA Today every single one of those would be from San Francisco or Silicon Valley, because that's where You Have To Be. Seattle I suppose gets an honorary mention, but the rest of the world doesn't exist. The same thing has happened to varying degrees in other industries. Everything has super-concentrated in a handful of super-expensive mostly coastal cities. The rest of the country is a backwater falling into permanent depression.
  - ghaff 11y ago
    Combined with the fact that, for certain demographics, if you can't walk out of your apartment to a hipster coffee shop, life is basically not worth living. (SF pricing issues admittedly extend to the entire Bay, but for many thriving cities, very high prices are mostly a near-in urban phenomenon.)
  - ghaff 11y ago
    The minicomputer industry was more concentrated, especially around Boston (though also Silicon Valley with HP, Rochester MN for IBM and others I'm sure I'm forgetting) but, even then, they were pretty spread out over a fairly large greater metropolitan area and beyond. There are still a lot of tech companies outside of the Valley, including startups. But there's certainly a tendency to concentrate.
  - 11y ago
hardcandy 11y ago
Either laundered foreign money continues to flow into the country and the bubble sustains itself, or the spigot is closed and there is a correction.
ktRolster 11y ago
Housing costs are easy to fix.....it's just a matter of building more housing. Current residents don't want to do that though, so it's just a typical case of entrenched interests against newcomers: story as old as time.
- HarryHirsch 11y ago
  No need to build more housing. Everybody who is priced out of their favourite market, move to Detroit!
  - toomuchtodo 11y ago
    I'm moving to live on a sailboat. You can keep your overly expensive first world land! :D
- graeme 11y ago
  This seems naive. There's only so much land in urban areas, and everyone wants to live there. As population expands, isn't there some kind of mathematical constraint on total possible hoising within a circular area? City centres radiate outwards roughly circularly. More NYC like areas would help, but we can't seem to build those anymore. When existing cities grow they just sort of spread outwards. Edit: Per my comment below, my argument is that as long as we build the way we do, we can't really build our way out of this. Even our "dense" construction isn't really dense once you consider total land use including businesses, offices, etc
  - deleted 11y ago
    [deleted]
  - landryraccoon 11y ago
    > More NYC like areas would help, but we can't seem to build those anymore. That seems like a policy problem. I don't think we're nearly at the point where physics or math is a constraint on how densely we can build.
    - 11y ago
jrnichols 11y ago
My health care costs were almost 50% of what my rent was recently. Seriously.. rent was $590/mo, my ACA plan (with fairly lousy coverage and few doctors that would take it - I lost my original doc) was $290/mo. You're absolutely right. Those three things are spiraling out of control in price. The place I moved out of is now renting for $700.

wrong_variable 11y ago

wouldn't that be transferred to the kids ?

hardcandy 11y ago
There is a growing theory that the majority of working middle class retirees will reverse mortgage their homes in retirement in order to supplement their cost of living (and pay inflated nursing home, health care, and end of life costs), leaving their kids with much less than expected inheritance. This would also exacerbate the inequality gap as wealthier families would have no need to go into debt and would rather continue to accumulate assets. Watch for Wall Street and associated marketing channels to put out financial products that make it ''stupid simple'' to qualify for and execute on a reverse mortgage as the start of this trend.
- FilterSweep 11y ago
  They will also live 10+ more years than projected government estimates, further exhausting Social Security and other benefit programs. It's been well acknowledged in the financial planning world that many will run out of their nest egg halfway through retirement, and die in debt.
- maxerickson 11y ago
  Easy reverse mortgages are already advertised on TV.
  - kspaans 11y ago
    Yeah I remember seeing them on TV in Canada over 10 years ago.
  - Avshalom 11y ago
    Yeah The Fonz started hawking them about 5 years ago.
djb_hackernews 11y ago
Tapping in to a homes equity requires a loan, and yes, those loans will be transferred to their children. EDIT: Yes I meant the loans stay with the estate which services the debtors. The house that is typically handed down to the next generation is now sold to make whole the debt.
- deleted 11y ago
  [deleted]
- droffel 11y ago
  Your debts do not pass to your children when you die. The worst that happens is that the debts are paid out of the child's inheritance.
  - pc86 11y ago
    Not always the case. Pennsylvania for example does have filial responsibility laws where under very specific circumstances debt incurred by the parents can be transferred to the children. One example is nursing home/end of life care, regardless of whether or not the child had any role in it. Source: I live in PA. My elderly parents live in PA.
    - beeboop 11y ago
      I looked into this because I thought it was a little odd. The only precedence I can find of this is a single lawsuit, the PDF of which is here: http://www.pacourts.us/assets/opinions/Superior/out/A36025_11.pdf http://www.pacourts.us/assets/opinions/Superior/out/A36025_1... This really doesn't have anything to do with inheritance, especially so since his mother wasn't (and presumably still isn't) deceased. It has to do with some states having laws requiring parents/children, who have the means to do so, to support their child/parent who is poor or otherwise incapable of supporting themselves. In this court case, the child was found to be financially capable and also legally liable for supporting his mother. Because of this, he was found responsible for paying off the debt, but only as he was capable of doing so. If the son in this case only made the national median income, had a large family to support, and didn't have any wiggle room in his budget, he very likely would not have been found liable for this debt.

swsieber 11y ago

Are they though? Defining middle-class might be good as well. A decent home in some parts of Utah is 150-200K. Granted some parts are more expensive. And for a college, BYU runs at about 2.5-3.5K a semester, not all that bad. I managed to work my way through most of college.

api 11y ago
But Utah is not on the coast, therefore "nothing happens there" and you can't advance your career (supposedly). The mega-prestige city where you "must be" phenomenon is a major driver here. It's really exploded since roughly 2000. Edit: I think the best way of seeing it is to look at where early PCs came from: MITS Altair: Albuquerque, NM Commodore 64: Philadelphia (metro), PA IBM PC: Miami / Boca Raton, FL CompuColor II (first color home PC): Norcross, GA TRS-80: Fort Worth, TX Apple II: Cupertino, CA Today every single one of those would be from San Francisco or Silicon Valley, because that's where You Have To Be. Seattle I suppose gets an honorary mention, but the rest of the world doesn't exist. The same thing has happened to varying degrees in other industries. Everything has super-concentrated in a handful of super-expensive mostly coastal cities. The rest of the country is a backwater falling into permanent depression.
- ghaff 11y ago
  Combined with the fact that, for certain demographics, if you can't walk out of your apartment to a hipster coffee shop, life is basically not worth living. (SF pricing issues admittedly extend to the entire Bay, but for many thriving cities, very high prices are mostly a near-in urban phenomenon.)
- ghaff 11y ago
  The minicomputer industry was more concentrated, especially around Boston (though also Silicon Valley with HP, Rochester MN for IBM and others I'm sure I'm forgetting) but, even then, they were pretty spread out over a fairly large greater metropolitan area and beyond. There are still a lot of tech companies outside of the Valley, including startups. But there's certainly a tendency to concentrate.
- 11y ago

hardcandy 11y ago

Either laundered foreign money continues to flow into the country and the bubble sustains itself, or the spigot is closed and there is a correction.

ktRolster 11y ago

Housing costs are easy to fix.....it's just a matter of building more housing. Current residents don't want to do that though, so it's just a typical case of entrenched interests against newcomers: story as old as time.

HarryHirsch 11y ago
No need to build more housing. Everybody who is priced out of their favourite market, move to Detroit!
- toomuchtodo 11y ago
  I'm moving to live on a sailboat. You can keep your overly expensive first world land! :D
graeme 11y ago
This seems naive. There's only so much land in urban areas, and everyone wants to live there. As population expands, isn't there some kind of mathematical constraint on total possible hoising within a circular area? City centres radiate outwards roughly circularly. More NYC like areas would help, but we can't seem to build those anymore. When existing cities grow they just sort of spread outwards. Edit: Per my comment below, my argument is that as long as we build the way we do, we can't really build our way out of this. Even our "dense" construction isn't really dense once you consider total land use including businesses, offices, etc
- deleted 11y ago
  [deleted]
- landryraccoon 11y ago
  > More NYC like areas would help, but we can't seem to build those anymore. That seems like a policy problem. I don't think we're nearly at the point where physics or math is a constraint on how densely we can build.
  - 11y ago

jrnichols 11y ago

My health care costs were almost 50% of what my rent was recently. Seriously.. rent was $590/mo, my ACA plan (with fairly lousy coverage and few doctors that would take it - I lost my original doc) was $290/mo. You're absolutely right. Those three things are spiraling out of control in price. The place I moved out of is now renting for $700.