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Disagree. Millennials have never known different until very recently. To them, housing wasn't something that appreciated at all. In fact, it's so common for

Disagree. Millennials have never known different until very recently. To them, housing wasn't something that appreciated at all. In fact, it's so common for millennials to say things like, "just waiting on another housing bust." It's like they think 2008 was come cyclical event that you just need to wait another year for. I held a similar attitude towards housing and rented throughout my 20s because every single homeowner I knew bitched about how buying a house was a loss for them. People didn't make money on houses outside of rich coastal cities. Heck, I'm trying to unload a parent's home and they are disappointed that the house they lived in for 16 years has only appreciated by maybe $10k. Covid was the when young people outside of NYC and Cali learned that it is smart to get into the housing market earlier, rather than later.

gilbetron 4y ago
I don't understand. Housing has been going up steadily for the past decade. 2007-2010ish was the only time it decline, and 2018-2019 had a flat region for some places (not where I live though). https://fred.stlouisfed.org/series/MSPUS https://fred.stlouisfed.org/series/MSPUS
- lotsofpulp 4y ago
  The disconnect is because there are very large regions of the US where land price had stagnated or even went down in price for the past few decades, but there are also very large regions of the US where land price increased or skyrocketed. Many people experienced different things. Of course, the regions where most people were moving to and where most house sales occurred experienced higher land prices, but the regions where land price was stagnating or declining would have fewer sales in the first place and hence not reflect in the data, but the people there would still be experiencing it. So you just have large numbers of people experiencing different price movements depending on where they live.
- mywittyname 4y ago
  Because you're looking at the USA market as a whole. The regional view tells a much better story because then you don't have movement in one region offset that of other ones. https://fred.stlouisfed.org/graph/?id=MSPNE,MSPMW,MSPS,MSPW https://fred.stlouisfed.org/graph/?id=MSPNE,MSPMW,MSPS,MSPW, You can pretty clearly see that most regions there were long periods of housing stagnation and decline, followed by quick price jumps, then back to stagnation. And look at how wildly the NE region fluctuates. It regularly moves 10% up or down in any given year. And sometimes much more, prices moved from $403k to 566k in one year (2016->2017). Whether you did well or not in your housing purchase comes down to luck. Yeah, in aggregate, over long enough time periods, housing does well. But your individual situation will vary dramatically.
BlargMcLarg 4y ago
Can't speak for the US, but here, the mentality was always "trending up with highs and lows" which caused people to believe waiting was better after several years of increases, not the idea that housing didn't appreciate in the long term. Along with record appreciation, people didn't just think it would crash eventually, but it was downright necessary for most to buy.
sumtechguy 4y ago
This depends on your local market. Where I used to live I saw a sideways on my home price for nearly a decade. I watched other larger markets going up YoY. Your market conditions will probably be different than others. My parents bought a house in the early 70s. They paid about 12,000 for it. That same house now is being appraised at about 210k. However, if they sold they could take that money and buy a comparable house for about 210k. Housing is a good hedge for inflation. It is a mediocre investment vehicle, unless you happen to win the live somewhere where supply is not where it needs to be lottery. I bought my house and paid for it as quick as I could. The saving on the rent alone was worth it to me in my area vs the cost of the house.
- rdtwo 4y ago
  Yeah it seemed like a prudent idea but I’m sure you missed out on a lot of potential value now
  - sumtechguy 4y ago
    Potential value is the key term here. Or as a old saying says "a bird in the hand is worth two in the bush". I am well into 7 figures on wealth instead of low to mid six figures in debt. You can play debt in that way. But it is risky and has lead many to ruin. However I traded debt for a reliable income at a fixed pace that was well above my spend level. I curb stomped all of my debt own a nice house, nice car and paid for with no debt. Debt is thief of your future potential. Debt can be used for that sort of thing but you have to use it extremely carefully. Most people dont. I was not among the gifted of picking the right things to invest in. I also know to almost the penny the potential I lost. Because hindsight is 20/20. It is nearly identical to what I have. Because I basically became the lender instead of the borrower. Debt is now a tool for me instead of a worry.
- bombcar 4y ago
  It is an insane investment vehicle if you keep using the leverage and prices are going up faster than inflation (which is part of the problem). Arguably they might not be going up much more than inflation once you calculate all the various new requirements for new buildings, but it's still a problem. In absolute long terms, housing can't become completely unaffordable.

gilbetron 4y ago

I don't understand. Housing has been going up steadily for the past decade. 2007-2010ish was the only time it decline, and 2018-2019 had a flat region for some places (not where I live though). https://fred.stlouisfed.org/series/MSPUS https://fred.stlouisfed.org/series/MSPUS

lotsofpulp 4y ago
The disconnect is because there are very large regions of the US where land price had stagnated or even went down in price for the past few decades, but there are also very large regions of the US where land price increased or skyrocketed. Many people experienced different things. Of course, the regions where most people were moving to and where most house sales occurred experienced higher land prices, but the regions where land price was stagnating or declining would have fewer sales in the first place and hence not reflect in the data, but the people there would still be experiencing it. So you just have large numbers of people experiencing different price movements depending on where they live.
mywittyname 4y ago
Because you're looking at the USA market as a whole. The regional view tells a much better story because then you don't have movement in one region offset that of other ones. https://fred.stlouisfed.org/graph/?id=MSPNE,MSPMW,MSPS,MSPW https://fred.stlouisfed.org/graph/?id=MSPNE,MSPMW,MSPS,MSPW, You can pretty clearly see that most regions there were long periods of housing stagnation and decline, followed by quick price jumps, then back to stagnation. And look at how wildly the NE region fluctuates. It regularly moves 10% up or down in any given year. And sometimes much more, prices moved from $403k to 566k in one year (2016->2017). Whether you did well or not in your housing purchase comes down to luck. Yeah, in aggregate, over long enough time periods, housing does well. But your individual situation will vary dramatically.

BlargMcLarg 4y ago

Can't speak for the US, but here, the mentality was always "trending up with highs and lows" which caused people to believe waiting was better after several years of increases, not the idea that housing didn't appreciate in the long term. Along with record appreciation, people didn't just think it would crash eventually, but it was downright necessary for most to buy.

sumtechguy 4y ago

This depends on your local market. Where I used to live I saw a sideways on my home price for nearly a decade. I watched other larger markets going up YoY. Your market conditions will probably be different than others. My parents bought a house in the early 70s. They paid about 12,000 for it. That same house now is being appraised at about 210k. However, if they sold they could take that money and buy a comparable house for about 210k. Housing is a good hedge for inflation. It is a mediocre investment vehicle, unless you happen to win the live somewhere where supply is not where it needs to be lottery. I bought my house and paid for it as quick as I could. The saving on the rent alone was worth it to me in my area vs the cost of the house.

rdtwo 4y ago
Yeah it seemed like a prudent idea but I’m sure you missed out on a lot of potential value now
- sumtechguy 4y ago
  Potential value is the key term here. Or as a old saying says "a bird in the hand is worth two in the bush". I am well into 7 figures on wealth instead of low to mid six figures in debt. You can play debt in that way. But it is risky and has lead many to ruin. However I traded debt for a reliable income at a fixed pace that was well above my spend level. I curb stomped all of my debt own a nice house, nice car and paid for with no debt. Debt is thief of your future potential. Debt can be used for that sort of thing but you have to use it extremely carefully. Most people dont. I was not among the gifted of picking the right things to invest in. I also know to almost the penny the potential I lost. Because hindsight is 20/20. It is nearly identical to what I have. Because I basically became the lender instead of the borrower. Debt is now a tool for me instead of a worry.
bombcar 4y ago
It is an insane investment vehicle if you keep using the leverage and prices are going up faster than inflation (which is part of the problem). Arguably they might not be going up much more than inflation once you calculate all the various new requirements for new buildings, but it's still a problem. In absolute long terms, housing can't become completely unaffordable.