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It was pretty much a "screw you" to young people. Home ownership rates for 65+ year olds is nearly 80%. For 45-54 year olds, its 70%. Statistically, if you wer

by spaceman_2020 4y ago

It was pretty much a "screw you" to young people. Home ownership rates for 65+ year olds is nearly 80%. For 45-54 year olds, its 70%. Statistically, if you were 45 years old, you likely benefited a great deal from the pandemic. My brother is in that age group. He bought his house for 380k. It's now valued at 750k. He works in tech so his salary increased from 120k to 180k. He refinanced his mortgage at 2.5% and pays iirc ~1100/month. It's the same story for all of his friends.

soperj 4y ago
> Home ownership rates for 65+ year olds is nearly 80%. Pretty sure most of those people are mortgage free.
- acchow 4y ago
  Many people move multiple times in their lives. People also take out additional loans on their homes down the line to do remodels/renovations
- jbay808 4y ago
  When rates fall, prices for assets like homes tend to rise in proportion shortly after, such that the cost to borrowers is approximately constant. The benefit of falling rates goes more to homeowners than new borrowers, even if they don't have mortgages.
- spaceman_2020 4y ago
  And now their fully-owned houses are worth 1.5-2x compared to 2019.
- nly 4y ago
  Which is even better. They could take out equity release and spend what they borrowed.
  - jjav 4y ago
    But of course if you refinance to take equity out, now you're back to having a monthly mortage payment again. If you do it today, it will be a high interest mortage. If you're over 65 (as OP mentioned) you're probably soon retiring, so this would be a very bad financial move.
    - spaceman_2020 4y ago
      are reverse mortgage interest rates fixed or variable? If they are fixed, anyone who refinanced in 2021 when rates were dead cheap and prices were sky high made out like bandits
      - jjav 4y ago
        A cash-out refinance (what people would most commonly do in this circumstance) is just a regular refinance, so terms could be anything a refinance can have. Usually fixed rate 30yr. A reverse mortgage is a different thing, IMO always a bad deal but I guess could be ok in some cases.
tootie 4y ago
If you're ascribing that level of intent to the Fed, then what do you say about the current situation? As someone trying to sell my home right now, I can tell that the massive bull run in equity is almost gone already. We issued massive fiscal and monetary stimulus in the face of the steepest recession in history and successfully forestalled economic catastrophe. With the cost being a wild ride for assets and prices that will certainly taper off in the near future. Small price to pay if you ask me. As someone who's lost a ton of (purely notional) net worth in the last year, I think policy makers are doing a really good job. If you look at the alternative. The ones who said let's keep schools and businesses open during a pandemic and let people die to keep the economy humming along, I'd say we took the right path.
- saiya-jin 4y ago
  I agree with you, but we had been incredibly lucky with the way covid mutated into much weaker omicron so quickly (no, we didn't get permanent antibodies that can handle it all from now on forever, most folks have almost 0 of those now if they only got vaccines and no real infections). If it mutates back into more morbidity, we will be in much worse position since I don't think we will have a realistic option to repeat that stimulus without plunging whole world into (not only) economic chaos.

soperj 4y ago

> Home ownership rates for 65+ year olds is nearly 80%. Pretty sure most of those people are mortgage free.

acchow 4y ago
Many people move multiple times in their lives. People also take out additional loans on their homes down the line to do remodels/renovations
jbay808 4y ago
When rates fall, prices for assets like homes tend to rise in proportion shortly after, such that the cost to borrowers is approximately constant. The benefit of falling rates goes more to homeowners than new borrowers, even if they don't have mortgages.
spaceman_2020 4y ago
And now their fully-owned houses are worth 1.5-2x compared to 2019.
nly 4y ago
Which is even better. They could take out equity release and spend what they borrowed.
- jjav 4y ago
  But of course if you refinance to take equity out, now you're back to having a monthly mortage payment again. If you do it today, it will be a high interest mortage. If you're over 65 (as OP mentioned) you're probably soon retiring, so this would be a very bad financial move.
  - spaceman_2020 4y ago
    are reverse mortgage interest rates fixed or variable? If they are fixed, anyone who refinanced in 2021 when rates were dead cheap and prices were sky high made out like bandits
    - jjav 4y ago
      A cash-out refinance (what people would most commonly do in this circumstance) is just a regular refinance, so terms could be anything a refinance can have. Usually fixed rate 30yr. A reverse mortgage is a different thing, IMO always a bad deal but I guess could be ok in some cases.

tootie 4y ago

If you're ascribing that level of intent to the Fed, then what do you say about the current situation? As someone trying to sell my home right now, I can tell that the massive bull run in equity is almost gone already. We issued massive fiscal and monetary stimulus in the face of the steepest recession in history and successfully forestalled economic catastrophe. With the cost being a wild ride for assets and prices that will certainly taper off in the near future. Small price to pay if you ask me. As someone who's lost a ton of (purely notional) net worth in the last year, I think policy makers are doing a really good job. If you look at the alternative. The ones who said let's keep schools and businesses open during a pandemic and let people die to keep the economy humming along, I'd say we took the right path.

saiya-jin 4y ago
I agree with you, but we had been incredibly lucky with the way covid mutated into much weaker omicron so quickly (no, we didn't get permanent antibodies that can handle it all from now on forever, most folks have almost 0 of those now if they only got vaccines and no real infections). If it mutates back into more morbidity, we will be in much worse position since I don't think we will have a realistic option to repeat that stimulus without plunging whole world into (not only) economic chaos.