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They're causal -- old people predominantly aren't buying new homes or investing in new equities, they collected those assets during their working years when the

They're causal -- old people predominantly aren't buying new homes or investing in new equities, they collected those assets during their working years when they were cheap, and both of those asset classes have appreciated an extraordinary amount since the middle of their working careers.

lapcat 1y ago
> old people predominantly aren't buying new homes What do you mean exactly by buying new homes? Obviously the average length of home ownership for the oldest group would be much longer than for the youngest age group. How new were their homes when they were first purchased, and has that number changed over time? I have no idea. But if the value of older homes is increasing, it means that someone is purchasing those older homes. > or investing in new equities If I'm reading the tables right, it looks like the oldest group received their largest jump in net worth during 2019-2022 and actually did worse than all other groups in 2016-2019.
- kube-system 1y ago
  I mean that older people have a longer duration of time in their current residence. Their homes have had a longer time to appreciate. > If I'm reading the tables right, it looks like the oldest group received their largest jump in net worth during 2019-2022 and actually did worse than all other groups in 2016-2019. I didn't dig into it too much, but the SP500 did better during the former period.
  - lapcat 1y ago
    > Their homes have had a longer time to appreciate. A home doesn't inherently appreciate over time, like a fine wine. Aside from remodeling, the only thing that increases the value of a home over time is increased demand for homes relative to supply, which was my original point: "the price of housing has increased significantly."
    - kube-system 1y ago
      Correct, but in aggregate, (which is what all of these numbers are) they have. > the only thing that increases the value of a home over time is increased demand for homes relative to supply, which was my original point: "the price of housing has increased significantly." At the risk of sounding obvious, yes, the value of housing is directly derived from how the market prices it. When housing prices go up, the net worth of the people who own housing goes up. Most of the time, the prices have been going up. So the people who have the most time in the market are the most to benefit. When boomers were having children, the median home was around $100k. The average boomer who bought a home on a 30yr mortgage, had kids, and is now retiring, has $400k equity.
      - lapcat 1y ago
        > Most of the time, the prices have been going up. That's not particularly interesting though. The rate at which prices go up is crucial, especially in comparison with wages. If the price of housing increases faster than wages, then home buyers will end up with less disposable and investable income than before. We're not talking about why older people are wealthier than younger people. We're talking about why the gap has increased.
        kube-system 1y ago
        Well, any group that owns more of an asset class will experience more of whatever swing in value it experiences, right? Isn't it as simple as that? 80% of boomers have a house, and only 55% of millennials do. If all homes go up by 100%, the average boomer will have 80% more wealth, and the average millennial will only have 55% more wealth. The gap in their wealth will increase.
        lapcat 1y ago
        You seem to be overlooking the elephant in the room, which is that working people add to their wealth via wages, while retired people do not. Again, this is why the inflation rates of housing vs. wages is crucial.
ahmeneeroe-v2 1y ago
>old people predominantly aren't buying new homes This is not true at all. People over 60 bought ~46% of homes. https://www.nar.realtor/research-and-statistics/research-reports/home-buyer-and-seller-generational-trends https://www.nar.realtor/research-and-statistics/research-rep...
- kube-system 1y ago
  Fair, but most of them are cashing in equity in a previously owned home to buy into a new place, so those wouldn't be contributing to the aforementioned increase in wealth.
  - ahmeneeroe-v2 1y ago
    Great point.

lapcat 1y ago

> old people predominantly aren't buying new homes What do you mean exactly by buying new homes? Obviously the average length of home ownership for the oldest group would be much longer than for the youngest age group. How new were their homes when they were first purchased, and has that number changed over time? I have no idea. But if the value of older homes is increasing, it means that someone is purchasing those older homes. > or investing in new equities If I'm reading the tables right, it looks like the oldest group received their largest jump in net worth during 2019-2022 and actually did worse than all other groups in 2016-2019.

kube-system 1y ago
I mean that older people have a longer duration of time in their current residence. Their homes have had a longer time to appreciate. > If I'm reading the tables right, it looks like the oldest group received their largest jump in net worth during 2019-2022 and actually did worse than all other groups in 2016-2019. I didn't dig into it too much, but the SP500 did better during the former period.
- lapcat 1y ago
  > Their homes have had a longer time to appreciate. A home doesn't inherently appreciate over time, like a fine wine. Aside from remodeling, the only thing that increases the value of a home over time is increased demand for homes relative to supply, which was my original point: "the price of housing has increased significantly."
  - kube-system 1y ago
    Correct, but in aggregate, (which is what all of these numbers are) they have. > the only thing that increases the value of a home over time is increased demand for homes relative to supply, which was my original point: "the price of housing has increased significantly." At the risk of sounding obvious, yes, the value of housing is directly derived from how the market prices it. When housing prices go up, the net worth of the people who own housing goes up. Most of the time, the prices have been going up. So the people who have the most time in the market are the most to benefit. When boomers were having children, the median home was around $100k. The average boomer who bought a home on a 30yr mortgage, had kids, and is now retiring, has $400k equity.
    - lapcat 1y ago
      > Most of the time, the prices have been going up. That's not particularly interesting though. The rate at which prices go up is crucial, especially in comparison with wages. If the price of housing increases faster than wages, then home buyers will end up with less disposable and investable income than before. We're not talking about why older people are wealthier than younger people. We're talking about why the gap has increased.
      - kube-system 1y ago
        Well, any group that owns more of an asset class will experience more of whatever swing in value it experiences, right? Isn't it as simple as that? 80% of boomers have a house, and only 55% of millennials do. If all homes go up by 100%, the average boomer will have 80% more wealth, and the average millennial will only have 55% more wealth. The gap in their wealth will increase.
        lapcat 1y ago
        You seem to be overlooking the elephant in the room, which is that working people add to their wealth via wages, while retired people do not. Again, this is why the inflation rates of housing vs. wages is crucial.

ahmeneeroe-v2 1y ago

>old people predominantly aren't buying new homes This is not true at all. People over 60 bought ~46% of homes. https://www.nar.realtor/research-and-statistics/research-reports/home-buyer-and-seller-generational-trends https://www.nar.realtor/research-and-statistics/research-rep...

kube-system 1y ago
Fair, but most of them are cashing in equity in a previously owned home to buy into a new place, so those wouldn't be contributing to the aforementioned increase in wealth.
- ahmeneeroe-v2 1y ago
  Great point.