2 ms·

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 dema

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.
    - kube-system 1y ago
      Some of them do. Wage earners are not necessarily cash flow positive nor putting money toward hard assets. Plenty of people out there are renting, spending, and not saving. IIRC there's also a good bit of evidence to show that later generations are not saving nearly as much as older generations.
      - lapcat 1y ago
        The price of renting is not unrelated to the price of buying. If homes are too expensive or unavailable for purchase, then the rental market will experience high demand, because people have to live somewhere. Buyers and renters may be cash negative for the same reason.

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.
  - kube-system 1y ago
    Some of them do. Wage earners are not necessarily cash flow positive nor putting money toward hard assets. Plenty of people out there are renting, spending, and not saving. IIRC there's also a good bit of evidence to show that later generations are not saving nearly as much as older generations.
    - lapcat 1y ago
      The price of renting is not unrelated to the price of buying. If homes are too expensive or unavailable for purchase, then the rental market will experience high demand, because people have to live somewhere. Buyers and renters may be cash negative for the same reason.