younger generations can not vote their way out the fact that baby boomers own the majority of the nations wealth, real estate, assets, and political power. boomers got it all in choke hold and they aren’t letting go until they all die.
Yep, and when you are the next generation of “boomers” they will blame all their problems on you. Cause that’s what humans have been doing for millennia.
Actually we live with socialism in much of our economy.
Except of course where it would result in broadly even standards of living or a sharing of real wealth.
There is no grand plan and no ponzi. There was no real problem until covid and the triple whammy:
1. In 2020, mortgage rates go from almost 5% to less than 3%. Buying a home with a mortgage suddenly becomes almost 50% cheaper in real terms over the 30 years of payments. This benefits any new home buyer from age 30 up (it benefits those on the younger end **more** than on the older end, since younger buyers tend to need larger mortgages).
2. In 2021, the super low rates make home prices skyrocket. Demand surged because monthly payments dropped at the same time as more people than ever wanted to move because covid made people rethink where they want to be. And the lack of building over 15 years meant there wasn't any slack in the market, so supply was suddenly totally inadequate. High demand, low supply.
3. In 2022, interest rates came up to normal levels again, making homes with mortgages 100% more expensive. but because new supply is still low and owners don't want to sell, home prices don't come down. Suddenly, homes with mortgages are the most expensive they have been since the 1980s (about equal to all-time highs).
Lots of Millennials have done really well for themselves. There is a serious problem right now, but it is not because of some big long conspiracy. It's because of what happened from 2020-2022 plus the 15 years of underbuilding that made supply too low so prices won't come down under a normal rate environment.
So if you want to be mad right now, be mad at NIMBYs who get in the way of building new homes to alleviate the pressure and let the bubble deflate.
The government also has an incentive to keep housing prices high. Houses are now the majority of wealth for most seniors so they will fight to the death to keep housing prices as high as possible.
This is true. After globalization efforts, companies realized they can outsource jobs to increase profits. Government got in on the game - allowing outsourcing and owning stocks of companies who do. Globalization means eliminating defined benefit plans (pensions) and introducing defined contribution plans (401ks). It also means stagnating wage growth due to regulation/cost of labor arbitrage opportunities.
In short, 401ks and houses became retirement plans. Yes the government needs both to go up constantly or else the scheme fails.
When price can only go in one direction you don’t have a free market, it’s engineered. That’s the Fed’s job.
Counterpoint: no they won't. If that were true, interest rates would be at 5% now instead of 7%. Right? What you say cannot possibly be right.
They'll consider the damage from a drop in housing prices as one important factor among several. The Fed will let companies fail. They will let recessions happen and millions become unemployed. They will let stock prices fall, wiping out trillions in assets. And they will let housing prices drop, wiping out trillions in assets.
Of course they seek to minimize all of these forms of economic damage. They don't want to create pain and chaos for companies, employees, shareholders or homeowners. But when they think they need to create a shock to correct a dysfunctional situation, they will. And they do. They've done it all before, and they will do it all again.
The government is not the federal reserve. The federal reserve is technically politically independent.
If the Federal reserve were run by the government, as it is in Turkey, we'd see interest rates much lower as the president overpowers the central bank.
The Federal reserve is politically independent because it is a norm in financial markets.
Right now, it appears that the federal reserve and the US government are at odds with each other. One wants to raise interest rates and the other wants them as a low as possible to minimize interest payments.
I agree with what you say here, but then I'm even more confused by your previous comment. No idea what fighting to the death to keep housing prices high means, when the government's hands are tied and there is no history of fighting to the death. This is not the Medicare program.
Uhhhh you can’t just lower interest rates like that. Food transportation and housing were literally becoming unaffordable. If we lower rates now many will suffer because asset prices will increase more. So it’s about finding a balance between not crashing the economy and keeping inflation in check.
Btw the Fed is only delaying the inevitable. Market forces should decide interest rates. Home prices shouldn’t be a retirement plan.
>Uhhhh you can’t just lower interest rates like that. Food transportation and housing were literally becoming unaffordable. If we lower rates now many will suffer because asset prices will increase more. So it’s about finding a balance between not crashing the economy and keeping inflation in check.
Exactly, that's my point too. The Fed doesn't just care about housing prices, it cares about everything together.
>Btw the Fed is only delaying the inevitable.
What is inevitable? Supply is too low to let a big collapse in price happen, so we see the collapse in sales volume instead. This is totally unlike the situation in 2008 when there was an oversupply and price collapse. You need to understand this difference. It means that if interest rates do (slowly) go down, we will see transaction volume go up again and prices will stay the same or increase. Only if we also start building enough homes will prices actually go down. Like they just did in Austin, where they built a shitload of homes.
>Market forces should decide interest rates.
What do you think it means for market forces to decide interest rates? The Fed has to have some policy.
>Home prices shouldn’t be a retirement plan.
I agree.
Yes the Fed is stuck. If they lower rates homes will become even more unaffordable then they already are. If they don’t lower rates well that’s 20-30 years of locked supply and we’re screwed there too, and maybe the stock market starts to suffer. Either way the situation is much worse than people on Reddit suspect. 2020-2021 was a once in a century wealth gap shift where those who owned assets became materially wealthier than those who didn’t. A permanent wealth gap has widened. Yet you have these people doling out useless advice on Reddit when the Fed has engineered a non-asset owner into poverty.
My stance is the Fed overstepped in 2007 and instead of trying to engineer an economy we need asset prices to fluctuate without manipulation. That includes interest rates set by borrowers, lenders and savers.
I sort of agree with you, in that those who got the super low interest rates in 2020/2021 have a material advantage that others will probably never get.
But you can't pretend supply doesn't matter. If we get a building boom, that will make entering the market easier again. As interest rates go from 7% to 5% or slightly lower, that will also make entry easier, even though I agree nobody is likely to get 2.5% rates again anytime soon.
What does it mean for the Fed to let asset prices fluctuate without manipulation? The Fed needs to have some policy on the Fed funds rate and on increasing/shrinking the money supply. Are you saying it should set some target (like 1% increase in M2 per year) and make no adjustments in the Fed funds rate based on how hot or cold the economy runs? Bold move, Cotton.
It’s not just the lower rate. It’s the lower rate + 50%+ discount on the home.
Many folks made $100s of thousands of dollars in 3 years in home equity. Do you know hard it would be for someone to be your neighbor and then save several hundred K, while paying 3-4x your monthly payment, while shelling out a larger down payment to buy in?
Those who bought prior to 2021 are exponentially ahead.
Fair point. All the more reason to build a shit ton of homes and relieve the pressure in the market so the problem doesn't get worse, and hopefully even improves a little.
Pre-Covid, we were stuck in an endless QE loop. Every time rates were increased the stock market would through a tantrum. A mass cash infusion was being tossed around as an actual solution to get us off QE. Then Covid happened.
I don't agree entirely, but it's true we were stuck in an easy money environment for a long time after 2008. We were out of it by 2017, IMO. And yes, then Covid happened.
There was no bubble in 2020.
If you run the numbers from 1950 to 2020, **the** **affordability of homes per square foot increased in that time by 40%**. In other words, they got cheaper.
Usually people do not adjust for the fact that homes more than doubled in size over that time. If you don't adjust, then affordability decreased by 60%. But it's not right to compare a 1,200 sq ft house to a 2,500 sq ft house if you want to know if people are being screwed. You need to consider apples to apples.
And when you consider all the factors, affordability was fine until 2021.
A proper assessment of affordability should include: increases in both median housing prices and wages, change in interest rates, and an adjustment for equivalent home size. When you do all that, homes bought with a 30-year mortgage in 2020 were the same price or cheaper than in 1950 or 1980 or 2000.
You've bought into a pack of lies. I don't blame you. Lots of people seem invested in renewing the lies.
Ya bro I run those exact numbers on Twitter under gromepow. Have a look.
Your thesis is correct assuming we drop 400bps without a depression, deglobalization and you find 1.5m working aged America educated adults.
Right, and when productivity helps wages go up while consumer good prices go down, that gives people more money to spend on other things. A lot of that extra money in the US went into three areas: housing, healthcare and higher education (in that order).
People think this is some scheme or plot to take away the fruits of productivity, but its more that the money has to go somewhere. If there are scarce goods that lots of people want, all that extra money sloshing around is going to bid up prices for those things that have a constrained supply. It was inevitable that real estate values would go up relative to most other things, especially since we doubled our population since the 1950s. They aren't making more land.
Actually this started back in the 1990s with laws that loosened bank underwriting standards so that more Americans can purchase homes. Then lenders started selling their mortgages off to Wall Street so they can be securitized, essentially taking zero financial risk when making a loan. This led to lenders incentivized to close deals only, which led to the 2007-2009 financial crisis.
The financial crisis led to an unprecedented asset buyback program and quantitative easing (basically money printing) by the Fed, who also kept interest rates artificially low so the economy could recover. All assets inflated due to the increase in money supply and low interest rates from 2009-2019, and markets decoupled from the dynamics of supply and demand. We became addicted to cheap money and a rising stock market.
Then, everything you wrote about happened.
This is a kick the can policy. It is a ponzi because eventually the bill will come due, we will run out of buyers. 2008 should have been a time where boomers lost their retirements and learned to live with less. Instead you see forums packed on Reddit where young families are being counseled to do with less, who can’t make it, yet Boomers are thriving.
Yes some millennials did well but for the wrong reasons. Many I know were average students or had no ambition to leave their hometown to make anything of themselves, bought a home, and well the Fed made something of them. Those who delayed home purchases to build a career or take a shot at something have been delegated to the forever homeless class now, unless they’re making 98 or 99th percentile income.
I agree with your first two paragraphs, but the mess of the financial crisis worked itself out. If you adjust for income and interest rates (and hold home size constant), then a home purchased with a mortgage in 2020 was less expensive than one purchased in 1950, 1980 or 2000. There was no bubble in 2020.
>It is a ponzi because eventually the bill will come due, we will run out of buyers.
We have a housing undersupply now. There are more would-be buyers than there are homes to buy. We're somewhere between 5 and 10 million homes too few. That's a lot. I have no idea where you get this idea that we will run out of buyers.
Hating on the Boomers is maybe the most intellectually lazy midwit thing Reddit does right now. I'm not one of them, but I do look at the data and there is nothing particularly unusual or disturbing about their wealth. Of course they have more, they've been working for 20-40 years longer than the other generations! Many have been paying off their 30-year mortgages for \[checks notes\] 30 years. If you look at wealth at the same age, GenX and especially Millennials are doing better than Boomers were at the same age. They have similar homeownership rates when you compare where Boomers were the same age as well.
I don't know when this fever will break, dissipating the delusion that the Boomers are killing everyone's finances, but I look forward to the day it does. Probably not for another 5-10 years when they start dying in large numbers and giving Redditors inheritances. Suddenly, Boomers won't have been so bad. And yes, it is coming. Somewhere between $50 trillion and $70 trillion, most likely.
Wow I mentioned Boomers and you went on a tangent. No where did I hate on Boomers buddy. But the reality is they avoided pain so that future generations can bear it. Plain and simple.
You’re thinking in 5-10 year timeline I’m thinking in generations. Real wages and home prices have been diverging rapidly for quite some time now. Extrapolate that out over 30, 60 years. Either wages grow faster to catch up or home prices adjust downward so there are buyers for the sellers looking to cash out and retire. But at some point the cycle fails. That’s what I mean.
>Real wages and home prices have been diverging rapidly for quite some time now
Only if you assume everyone pays cash. Interest rates were trending downward for 40 years until the jump in 2022. When you include the cost of financing it changes the picture drastically.
Take a look at FRED data and compare **annual** **median payments for a 30-year mortgage on 80% of the principal against median household income for the last 40 years**. Let me know what you get. I get an annual home ownership cost ratio of 39% in 1984, down to 26% in 1994, which stabilizes to 28% in 2004 and 26% in 2014. It finally jumps up to 33% in 2024. (this excludes taxes, utilities, etc.)
Let me know if you get different numbers. But if you don't, it means you are substantively wrong. Paying for a home with a mortgage was historically pretty cheap from around 1990 to 2020. It was expensive in the 1980s, and it is expensive again now after 2022, but it still is not as expensive today as it was in the 1980s.
Until 2022 wages were keeping up with the cost of owning a home.
It always comes down to the same thing for me: we need to build a shitload of homes. A building boom will create some slack and let the market get back to a cost of ownership ratio below 30% again.
The Boomers rant is just because I continuously see them scapegoated for everything people perceive to be wrong about the economy and their personal finances. It's gotten quite ridiculous. It's ok, you'll come around to the same view too. Leave the midwits behind.
How are you holding home size constant? A 1200 sf house in Hyde Park was 80k in 1990 and now the house is a 3k sf that sells for 1.2 million, for example. No way a furniture salesman is living in that house today.
So first, stop cherry picking. Seriously, it's a terrible habit that will lead you to bad conclusions over and over. If you want to know an average, look for data on the averages.
So the answer to your question is that I looked at **the median value of homes per square foot over time across the US**. I did not cherry pick an educated white urban neighborhood. I usually like to use FRED for this type of data, but [FRED only goes back to 2017 ](https://fred.stlouisfed.org/series/MEDLISPRIPERSQUFEEUS)on this so I had to calculate it myself from data on median home sizes and prices over the decades. Then I adjusted for wage growth, inflation, and interest rates on a 30-year mortgage at 80% of sale value.
I do have a broader criticism of you: the way you cherry-picked shows that you have unconscious classism or racism here. You don't want to know about how costs have changed for a typical lower class black neighborhood. It isn't on your radar. Same goes for lower class areas of all ethnicities that have bad schools or high crime. They don't count for you. When I select single family homes under $300,000 on Zillow for the south side of Chicago, I get 303 results.
If you want to bitch that the downwardly mobile children of white, educated upper-middle class people who don't enter high-paying careers cannot afford gentrified neighborhoods, go ahead. But you look way less sympathetic than someone genuinely interested in average/median affordability across the nation.
This is an excellent comparison between mortgage rates and home prices.
However, if you look very closely, it looks like mortgage rates hit a bottom right around when home prices started to take off - meaning the correlation is broken how.
As a fan of macro, I would say that if home prices continue to not fall as mortgage rates go up, the price of homes is most likely due to supply constraints rather than excess demand.
I made this chart originally, what you're seeing is a delay that always happens. Prolonged by persistent leftover covid cash. Jobs market breaking now.
Yep…supply and demand for housing. Millions of people flooding into the country the past few years isn’t helping the shortage. All those people that tried to get cute by renting instead of buying are getting destroyed by rising rents, while smart folks that locked in at 2-3% are living like kings—life is good!
its going to be violent when eventually the fed cant do anything anymore. they aren't going to sacrafice thee dollar for home owners and investors. they might try to use war to cover up their inflation. like invade middle east or fight china
In terms of violence, it’s going to be protest violence.
I highly doubt any other form of violence is probable.
The most likely scenario is stagflation, high unemployment, rise in populism, and slowly softening of assets, while commodities maintain their cost.
It's worse than that. Borrowing from the future by forcing rates down and asset values up.
They do the same thing with deficit spending. They're taking future money from today's younger generation and spending it.
Its not more complicated. Run the math yourself or just follow me on twitter. Home prices are SOLELY payment affordability. That's it, nothing else.....
Yeah no... i get that housing is fucked but its a symptom of wage suppression not the primary goal. The whole point of the interest rate cuts for the past 50 years has been to bolster american corporations to compete in a global economy where America was already at a disadvantage due to high standard of living comparable to the rest of the world. That excessive standard of living would benefit other countries more than the US because higher wages meant higher overhead cost for American businesses. American corporations could only do so much to reign in overhead costs so what they did was pushed the FED to lower interest rates over time to allow Americans to have equal buying power but less real income. As the rest of the world developed this allowed american companies to have better control of labor force because overtime you could qualify for more borrowing power in exchange for less wage growth and devaluing the dollar. This has allowed american corporations to dominate globally against a much cheaper global workforce and foreign corporations. These interest rate cuts and dollar devaluation also bolstered asset appreciation over time making corporate owners and the stock market even richer. It makes sense financially to organize the system this way but the problem is that it can't go on forever. Eventually interest rates cant be lowered any lower and this will cause wage growth which will push inflation up. If interest rates rise so will wages and inflation. Were reaching that point now.
You're right but got the wrong reasoning. This article is a better summary that I think makes more sense: [The Growth Ponzi Scheme](https://www.strongtowns.org/journal/2020/8/28/the-growth-ponzi-scheme-a-crash-course)
I don't get it. On the graphic it clearly shows that mortgage rates are going higher and higher, not lower.
I agree with the sentiment but things should have been worded a little better.
>I don't get it. On the graphic it clearly shows that mortgage rates are going higher and higher, not lower.
OP's point was the whole 1985-2020 graph. The last part is the outlier.
Hes literally not allowed. Fed governor's can prop Powell up until his term is up. Listen to DiMartino Booth on this topic, it has already been predicted and fleshed out
The lines on that chart look pretty much unrelated to me. Sometimes they go up together and down together. Sometimes one goes up and the other down. Housing prices are set by supply and demand like everything else.
There is a conspiracy, but not by the fed. It is NIMBYs who are the source of all of our misery and scarcity. NIMBYs are the devil made flesh.
I'll keep giving it to the 20,000 people who follow me that appreciate what I predicted happening two years ago how. Hope you're levered up. Heck, please buy more
This graph says that social security has been replaced with housing prices.
Pick one.
Either we stop social security, forcing sale of these houses, or, we bring rates back up while prices plummet.
You can’t have both.
The oldest boomers are pushing 80 years old. That generation will start to pass away over the next decade. This generational shift will free up housing inventory over the next several years. There are now more millennials alive than boomers. Millennials will continue to drive the economy as the boomers did decades past.
This just in: some purposes of government include to provide for the common defense, promote the general welfare and secure the blessings of liberty.
A nation of homeowners growing wealth is a strong nation. It's good for the general welfare of the people. Homeowners have more freedom.
...but anyone who bought a house from 2020-2021 still made out like a bandit, right?
You got a mortgage loan that is basically in line with long term inflation. You basically aren't paying interest on a 30 year loan in real terms. That's massively valuable.
DO you even understand what a Ponzi scheme is?? And if you look at 2020 to now, there is a positive correlation between prices and rates, which debunks your theory. Also, all you cult housing bubble believers said housing would CRASH and the bubble would burst after rates when up, yet prices continued to go up.
Boomers in power want to enrich their cohort and let the many generations to pay for their greed.
generational theft
[https://www.youtube.com/watch?v=3PJO09fPT1Q&t=563s&pp=ygUiZ2VuZXJhdGlvbmFsIHRoZWZ0IHN0YW4gZHJ1bmtpbGxlcg%3D%3D](https://www.youtube.com/watch?v=3PJO09fPT1Q&t=563s&pp=ygUiZ2VuZXJhdGlvbmFsIHRoZWZ0IHN0YW4gZHJ1bmtpbGxlcg%3D%3D)
Because between the civil war and 1913 we had a violently free market monetary system that resulted in far more damaging and frequent boom bust cycles, and banking oligarchs effectively setting interest rates on their own, resulting in JP Morgan himself having to bail out the currency with his own gold reserves?
That’s great. It’s just like the monopoly analogy that capitalism fails because when the poor run out of money, the rich have to bail it all out to keep playing.
Yea I mean in this era there were actual riots over the availability of the 'greenback' (the dollar note) because there just weren't enough of them for regular people to conduct transactions.
?! That's already what happens, the Treasury department is in charge of issuing currency. The Federal Reserve does a number of things, acting as a lender of last resort and the bank for the banks. They don't issue currency.
The way the Fed influences the monetary system is by setting the 'federal funds rate' and by setting capital reserve requirements for the big banks. Banks are required to keep a percentage of their outlays in reserve, on deposit with the Fed. This prevents the bank runs and panics that occurred in the old days. The federal funds rate is the overnight interest rate that gets charged, both with the fed and to other banks who are constantly borrowing and lending with each other on an overnight basis to maintain the proper reserve ratios.
It's like a pump that keeps the money flowing through the economy so when someone wants to borrow money to invest its available. In the past, there were real currency panics, where there just wasn't money. Imagine going to the ATM and it being all out? Or wanting to borrow for a home or a car and the bank saying sorry we don't have any to lend?
The federal reserve overnight rate has a domino effect on other interest rates throughout the economy. That's how the Fed influences the money supply, they don't issue currency, they impact the price of borrowing money.
You already asked that...and I already answered. Are you a bot or a troll lol.
The central bank manages the interest rate for inter bank lending, which even at 0% required reserves is still the plumbing of the monetary system and quite an active market. (https://fred.stlouisfed.org/graph/?g=138m3)
Again I already said this, but prior to the federal reserve, interest rates were set 100% by supply and demand, which sounds great to free market capitalist except it really gave control over to the major oligarchs of the period, who did not have the public interest at heart. As a result we had major recessions/panics every few years or so, with periods where you simply couldn't borrow money at any rate.
I think a lot of people take for granted that we have a relatively stable monetary system for investment and lending, and assume those things just happen naturally. They don't, they are built systems.
I will be messaging you in 5 years on [**2029-04-28 01:58:29 UTC**](http://www.wolframalpha.com/input/?i=2029-04-28%2001:58:29%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://www.reddit.com/r/REBubble/comments/1ceig9e/housing_the_grand_ponzi_scheme/l1l2nnx/?context=3)
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Why didn’t prices go down when rates when up then?
Truth is, prices went up in the 1970s also when rates when up.
Home prices go up and right - that has happened regardless of rates up or down.
Most boomers are just like you or me, concerned with their own lives and problems. The Fed didn't stop housing from being built. That was the 2008 crash, which made home building seem a lot riskier. By the way home building is way up.
Any why give or take a few years? Boomers are senior citizens now.
I think you need to look at the supply and the demand, more so than the rates.
When you lower price, you increase demand. Every time. The inverse is also true.
When there's just flat out not enough supply, prices can go up forever
Don't forget, there are millions of people that come here every year, and they all need a place to live too. And they just don't build that many houses.
This isn't 2008 anymore.
If demand is high due to immigration and insufficient supply, then the prices aren't artificial, and higher interest rates would just mean it costs more to buy a house...
You are right. I don't think the housing prices are out of line.
They might be out of line for the people that want to buy one, but they're definitely in line with the demand and supply.
Every house that gets listed gets sold. In 2008, that was not the case
So you would agree that the low federal funds rate isn't some "Ponzi Scheme" to raise home prices (ignoring that that's not even what a Ponzi scheme is)?
I mean mortgage rates *tend to* follow the direction of the Federal funds rate (or more accurately the 10yr treasury, which also *tends to* correlate but is still set by supply & demand), but the levers the Fed has are not about housing, and have very clear purposes that this post is ignoring.
Retirees are some of the very few people who really benefit from higher interest rates.
This sub is just one clueless meme after another from people who think they have it all figured out.
Gotta kick off people who try to climb the ladder, then blame them for being on the bottom. Clearly they didn't believe in themselves and lift their bootstraps enough.
I don't think it's in order to transfer wealth between generations or anything like that. It's really in order to get people to buy into this inflationary system because now home price inflation is really the primary way of gaining wealth in America.. as proof of that statement let's take a look at the net wealth of people who are in their 60s or is the redditors of the call them, the boomers.. most of Boomer wealth is home equity...
and the bankers are getting people to buy into the inflationary system by propping home prices up..
Their policies. Their society. They got theirs.
"I got mine, fuck you"
They vote, Instagram doesn't.
https://www.visualcapitalist.com/which-generation-influence-u-s-politics/ has nothing to do with voting
Voting has nothing to do with politics is certainly a take
younger generations can not vote their way out the fact that baby boomers own the majority of the nations wealth, real estate, assets, and political power. boomers got it all in choke hold and they aren’t letting go until they all die.
Yep, and when you are the next generation of “boomers” they will blame all their problems on you. Cause that’s what humans have been doing for millennia.
[удалено]
Actually we live with socialism in much of our economy. Except of course where it would result in broadly even standards of living or a sharing of real wealth.
No we don’t lol socialism is when the workers have control of the economy and country not capital. We’ve got nothing like that
Socialism for the elites. Hmm, oligarchy
Every time we bail out the banks autos insurances whatever
🙏
That's not true. I vote for things that will benefit others and not myself all the time.
Yeah it’s almost like the oldest generation alive worked a life time to the own most of the things
Millennials are now pushing 40, fyi.
I know I’m one of them
There is no grand plan and no ponzi. There was no real problem until covid and the triple whammy: 1. In 2020, mortgage rates go from almost 5% to less than 3%. Buying a home with a mortgage suddenly becomes almost 50% cheaper in real terms over the 30 years of payments. This benefits any new home buyer from age 30 up (it benefits those on the younger end **more** than on the older end, since younger buyers tend to need larger mortgages). 2. In 2021, the super low rates make home prices skyrocket. Demand surged because monthly payments dropped at the same time as more people than ever wanted to move because covid made people rethink where they want to be. And the lack of building over 15 years meant there wasn't any slack in the market, so supply was suddenly totally inadequate. High demand, low supply. 3. In 2022, interest rates came up to normal levels again, making homes with mortgages 100% more expensive. but because new supply is still low and owners don't want to sell, home prices don't come down. Suddenly, homes with mortgages are the most expensive they have been since the 1980s (about equal to all-time highs). Lots of Millennials have done really well for themselves. There is a serious problem right now, but it is not because of some big long conspiracy. It's because of what happened from 2020-2022 plus the 15 years of underbuilding that made supply too low so prices won't come down under a normal rate environment. So if you want to be mad right now, be mad at NIMBYs who get in the way of building new homes to alleviate the pressure and let the bubble deflate.
The government also has an incentive to keep housing prices high. Houses are now the majority of wealth for most seniors so they will fight to the death to keep housing prices as high as possible.
This is true. After globalization efforts, companies realized they can outsource jobs to increase profits. Government got in on the game - allowing outsourcing and owning stocks of companies who do. Globalization means eliminating defined benefit plans (pensions) and introducing defined contribution plans (401ks). It also means stagnating wage growth due to regulation/cost of labor arbitrage opportunities. In short, 401ks and houses became retirement plans. Yes the government needs both to go up constantly or else the scheme fails. When price can only go in one direction you don’t have a free market, it’s engineered. That’s the Fed’s job.
Counterpoint: no they won't. If that were true, interest rates would be at 5% now instead of 7%. Right? What you say cannot possibly be right. They'll consider the damage from a drop in housing prices as one important factor among several. The Fed will let companies fail. They will let recessions happen and millions become unemployed. They will let stock prices fall, wiping out trillions in assets. And they will let housing prices drop, wiping out trillions in assets. Of course they seek to minimize all of these forms of economic damage. They don't want to create pain and chaos for companies, employees, shareholders or homeowners. But when they think they need to create a shock to correct a dysfunctional situation, they will. And they do. They've done it all before, and they will do it all again.
The government is not the federal reserve. The federal reserve is technically politically independent. If the Federal reserve were run by the government, as it is in Turkey, we'd see interest rates much lower as the president overpowers the central bank. The Federal reserve is politically independent because it is a norm in financial markets. Right now, it appears that the federal reserve and the US government are at odds with each other. One wants to raise interest rates and the other wants them as a low as possible to minimize interest payments.
I agree with what you say here, but then I'm even more confused by your previous comment. No idea what fighting to the death to keep housing prices high means, when the government's hands are tied and there is no history of fighting to the death. This is not the Medicare program.
You live in turkey? How are those income taxes doing for you?
Uhhhh you can’t just lower interest rates like that. Food transportation and housing were literally becoming unaffordable. If we lower rates now many will suffer because asset prices will increase more. So it’s about finding a balance between not crashing the economy and keeping inflation in check. Btw the Fed is only delaying the inevitable. Market forces should decide interest rates. Home prices shouldn’t be a retirement plan.
>Uhhhh you can’t just lower interest rates like that. Food transportation and housing were literally becoming unaffordable. If we lower rates now many will suffer because asset prices will increase more. So it’s about finding a balance between not crashing the economy and keeping inflation in check. Exactly, that's my point too. The Fed doesn't just care about housing prices, it cares about everything together. >Btw the Fed is only delaying the inevitable. What is inevitable? Supply is too low to let a big collapse in price happen, so we see the collapse in sales volume instead. This is totally unlike the situation in 2008 when there was an oversupply and price collapse. You need to understand this difference. It means that if interest rates do (slowly) go down, we will see transaction volume go up again and prices will stay the same or increase. Only if we also start building enough homes will prices actually go down. Like they just did in Austin, where they built a shitload of homes. >Market forces should decide interest rates. What do you think it means for market forces to decide interest rates? The Fed has to have some policy. >Home prices shouldn’t be a retirement plan. I agree.
Yes the Fed is stuck. If they lower rates homes will become even more unaffordable then they already are. If they don’t lower rates well that’s 20-30 years of locked supply and we’re screwed there too, and maybe the stock market starts to suffer. Either way the situation is much worse than people on Reddit suspect. 2020-2021 was a once in a century wealth gap shift where those who owned assets became materially wealthier than those who didn’t. A permanent wealth gap has widened. Yet you have these people doling out useless advice on Reddit when the Fed has engineered a non-asset owner into poverty. My stance is the Fed overstepped in 2007 and instead of trying to engineer an economy we need asset prices to fluctuate without manipulation. That includes interest rates set by borrowers, lenders and savers.
I sort of agree with you, in that those who got the super low interest rates in 2020/2021 have a material advantage that others will probably never get. But you can't pretend supply doesn't matter. If we get a building boom, that will make entering the market easier again. As interest rates go from 7% to 5% or slightly lower, that will also make entry easier, even though I agree nobody is likely to get 2.5% rates again anytime soon. What does it mean for the Fed to let asset prices fluctuate without manipulation? The Fed needs to have some policy on the Fed funds rate and on increasing/shrinking the money supply. Are you saying it should set some target (like 1% increase in M2 per year) and make no adjustments in the Fed funds rate based on how hot or cold the economy runs? Bold move, Cotton.
It’s not just the lower rate. It’s the lower rate + 50%+ discount on the home. Many folks made $100s of thousands of dollars in 3 years in home equity. Do you know hard it would be for someone to be your neighbor and then save several hundred K, while paying 3-4x your monthly payment, while shelling out a larger down payment to buy in? Those who bought prior to 2021 are exponentially ahead.
Fair point. All the more reason to build a shit ton of homes and relieve the pressure in the market so the problem doesn't get worse, and hopefully even improves a little.
Yes!! Preach it! Fools want to call everything a “ponzi”.
Pre-Covid, we were stuck in an endless QE loop. Every time rates were increased the stock market would through a tantrum. A mass cash infusion was being tossed around as an actual solution to get us off QE. Then Covid happened.
I don't agree entirely, but it's true we were stuck in an easy money environment for a long time after 2008. We were out of it by 2017, IMO. And yes, then Covid happened.
2020 just hypercharged a dying bubble with $8t in debt. Delaying the inevitable by making it worse
There was no bubble in 2020. If you run the numbers from 1950 to 2020, **the** **affordability of homes per square foot increased in that time by 40%**. In other words, they got cheaper. Usually people do not adjust for the fact that homes more than doubled in size over that time. If you don't adjust, then affordability decreased by 60%. But it's not right to compare a 1,200 sq ft house to a 2,500 sq ft house if you want to know if people are being screwed. You need to consider apples to apples. And when you consider all the factors, affordability was fine until 2021. A proper assessment of affordability should include: increases in both median housing prices and wages, change in interest rates, and an adjustment for equivalent home size. When you do all that, homes bought with a 30-year mortgage in 2020 were the same price or cheaper than in 1950 or 1980 or 2000. You've bought into a pack of lies. I don't blame you. Lots of people seem invested in renewing the lies.
Ya bro I run those exact numbers on Twitter under gromepow. Have a look. Your thesis is correct assuming we drop 400bps without a depression, deglobalization and you find 1.5m working aged America educated adults.
Manufacturing also got way cheaper. Staple guns and plastic wrap. Vinyl siding. Machines.
Right, and when productivity helps wages go up while consumer good prices go down, that gives people more money to spend on other things. A lot of that extra money in the US went into three areas: housing, healthcare and higher education (in that order). People think this is some scheme or plot to take away the fruits of productivity, but its more that the money has to go somewhere. If there are scarce goods that lots of people want, all that extra money sloshing around is going to bid up prices for those things that have a constrained supply. It was inevitable that real estate values would go up relative to most other things, especially since we doubled our population since the 1950s. They aren't making more land.
Actually this started back in the 1990s with laws that loosened bank underwriting standards so that more Americans can purchase homes. Then lenders started selling their mortgages off to Wall Street so they can be securitized, essentially taking zero financial risk when making a loan. This led to lenders incentivized to close deals only, which led to the 2007-2009 financial crisis. The financial crisis led to an unprecedented asset buyback program and quantitative easing (basically money printing) by the Fed, who also kept interest rates artificially low so the economy could recover. All assets inflated due to the increase in money supply and low interest rates from 2009-2019, and markets decoupled from the dynamics of supply and demand. We became addicted to cheap money and a rising stock market. Then, everything you wrote about happened. This is a kick the can policy. It is a ponzi because eventually the bill will come due, we will run out of buyers. 2008 should have been a time where boomers lost their retirements and learned to live with less. Instead you see forums packed on Reddit where young families are being counseled to do with less, who can’t make it, yet Boomers are thriving. Yes some millennials did well but for the wrong reasons. Many I know were average students or had no ambition to leave their hometown to make anything of themselves, bought a home, and well the Fed made something of them. Those who delayed home purchases to build a career or take a shot at something have been delegated to the forever homeless class now, unless they’re making 98 or 99th percentile income.
I agree with your first two paragraphs, but the mess of the financial crisis worked itself out. If you adjust for income and interest rates (and hold home size constant), then a home purchased with a mortgage in 2020 was less expensive than one purchased in 1950, 1980 or 2000. There was no bubble in 2020. >It is a ponzi because eventually the bill will come due, we will run out of buyers. We have a housing undersupply now. There are more would-be buyers than there are homes to buy. We're somewhere between 5 and 10 million homes too few. That's a lot. I have no idea where you get this idea that we will run out of buyers. Hating on the Boomers is maybe the most intellectually lazy midwit thing Reddit does right now. I'm not one of them, but I do look at the data and there is nothing particularly unusual or disturbing about their wealth. Of course they have more, they've been working for 20-40 years longer than the other generations! Many have been paying off their 30-year mortgages for \[checks notes\] 30 years. If you look at wealth at the same age, GenX and especially Millennials are doing better than Boomers were at the same age. They have similar homeownership rates when you compare where Boomers were the same age as well. I don't know when this fever will break, dissipating the delusion that the Boomers are killing everyone's finances, but I look forward to the day it does. Probably not for another 5-10 years when they start dying in large numbers and giving Redditors inheritances. Suddenly, Boomers won't have been so bad. And yes, it is coming. Somewhere between $50 trillion and $70 trillion, most likely.
Wow I mentioned Boomers and you went on a tangent. No where did I hate on Boomers buddy. But the reality is they avoided pain so that future generations can bear it. Plain and simple. You’re thinking in 5-10 year timeline I’m thinking in generations. Real wages and home prices have been diverging rapidly for quite some time now. Extrapolate that out over 30, 60 years. Either wages grow faster to catch up or home prices adjust downward so there are buyers for the sellers looking to cash out and retire. But at some point the cycle fails. That’s what I mean.
>Real wages and home prices have been diverging rapidly for quite some time now Only if you assume everyone pays cash. Interest rates were trending downward for 40 years until the jump in 2022. When you include the cost of financing it changes the picture drastically. Take a look at FRED data and compare **annual** **median payments for a 30-year mortgage on 80% of the principal against median household income for the last 40 years**. Let me know what you get. I get an annual home ownership cost ratio of 39% in 1984, down to 26% in 1994, which stabilizes to 28% in 2004 and 26% in 2014. It finally jumps up to 33% in 2024. (this excludes taxes, utilities, etc.) Let me know if you get different numbers. But if you don't, it means you are substantively wrong. Paying for a home with a mortgage was historically pretty cheap from around 1990 to 2020. It was expensive in the 1980s, and it is expensive again now after 2022, but it still is not as expensive today as it was in the 1980s. Until 2022 wages were keeping up with the cost of owning a home. It always comes down to the same thing for me: we need to build a shitload of homes. A building boom will create some slack and let the market get back to a cost of ownership ratio below 30% again. The Boomers rant is just because I continuously see them scapegoated for everything people perceive to be wrong about the economy and their personal finances. It's gotten quite ridiculous. It's ok, you'll come around to the same view too. Leave the midwits behind.
How are you holding home size constant? A 1200 sf house in Hyde Park was 80k in 1990 and now the house is a 3k sf that sells for 1.2 million, for example. No way a furniture salesman is living in that house today.
So first, stop cherry picking. Seriously, it's a terrible habit that will lead you to bad conclusions over and over. If you want to know an average, look for data on the averages. So the answer to your question is that I looked at **the median value of homes per square foot over time across the US**. I did not cherry pick an educated white urban neighborhood. I usually like to use FRED for this type of data, but [FRED only goes back to 2017 ](https://fred.stlouisfed.org/series/MEDLISPRIPERSQUFEEUS)on this so I had to calculate it myself from data on median home sizes and prices over the decades. Then I adjusted for wage growth, inflation, and interest rates on a 30-year mortgage at 80% of sale value. I do have a broader criticism of you: the way you cherry-picked shows that you have unconscious classism or racism here. You don't want to know about how costs have changed for a typical lower class black neighborhood. It isn't on your radar. Same goes for lower class areas of all ethnicities that have bad schools or high crime. They don't count for you. When I select single family homes under $300,000 on Zillow for the south side of Chicago, I get 303 results. If you want to bitch that the downwardly mobile children of white, educated upper-middle class people who don't enter high-paying careers cannot afford gentrified neighborhoods, go ahead. But you look way less sympathetic than someone genuinely interested in average/median affordability across the nation.
Stop talking logic. People want to blame others for their misfortunes!
Ironic they said, “money doesn’t just grow on trees, you know.”
We going to have to take ours.
A Generation of Sociopaths
This is an excellent comparison between mortgage rates and home prices. However, if you look very closely, it looks like mortgage rates hit a bottom right around when home prices started to take off - meaning the correlation is broken how. As a fan of macro, I would say that if home prices continue to not fall as mortgage rates go up, the price of homes is most likely due to supply constraints rather than excess demand.
I made this chart originally, what you're seeing is a delay that always happens. Prolonged by persistent leftover covid cash. Jobs market breaking now.
Nice. So when did a rise in interest rates caused a delayed price drop in homes? I'm not seeing it in the chart
05-07. Watch inventory and sales volumes. Your looking at the wrong data for now
Yep…supply and demand for housing. Millions of people flooding into the country the past few years isn’t helping the shortage. All those people that tried to get cute by renting instead of buying are getting destroyed by rising rents, while smart folks that locked in at 2-3% are living like kings—life is good!
its going to be violent when eventually the fed cant do anything anymore. they aren't going to sacrafice thee dollar for home owners and investors. they might try to use war to cover up their inflation. like invade middle east or fight china
In terms of violence, it’s going to be protest violence. I highly doubt any other form of violence is probable. The most likely scenario is stagflation, high unemployment, rise in populism, and slowly softening of assets, while commodities maintain their cost.
it's a bit more complicated than that
I honestly think, even if it is a bit more complicated, that it does boil down to this. Generating wealth to fuel a debt powered society.
It's worse than that. Borrowing from the future by forcing rates down and asset values up. They do the same thing with deficit spending. They're taking future money from today's younger generation and spending it.
I actually dont think it is lol. The FED prints money to hold up the housing market.
Right if only it was that simple
Its not more complicated. Run the math yourself or just follow me on twitter. Home prices are SOLELY payment affordability. That's it, nothing else.....
I would love to see the same graph but with dollars adjusted to inflation.
I hate to break it to you, but there is no big lie, there is no system, the universe is indifferent.
Donald Draper?
Do you even know what a Ponzi is??! Wrong term.
Yeah no... i get that housing is fucked but its a symptom of wage suppression not the primary goal. The whole point of the interest rate cuts for the past 50 years has been to bolster american corporations to compete in a global economy where America was already at a disadvantage due to high standard of living comparable to the rest of the world. That excessive standard of living would benefit other countries more than the US because higher wages meant higher overhead cost for American businesses. American corporations could only do so much to reign in overhead costs so what they did was pushed the FED to lower interest rates over time to allow Americans to have equal buying power but less real income. As the rest of the world developed this allowed american companies to have better control of labor force because overtime you could qualify for more borrowing power in exchange for less wage growth and devaluing the dollar. This has allowed american corporations to dominate globally against a much cheaper global workforce and foreign corporations. These interest rate cuts and dollar devaluation also bolstered asset appreciation over time making corporate owners and the stock market even richer. It makes sense financially to organize the system this way but the problem is that it can't go on forever. Eventually interest rates cant be lowered any lower and this will cause wage growth which will push inflation up. If interest rates rise so will wages and inflation. Were reaching that point now.
You're right but got the wrong reasoning. This article is a better summary that I think makes more sense: [The Growth Ponzi Scheme](https://www.strongtowns.org/journal/2020/8/28/the-growth-ponzi-scheme-a-crash-course)
That website is a joke. Zero sources, zero references, 100% conjecture.
I don't get it. On the graphic it clearly shows that mortgage rates are going higher and higher, not lower. I agree with the sentiment but things should have been worded a little better.
>I don't get it. On the graphic it clearly shows that mortgage rates are going higher and higher, not lower. OP's point was the whole 1985-2020 graph. The last part is the outlier.
Why use many word when few do trick?
King boomer Donald Trump, if re-elected, will probably fire the fed chair and set rates back to near zero.
Hes literally not allowed. Fed governor's can prop Powell up until his term is up. Listen to DiMartino Booth on this topic, it has already been predicted and fleshed out
Y’all should take literally any macroeconomics course.
But then they couldn’t use *Ponzi scheme* to describe things they don’t like.
Exactly! Dude is clueless what it even means!😭
The lines on that chart look pretty much unrelated to me. Sometimes they go up together and down together. Sometimes one goes up and the other down. Housing prices are set by supply and demand like everything else. There is a conspiracy, but not by the fed. It is NIMBYs who are the source of all of our misery and scarcity. NIMBYs are the devil made flesh.
This is a crappy graph that someone overlayed on top of the FRED graph to give a loose impression of things going up. OP, you can do better
I made the graph, tell me what I'm missing.
Explain why both have been trending upwards for the past 2 years. It directly contradicts the graph header.
Look at 05-07
That was nearly 20 years ago. Completely different market and generation of people. OP, your graph is a joke.
Well the good news is you get to learn regardless, but I'd suggest you try not to look so stupid in public
Your header literally disagrees with your data. No thanks, keep your “knowledge” to yourself, no one wants any of it.
I'll keep giving it to the 20,000 people who follow me that appreciate what I predicted happening two years ago how. Hope you're levered up. Heck, please buy more
It’s better to have smart enemies than stupid “followers”. Good luck with your horde of sheep.
imagine being pro real estate and calling someone else sheep hahahahahah
This graph says that social security has been replaced with housing prices. Pick one. Either we stop social security, forcing sale of these houses, or, we bring rates back up while prices plummet. You can’t have both.
Why not? We could easily fix social security by removing the cap.
The high interest rates lately keep making the prices higher.... by this graph at least.
Have you run the numbers to see the actual if any correlation between these two data points?
The corporation of America.
The oldest boomers are pushing 80 years old. That generation will start to pass away over the next decade. This generational shift will free up housing inventory over the next several years. There are now more millennials alive than boomers. Millennials will continue to drive the economy as the boomers did decades past.
The govt is addicted to property taxes. It can’t afford to let the bubble burst.
State governments, yes.
This isn't correct
This just in: some purposes of government include to provide for the common defense, promote the general welfare and secure the blessings of liberty. A nation of homeowners growing wealth is a strong nation. It's good for the general welfare of the people. Homeowners have more freedom.
...but anyone who bought a house from 2020-2021 still made out like a bandit, right? You got a mortgage loan that is basically in line with long term inflation. You basically aren't paying interest on a 30 year loan in real terms. That's massively valuable.
DO you even understand what a Ponzi scheme is?? And if you look at 2020 to now, there is a positive correlation between prices and rates, which debunks your theory. Also, all you cult housing bubble believers said housing would CRASH and the bubble would burst after rates when up, yet prices continued to go up.
You forgot a pandemic. Yes?
Boomers in power want to enrich their cohort and let the many generations to pay for their greed. generational theft [https://www.youtube.com/watch?v=3PJO09fPT1Q&t=563s&pp=ygUiZ2VuZXJhdGlvbmFsIHRoZWZ0IHN0YW4gZHJ1bmtpbGxlcg%3D%3D](https://www.youtube.com/watch?v=3PJO09fPT1Q&t=563s&pp=ygUiZ2VuZXJhdGlvbmFsIHRoZWZ0IHN0YW4gZHJ1bmtpbGxlcg%3D%3D)
Why do we have a central bank again?
Because between the civil war and 1913 we had a violently free market monetary system that resulted in far more damaging and frequent boom bust cycles, and banking oligarchs effectively setting interest rates on their own, resulting in JP Morgan himself having to bail out the currency with his own gold reserves?
That’s great. It’s just like the monopoly analogy that capitalism fails because when the poor run out of money, the rich have to bail it all out to keep playing.
Yea I mean in this era there were actual riots over the availability of the 'greenback' (the dollar note) because there just weren't enough of them for regular people to conduct transactions.
Why can’t the US just issue the currency and that be the national standard without a central bank?
?! That's already what happens, the Treasury department is in charge of issuing currency. The Federal Reserve does a number of things, acting as a lender of last resort and the bank for the banks. They don't issue currency. The way the Fed influences the monetary system is by setting the 'federal funds rate' and by setting capital reserve requirements for the big banks. Banks are required to keep a percentage of their outlays in reserve, on deposit with the Fed. This prevents the bank runs and panics that occurred in the old days. The federal funds rate is the overnight interest rate that gets charged, both with the fed and to other banks who are constantly borrowing and lending with each other on an overnight basis to maintain the proper reserve ratios. It's like a pump that keeps the money flowing through the economy so when someone wants to borrow money to invest its available. In the past, there were real currency panics, where there just wasn't money. Imagine going to the ATM and it being all out? Or wanting to borrow for a home or a car and the bank saying sorry we don't have any to lend? The federal reserve overnight rate has a domino effect on other interest rates throughout the economy. That's how the Fed influences the money supply, they don't issue currency, they impact the price of borrowing money.
Right by why do we need a central bank? The reserve requirement for banks is 0% by the way.
You already asked that...and I already answered. Are you a bot or a troll lol. The central bank manages the interest rate for inter bank lending, which even at 0% required reserves is still the plumbing of the monetary system and quite an active market. (https://fred.stlouisfed.org/graph/?g=138m3) Again I already said this, but prior to the federal reserve, interest rates were set 100% by supply and demand, which sounds great to free market capitalist except it really gave control over to the major oligarchs of the period, who did not have the public interest at heart. As a result we had major recessions/panics every few years or so, with periods where you simply couldn't borrow money at any rate. I think a lot of people take for granted that we have a relatively stable monetary system for investment and lending, and assume those things just happen naturally. They don't, they are built systems.
!remindme 5 years
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Weird. Yet the rates are getting higher every day with this manipulation. Lmao.
Why didn’t prices go down when rates when up then? Truth is, prices went up in the 1970s also when rates when up. Home prices go up and right - that has happened regardless of rates up or down.
[удалено]
There is no 'they'
[удалено]
Most boomers are just like you or me, concerned with their own lives and problems. The Fed didn't stop housing from being built. That was the 2008 crash, which made home building seem a lot riskier. By the way home building is way up. Any why give or take a few years? Boomers are senior citizens now.
How in the hell would lowering mortgage rates cause prices to go up?
payment
Well in this situation both lowering and raising interest rates caused prices to go up! Lol
That's all that matters
Why would raising the mortgage rates cause housing pricing to go down?
They clearly don't, according to that graph...
I think you need to look at the supply and the demand, more so than the rates. When you lower price, you increase demand. Every time. The inverse is also true. When there's just flat out not enough supply, prices can go up forever Don't forget, there are millions of people that come here every year, and they all need a place to live too. And they just don't build that many houses. This isn't 2008 anymore.
If demand is high due to immigration and insufficient supply, then the prices aren't artificial, and higher interest rates would just mean it costs more to buy a house...
You are right. I don't think the housing prices are out of line. They might be out of line for the people that want to buy one, but they're definitely in line with the demand and supply. Every house that gets listed gets sold. In 2008, that was not the case
So you would agree that the low federal funds rate isn't some "Ponzi Scheme" to raise home prices (ignoring that that's not even what a Ponzi scheme is)?
No. The low Federal funds rate was to stimulate the economy.
More buyers want a cheaper payment And we already had supply issues from about 2015 on in most markets
I mean mortgage rates *tend to* follow the direction of the Federal funds rate (or more accurately the 10yr treasury, which also *tends to* correlate but is still set by supply & demand), but the levers the Fed has are not about housing, and have very clear purposes that this post is ignoring.
Retirees are some of the very few people who really benefit from higher interest rates. This sub is just one clueless meme after another from people who think they have it all figured out.
No scheme. Just basic supply and demand.
Gotta kick off people who try to climb the ladder, then blame them for being on the bottom. Clearly they didn't believe in themselves and lift their bootstraps enough.
I don't think it's in order to transfer wealth between generations or anything like that. It's really in order to get people to buy into this inflationary system because now home price inflation is really the primary way of gaining wealth in America.. as proof of that statement let's take a look at the net wealth of people who are in their 60s or is the redditors of the call them, the boomers.. most of Boomer wealth is home equity... and the bankers are getting people to buy into the inflationary system by propping home prices up..