Short term reduced demand will stagnate, maybe lower some markets - cool them off vs freeze.

I have harped on it, perhaps in a bit harsh, condescending manner and I apologize, but I think the younger generations (I am only 46) need to think about what THEY WANT in their future communities.

I have never lived in a master plan. I've lived in Flower Mound for about 20 years and both neighborhoods have been around 50 units, though one lot size was ~9500sf and the other is 1 acre.

If some young couples and families infiltrate an area they can revitalize it. School choice could make a HUGE impact on that, which is why I support it. Not everyone has to live in a box on a box in a MPC with a pool and 3 elementary schools you can walk to.

The biggest thing is the answer is somewhere in the middle.

It can be both true the atmosphere for home buying is very poor

And

It can be true that the expectations or must haves for young people wanting to buy are too high or misaligned with what's available

And the reality is very few of us get to buy our first house without some level of struggle or sacrifice.

And, I think we're in a reckoning for the prolonged time of super cheap money and fed money printing

7% is not a high interest rate. It's a great rate. Just not after we got used to the 3s.

You talk as though the people currently not buying homes (but wanting/trying to) have a strong say in the market as to how the homes on the market today are being built, when in reality, the group buying the homes (boomers and perhaps foreign investors) are likely the ones influencing the houses available/being built.

Y'all gripe at the younger generation when your generation created the environment we live in now, long before ours had any real say.

You cannot buy the houses described throughout this thread. Nor can you build them (HOAs, also boomers' fault). And yet you look down on our generation for facing the economic reality we were born and raised into. Not to mention the policies that boomers voted for and elected that further exacerbate the issue (mass migration, H1B, etc.).

There may be a lot of idiot leftists in our generation, but our idiots were raised by your idiots.

ABatt18 said:

---

You talk as though the people currently not buying homes (but wanting/trying to) have a strong say in the market as to how the homes on the market today are being built, when in reality, the group buying the homes (boomers and perhaps foreign investors) are likely the ones influencing the houses available/being built.

Y'all gripe at the younger generation when your generation created the environment we live in now, long before ours had any real say.

You cannot buy the houses described throughout this thread. Nor can you build them (HOAs, also boomers' fault). And yet you look down on our generation for facing the economic reality we were born and raised into. Not to mention the policies that boomers voted for and elected that further exacerbate the issue (mass migration, H1B, etc.).

There may be a lot of idiot leftists in our generation, but our idiots were raised by your idiots.

---

Would need to see some data on this claim. It's not all boomers buying and building homes. I don't think everyone understands where the Boomer line begins and ends.

Most of the people buying and building in my last now upscale neighborhood were GenX and millennial. The boomers were the ones selling to them.

And the foreign investor spigot shut off last year when rates went up according to my banker friends. Obviously still happens but not at the outsized levels it was.

Agthatbuilds said:

---

The biggest thing is the answer is somewhere in the middle.

It can be both true the atmosphere for home buying is very poor

And

It can be true that the expectations or must haves for young people wanting to buy are too high or misaligned with what's available

And the reality is very few of us get to buy our first house without some level of struggle or sacrifice.

And, I think we're in a reckoning for the prolonged time of super cheap money and fed money printing

7% is not a high interest rate. It's a great rate. Just not after we got used to the 3s.

---

Can't disagree with any of this. That is for freakin sure.

Its not just that "we got used to the 3s" its that the "market and thus the entire asset class got used to the 3s." (which I know you know).

The US housing market is so expensive that incomes would have to spike 55% for it to be considered affordable, per BI.

— unusual_whales (@unusual_whales) November 11, 2023

Obviously, 55% wage increases are not the answer

Government policy has resulted in a $129 trillion wealth transfer into the pockets of boomers and older Americans, per Bank of America, $BAC.

— unusual_whales (@unusual_whales) November 20, 2023

I'd like to hear some one more knowledgeable than me explain the implications here

Meh, more of the same.

Boomers benefited from advantageous "government policies" like low interest rates, retirement savings accounts, low inflation and such and that millenials just do not have the same chances.

Vaguely appears to tie increase in government debt with increase in boomer wealth.

Believe the more correct terminology would be wealth "creation" not transfer. But maybe I misunderstood as even the article below made little sense.

https://finance.yahoo.com/news/great-wealth-transfer-isn-t-100000946.html

Baby boomers have unquestionably been the primary beneficiaries of this "massive wealth transfer," as noted by the BofA research team, led by Ohsung Kwon.

Read more: https://t.co/6DPy7VHHmI

— unusual_whales (@unusual_whales) November 21, 2023

I dont get it. I'd tend to agree with you that govt policy for boomers was better for wealth creation?

I mean you could say that Boomers benefited from programs that allowed for tax advantaged savings and that if deductions for 401k's, tax deferments, tax-free growth and others then I guess that kept the gubmit from getting those taxes and maybe that is their "transfer" angle?

Seems like they are blaming low taxes and economic growth and general prosperity for "wealth transfer" but I am not following on those the transferor is supposed to be. The government? Via tax policy and monetary policy?

But they ignore that those things helped the good economics. Seems like some obtuse socialistic take on Boomer wealth. Bizarre to me.

If you were too young to be in the housing game since 2008 you have been screwed over. I and many others made a lot of money off of low interest rates. Covid put it over the top with bad supply chain and low expensive labor. Only thing that would right this ship would be massive foreclosures and a housing collapse.

To caveat, you 'saved' money with low rates though agree you made money with the rising market.

But… consider that wealth building did not always result people putting those gains into a savings account. Much, much of it went into the economy through discretionary spending contributed to the restaurant boom, car price boom, stock markets all of which created even more wealth in families and communities which further drove up the housing market.

A housing collapse will be either a catalyst of a bad economy or will result from one. And then those millennials will be out of jobs or in lower paying jobs and STILL will not be able to afford a house.

It leaves fewer and fewer options for sure.

fka ftc said:

---

Meh, more of the same.

Boomers benefited from advantageous "government policies" like low interest rates, retirement savings accounts, low inflation and such and that millenials just do not have the same chances.

Vaguely appears to tie increase in government debt with increase in boomer wealth.

Believe the more correct terminology would be wealth "creation" not transfer. But maybe I misunderstood as even the article below made little sense.

https://finance.yahoo.com/news/great-wealth-transfer-isn-t-100000946.html

---

Low interest rates and high government debt is inflationary. Due to Quantitative Easing and TARP and other programs from the financial crisis, the inflation was seen primarily in financial assets like the stock market and housing prices. We didn't see CPI issues until the helicopter money drop (the increase in M2) due to covid.

Government debt is not wealth creation, it's a transfer payment.

To the general global economy I guess you could see it as a transfer payment. But it didn't go to Boomers more than others. Edit: Not by any specific mechanism other than age / stage in life during that time period.

Boomers had more assets and greater homeownership in 2008 than Gen Xers and Millennials.

Do you dispute TARP and QE was housing bailout from which Boomers benefited the most? AARP estimates 51% of people over the age of 50 owns more than 70% of US homes.

You honestly believe boomers are buying houses?!

The youngest boomer is 60. They are retiring. If anything, they are selling the house they have and trying to downsize but I bet the vast majority are simply retiring and staying put.

The median net worth of people 55-69 not including their home is about $100k.

I build many very expensive homes for boomers.

Just a random anecdote I'll add

Currently Boomers are the largest buying group, while Millenials are the largest group shopping. It's all about cash on hand and DTI. Can the younger crowd afford the down payment and do they carry too much debt to qualify for the note? Older groups usually can and therefor they are a larger proportion of buyers.

Gen X is currently in the phase of life where they get a new home if required by life circumstances.

It makes sense Boomers are the largest buying group.

They are the ones who have equity, and savings. The interest rates greatly affect younger groups, because they finance the most.

Agthatbuilds said:

---

I build many very expensive homes for boomers.

Just a random anecdote I'll add

---

Yeah, the number of age-restricted communities popping up in Texas is not insignificant. Those don't happen because boomers are settling into their homes they raised their kids in.

Premium said:

---

If you were too young to be in the housing game since 2008 you have been screwed over. I and many others made a lot of money off of low interest rates. Covid put it over the top with bad supply chain and low expensive labor. Only thing that would right this ship would be massive foreclosures and a housing collapse.

---

One of the big issues right now is related to the low interest rates you mentioned.

Most home sellers, are also home buyers; and the vast majority have locked in fixed rates below 6%. Moodys & Burns seem to think an ~10% correction will take place in either 2024 or early 2025, but prices aren't moving much unless interest rates come down.

Btw with a 0% down USDA loan, and good credit a borrower could get into a 400k home with monthly payments (including PMI) of ~$2,500, and total cash from the borrower of 6-8k . I'm excluding all the other variables so I don't have to type an essay... homes are still affordable, and those market data are generated from an area where the median home sale price is ~600k for the eastern half of the state.

Interest rates imho should've never gone below 4%. I saw one instance where a homeowner refi'd to a rate just under 2% which is ridiculous.

What's a 400K loan with 0 down @ 8.5% going to look like?

Price point isn't the only thing that drives affordability

USDA loans are only available in USDA classified "rural" areas (at least the programs I know of). LGi is big on this as part of their model / approach to market.

As you indicate, whole lot of factors go into the affordability and none of them are working in the favor of younger buyers right now.

Personally, I still think it is a viable alternative to consider living in older homes in less desirable neighborhoods if one is intent on purchasing a home of their own these days.

AgsMyDude said:

---

What's a 400K loan with 0 down @ 8.5% going to look like?

Price point isn't the only thing that drives affordability

---

I'm not saying it's the price point, and I mentioned that i'm not discussing the other variables to avoid an essay.(Income/DTI/Liabilities/Available Liquidity etc.). I'm just saying that a home can still be affordable, and options exist.

I also don't see much changing in median home sales prices where I'm at, but I'm only good in retrospect, or maybe looking forward 1Q.

The problem with housing data is that it depends on the market area, making discussions between participants in different states more difficult as the conversation gets more specific. National trends are anyone's guess, and nobody really knows what's coming.

ETA: You're 100% right about older homes. 400k where I'm at will get you a 1200ft^2 3 bed 2 ba home built in the 1950's - 1980's. great starter home imo.

Per WSJ today:

"Home Sales Fell to a New 13-Year Low in October"

Logos Stick said:

---

Per WSJ today:

"Home Sales Fell to a New 13-Year Low in October"

---

StagNation.

Pluralizes Everythings said:

---

Logos Stick said:

---

Per WSJ today:

"Home Sales Fell to a New 13-Year Low in October"

---

StagNation.

---

For the first time since covid I'm seeing commercials advertising discounts on homes. The prices are still higher than they were pre-covid, but still lower than what they were asking for recently.

Maybe that will incentivize people a bit to get a new house.

Agthatbuilds said:

---

I build many very expensive homes for boomers.

Just a random anecdote I'll add

---

I have taken quite a few applications for construction loans from boomers for what I consider very expensive houses. I'm 66 so I'm one of them and when I look at their finances it scares me to death. Not all of them but a lot of them.

I also work for a builder and boomers are easily 90% of our customer base. And what still shocks me is many of them build a home and end up selling within 3-5 years.

No Spin Ag said:

---

Pluralizes Everythings said:

---

Logos Stick said:

---

Per WSJ today:

"Home Sales Fell to a New 13-Year Low in October"

---

StagNation.

---

For the first time since covid I'm seeing commercials advertising discounts on homes. The prices are still higher than they were pre-covid, but still lower than what they were asking for recently.

Maybe that will incentivize people a bit to get a new house.

---

That's actually good to hear. I've been tracking some new construction of townhomes, and just saw sale prices dip from 400 - 380k. I'm rooting for a market correction, I just don't know which angle it might come from, or exactly when.

That's exactly what it is. If the government didn't get your money then they are considering it a wealth transfer.

Would they rather have wealth creation or a communist state where no one has wealth?

YouBet said:

---

That's exactly what it is. If the government didn't get your money then they are considering it a wealth transfer.

Would they rather have wealth creation or a communist state where no one has wealth?

---

It would seem they have indoctrinated the youngsters with the latter but they've watched their parents achieve the former, which has left them in perpetual state of confusion and whining.

Socialist policies will not result in the individual homeownership and wealth building and they seem frustrated. Maybe they should get behind parties and candidates who support the life they WANT to live, not the life they have been TOLD by liberals they need.

Luxury home sales fell 10.6% in the third quarter compared to last year, per Redfin.

— unusual_whales (@unusual_whales) November 22, 2023

A needed correction. Sucks for me though

You may be surprised. Prices falling and things slowing down may cause some cash heavy buyers to pull the trigger.

jja79 said:

---

Agthatbuilds said:

---

I build many very expensive homes for boomers.

Just a random anecdote I'll add

---

I have taken quite a few applications for construction loans from boomers for what I consider very expensive houses. I'm 66 so I'm one of them and when I look at their finances it scares me to death. Not all of them but a lot of them.

---

So a lot of them have very poor balance sheets yet they are getting loans to build massive homes?!