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Comment by whinenot | Hacker News Reader

If that interstate was never routed through that neighborhood, would members of your family be financially better off today? A fully paid off house unlocks a lot of financial freedom for the current occupants and potentially generational wealth for future family members.

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This is a new argument in the past few years and it doesn't make sense. You do not need a parent with a paid off house to go to college and be successful. I didn't have that and I don't know many people who did. My friends whose parents have paid off houses now did not have them back when the kids were going to college and how would that have helped anyway? Home equity loan instead of student loan? How often is that choice made? There are some rich families who manage to pass wealth on generation after generation but it's rare in my experience and not needed to succeed

The typical American's biggest monthly expense is housing. Owning a house drastically reduces your monthly expenses. If you're young, out of work or on a fixed income, minimizing that expense can have an enormous impact on your quality of life and the choices available to you.

The generational wealth kicks in when your heirs can assume your mortgage free lifestyle, generate monthly income from it, borrow against it, or sell an asset that has likely appreciated in value (sometimes greatly) since it was purchased ages ago.

No it doesn't historically and in most places even in the US. If you live in an unusual area, e.g coastal California, at an unusual time, e.g. the past 20 years then yes if you bought 20 years ago your cost would be much less than equivalent rent. OTOH if you mean own it outright then sure but with 30 year mortgages almost no one would own a house outright until pretty close to retirement. And sure if you inherit a house you can live rent free but for most people who inherit a house it would be 20-30 years before you yourself die, i.e. pretty close to retirement. So yes some people get a nice surprise late in life (but hardly most people- I won't for example). Difficult to see how it would make much difference in someones life course

The average age of inheritance is like 50 and the average sum inherited is like $40k (these numbers are from memory). I couldn't figure out what percentage of people ever receive an inheritance at all, but I don't think it's large.

Plainly, this is not generating "generational wealth" that's giving people an enormous head start.

These tropes are repeated uncritically because people want them to represent large effects.

No. Why would that have had any impact on their ability to later buy a home? It didn't change anything over the long term.

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