The average age of U.S. homebuyers jumps to 56
cnbc.com
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No great way out of this mess.
https://www.brookings.edu/articles/black-wealth-is-increasin...
Most people get very worried about “death tax”, until they do the numbers on their own estate and realise either it mostly doesn’t apply to them or it’s marginal.
In the UK this is often used as a major campaign point but the number of estates actually subject to it is quite small.
And spousal transfers are hardly generational (most of the time).
[0] https://www.gov.uk/government/statistics/inheritance-tax-lia...
1. https://www.irs.gov/businesses/small-businesses-self-employe...
If you mean "the cost of end of life health care", sure, but anyone inheriting more than $12M can afford the taxes.
> Just over 7,100 estate tax returns will be filed for people who die in 2023, of which only about 4,000 will be taxable—less than 0.2 percent of the 2.8 million people expected to die in the year.
Source: https://taxpolicycenter.org/briefing-book/how-many-people-pa...
The simple fact is homeowners are a large voting block often with the most ability to vote. Gotta keep them happy or its electoral suicide.
Health I can understand cause it takes a long time to produce a Doc, and there is a high demand and low supply dynamic.
But we can easily build housing cheap. Even if the real estate/investment lobby is busy buying up all the "prime" land, its not like the US is a small country to work around them somewhere.
Even the US being a big country doesn't help much. The value of land for the purpose of living on it is largely defined by the infrastructure around a particular piece of land: are there schools, shops, doctors, ... nearby, or do you have to drive through an empty desert for hours to reach them? And unless faster forms of individual travel are invented, this will limit the amount of "usable" land even in an imaginary country with unlimited boundaries.
I'm not going to build a doctors office, or a train, or a corner store next to 10 people. I'm gonna build it next to 100,000 people. And now here we are, where we have space but not really because most of the space is worthless.
Very, very few. Rural areas are disproportionately impoverished. It's just statistical, not personal, and it makes complete sense once you consider what an economy is.
> But I'd never live in a major metro area, that's nuts
Those major metro areas make up the vast majority of the US' economic prowess. You don't have to live in them of course, but you should be aware that the American suburbs and rural areas are essentially on the welfare of more economically successful areas.
Lowering costs to build should, in theory, increase supply.
High demand should, in theory, increase supply.
But other things influence the balance, regulations, interest rates, etc, that are either keeping supply low or demand high, inflating prices.
40% of the US population lives in a coastal county:
* https://oceanservice.noaa.gov/facts/population.html
Two-thirds of the US population lives with-in one hundred miles (160km) of the border:
* https://www.aclu.org/know-your-rights/border-zone
The US population is fairly concentrated, and it seems that many people like living next to other people (for personal and/or economic reasons).
On top of all the above, you have teh general populace, of which a significant portion own housing they want to see go up so you won't ever get to the point where everyone sees the light and overwhelmingly supports you like uber got to, there will always be significant push back from the populace who want to abuse supply constraint to increase their personal benefit at the severe cost to all of us.
- remove the exemption (or reduction) for Capital Gains Tax
- remove Income Tax relief for mortgage interest
- remove any exemption (or reduction) for Inheritance Tax
Not all these advantages exist in all jurisdictions.
Then there are other changes that could mitigate distortions, inequality and volatility:
- separate interest rates for residential mortgages, commercial property, consumption and productive investments (industry, infrastructure, education)
- separate institutions for these different credit markets, with different reserve ratios and other regulations
- promote sound(er) money, to reduce inflation, and reduce the necessity to protect wealth by asset investment
- break cartels of real estate agents and aggregators to reduce transaction costs
- streamline the planning process to enable more houses to be built, without delay and costs of excessive eco/nimby appeals
- level the playing field between landlords and renters (means different things in different local jurisdictions)
Finally, there are more radical combinations of these things, such as removing the claim of mortgage interest as a business cost for landlords, which would raise their corporate taxes and deter high leverage.
- enforce security and building standards to old buildings, this pushing new ones to be built
Japan has this and it is used to enforce new civil engineering tech for earthquake/tsunami/disaster prevention, but it also makes old not up to standard buildings becomes less valuable
I think our homes are not as technological as they should be because we see them as investments to be preserved
How do you propose to do that? If I have money to lend, I'm pretty sure I'll lend it wherever I like the return I get. So interest rates are all related to each other - they should be risk-adjusted equal, because the lenders don't care about anything else.
Something like 2/3 of people in the US are homeowners, your idea of the masses are may not be entirely accurate.
I think the whole world is due for a big societal revamp. The old generation has concentrated too much asset wealth for the productive generation to stay productive.
So it does not help the housing problem all that much - sure there are now houses available in the countryside but no one wants to move there.
Japan has reasonable real estate and yet around 10% is in Tokyo proper, nearly 30% in the greater metropolis. Less than half own their homes.
This study: https://www.sciencedirect.com/science/article/pii/S026427512... from 2023 shows that they're suffering similar issues of intergenerational wealth transfer when it comes to owning homes, specifically if your parents don't help you - you're unlikely to be able to get on the ladder.
There are a ton of homes that are not claimed but purchasing them, their value, the land value are all - as you know - quite different from the US/AUS/India where the value goes up. Different from the UK where you own the home, but lease the land etc.
In general it's only flats (apartments) that are leasehold, the majority of houses are freehold.
>There are a ton of homes that are not claimed
Those are in rural places with dwindling populations, where no one wants to live any more.
It's just that we don't do it because of housing shortages, or the ever popular terraced housing, and people live in some of the worst states.
Looking at the listings in a broad radius around me, there is still a lot of housing built in the 1960s and 1970s being bought and sold quite regularly, and some stuff even older. A house built in 2004 ("a couple decades") would absolutely not be worth the cost to rebuild.
There is some real estate inflation in very desirable parts of the biggest cities because of foreign investment, but I'd say it's limited. There's still lots of new construction going on, though it's slowing due to labor shortages. The foreign investment can only go so far: real estate isn't a great investment here because structures depreciate rapidly, and it's relatively easy to build new housing just about anywhere if you own the land.
So I guess they play a role but even if we erased them we would still be in the same spot.
San Francisco built 74 new units of housing last year. Not 74,000. Seventy four. We could kill all billionaires and housing would not get cheaper in a world like that.
1. https://www.rand.org/pubs/commentary/2022/11/santa-monicas-b...
There are warning signs flashing across all economies without any coherent solutions.
Housing, too, could get similar treatment.
Read Henry George's book PROGRESS AND POVERTY to learn what it is, and his remedy for it.
https://www.nar.realtor/research-and-statistics/research-rep...
the first-time homebuyers age moved up from the historically typical 33 to the current 38 only in the last 3 years which is not surprising given that the rates and thus mortgage payment jumped 2x times while all the other prices and thus expenses also jumped.
I anything the graph tells that the repeat buyers' situation has been worsening over the last 4 decades - from 36 years age to 61 - while the first buyers' one hadn't changed that much - 29 in 1981 to 33 in 2021 - until the last 3 years. So it is more of the story of worsening situation of the middle class.
One of the unintuitive consequences of low interest rates/ZIRP is that the savings rate is abysmal. When I was a kid I remember my first savings account earned maybe 2 or 3% interest annually. Now you’re lucky to get half a percent. People are disincentivized from saving money and instead end up putting savings into investments, which are inherently risky.
This might not be what you want to do, or hear; I know it wasn't what I wanted in my late 20s. But you could own a house within a year or so if you decide you want a house more than living in an expensive area.
I spent my 20s banging my head against an impossibly expensive area trying to find something and perpetually failing (in my case, NYC). In my late 20s I gave up, moved to a very suburban (borderline rural) area and bought a house right away.
In my very suburban (low density suburban, surrounded on two sides by forest) area the library is a 10 minute walk away at toddler-speed so my child has been an avid visitor as soon as started reading a tiny bit. Schools are also walking distance (high school will be a bit farther, but within easy cycling distance, about 2 miles). And yes, we have internet in the suburbs.
Once I got married though there was both more money and a realization that some possibilities (you know I might just pick up sticks and move across the country) were less likely. Plus expanding our family was very possible.
There's a reasonable view that says finding a spouse is a more major undertaking then finding a house. I honestly don't think that's the case. Go out on a date withe someone, if you enjoy it repeat that a few times. After 6 months imagine it'll be that way for the rest of your life,and then ask yourself, is it really that bad? If the answer is no propose marriage.
The US is relatively sparsely populated, while typical wooden homes take less labor and material to build.
That increase in people around 65 buying retirement houses could pull up the average homebuyer age.
The overall average appears to be driven by people who have bought homes before. Anecdotally, the Boomers I know bought houses well into retirement where their parents typically made their last home purchase in their 30s. I am less concerned about housing turnover among older people.
1 - https://www.axios.com/2023/11/20/american-housing-market-old...
- Homeownership comes with responsibilities that people may not want
- They prefer to invest the money elsewhere
- They expect to relocate on timeframes shorter than those that make homeownership a good investment
For upper middle class people the answer is probably having a baby, so you can see why if people are having babies later in life when their incomes are higher, prices rise.
On average people spend about 30% of their income paying off non mortgage debts like credit cards, car loans, and student loans.
I teach my clients how to budget, cut back on unnecessary expenses, pay off their debts, and save up for their goals. On average, after 2 years they are debt free and can save up for a down payment on a home.
Image how much quicker you could come up with a down payment if you could free up 30% of your income plus cut out all the unnecessary spending that's holding you back from achieving your goals.
Healthcare bills are just another debt. Health providers are almost always willing to work out some kind of payment plan and we tackle it the same way we would a credit card or student loan. Additionally, there are things like HSA contributions that can help you save some money on healthcare bills. Usually in the range of 10-20%.
You mentioned doing this as a side gig? If you could give a few pointers to info on how you got started? Sometimes I think it would be rewarding to do something like this at a low-cost or volunteer basis for people who need help.
You could get certified as a financial advisor if you want to give investment advice or look for some financial coaching training programs.
It is literally impossible to own even if you save 200% of your income.
> spent on things they don't need
Do you actually find people who pay you to teach them to stop buying crap? Like, when I get a Doordash I already know it's a waste of money that instead could compound as an investment, but I do it as a treat...
Everyone knows how much their rent and car payment is but most other stuff people have no idea. A lot of people don't even want to look at the numbers on their own so they need someone they can trust to help them face the reality.
Having someone who can sit you down through the process of accounting for every dollar, calls out areas where you're over spending, and helps you create a realistic balanced budget is very valuable.
Plus, there's other things like understanding the most effective way to pay off your debts, how much you could actually afford if you wanted to buy a house or a car, and understanding how to build wealth. Most people lack these skills but are very successful once they learn them.
I've been in an HN thread where people claimed that it's easy to lose track of your subscriptions and accidentally pay for a service for years that you don't use. Like, really? You don't even look at your credit card bill and see what you're paying for, even monthly??? You really just turn on autopay and never even look at your bills?
Accoring to stats, the top 15% of households in the US has an income in excess of $200k - saving half of it and living like a king on the rest should be easy enough, while the median around $75k - even living frugally won't allow you to save a significant chunk of income.
An important thing to understand is that income is not fixed. There are many things you can do to increase it. But even those making below $75k can afford a down payment on a home if they free up the money that's going toward debt, make changes to their budget, and choose an appropriately priced house.
“That’s a historic high, up from an average age in the low-to-mid 40s in the early 2010s.”
Those who are 56 now, were 42 in 2010.