Is there a home shortage or just a pretty home shortage for the two home or dual temperature boomer? The simple sale of a boomer “down-sizing” releases a large amount of stored equity that in turn spurs economic growth for the overall economy. Millennials took advantage of the lowest mortgage rates in forty years to move from apartments, take out a mortgage to buy a big house they will grow into. The seller now has unleashed the Tasmanian devil of consumption and buys two properties. Each transaction stimulates home updating, new appliances, travel, new cars and leisure activity. Low mortgage rates prompted by quantitative easing artificially spurred the housing market.
According to the Fed’s data, Boomers control 53% of wealth, the silent generation (not to offend but nursing home and small apt of the elderly) control 17%. Both demographic groups spend most of their time tax planning to leave a legacy and spoil their family. The equity that has accumulated over many years of mortgage payments and appreciation is then replanted into a place where it is warm in the winter and another that is nice in the summer.
If 70% of wealth is in the hands of those over 65 and 20% of the population is in poverty, that leaves about 20%. Does that make sense? I never been told that the ownership rate is calculated by owner’s name or LLC structures. Dual Temperature Boomers – The root of the home shortage.