But seriously, fiat

I think wages have been very low for the marginal worker. It’s mind blowing to me to see large trillion dollar companies lay off employees then everyone wonders why young folks don’t have any money to buy anything of substance.

Due to wages being depressed for whatever reason people need a loan or a Buy Now Pay Later for large ticket items.

If people wanted to work and save money for 2 years to buy a car or house it’s nearly impossible.

attempting to wealth transfer to the next generation -> buy a house then gift it to your children. many of these well off boomers have forced withdrawals from their 401k and need to deploy their dollars before they die.

Under federal tax law, the responsibility for the gift tax does not fall on the recipient. Instead, the person who gives the gift, known as the donor, is responsible for paying any applicable gift tax. The Internal Revenue Service (IRS) provides the donor with tools to manage this potential tax liability, meaning in many cases, no tax is actually paid.

The primary tool is the annual gift tax exclusion. For 2024, a donor can give up to $18,000 to any individual without triggering a gift tax or needing to file a specific tax form. Since a house is almost always worth more than this amount, the donor will need to file a gift tax return using IRS Form 709. This form discloses the gift to the IRS.

Filing Form 709 does not automatically mean the donor owes tax. The value of the gift above the annual exclusion is applied against the donor’s lifetime gift tax exemption. For 2024, this lifetime exemption is $13.61 million per individual. Only when a donor’s total lifetime gifts surpass this amount does an actual gift tax become due.

Older buyers have equity, cash, and less debt younger buyers face high prices, stagnant wages, and low supply. The market’s tilted toward those who already own.

Yikes that can’t be a good thing.