This is both astonishing and believable... and really freakin sad.
It's a write-up article for Bloomberg based off this https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5770722 from Nov 2025
(Lee, Seung Hyeong and Yoo, Younggeun, “‘Giving Up’: The Impact of Decreasing Housing Affordability on Consumption, Work Effort and Investment”)
https://m.stacker.news/130907
It just hits differently, I guess, when you're a little bit on that side of the fence (https://stacker.news/items/1422689/r/denlillaapan, https://stacker.news/items/1423402/r/denlillaapan) -- plus, it's really eerie to read a book chapter about Georgist land taxes — popular idea back in the late-19th C, different topic — WHILE Bloomberg publishes this sort of personal-finance/academic paper result.
As economists, we wanted to know how fading hopes of homeownership stand to shape the lives of younger generations in the decades to come. Buying a home is one of the biggest investments most people ever make, requiring them to sock away money for years before expending a large portion of their savings.
We found that as individuals’ perceived likelihood of homeownership diminishes, they systematically shift their behavior: They consume more relative to their wealth, stop working as hard and choose riskier investments such as cryptocurrencies.
From a distance makes perfect sense, a financial barbell strategy:From a distance makes perfect sense, a financial barbell strategy:
you withdraw that extra effort (bc what's the point??), and you go out on the risk curve with what little you have (Hail Mary behavior).
Forgoing ownership may be a rational response to housing becoming unaffordable. Imagine saving diligently for years only to watch already high housing prices sprint even further out of reach. [...] Perhaps these renters are hoping to gamble their way back into the housing market.
Our model shows that a significant share of those who give up on homeownership end up working fewer hours and contributing less in income taxes, shifting the fiscal burden onto others and reducing the economy’s overall productive capacity.
astonishing graph... ZIRP was good for homeownership/The American Dream...?
https://m.stacker.news/130908
I can't see a scenario where this ends well.
archive: https://archive.md/DQE9z
Who lives in all these houses? I think it's Americans, mostly.
My guess is that the demographics are such that Boomers staying in their homes longer than past generations is holding them off the market for Zoomers. Additionally, they may not be able to recover much equity at the prices being offered. Transaction volume has slowed down as prices stay elevated, which suggests the actual market clearing price is much lower than it appears to be.
An unrelated quibble: not all working adults intend to purchase homes, so a median income to median price comparison doesn't seem right. You'd want to compare whichever quantile of the income distribution represents the median homeowner with median home prices.
I agree with that... but that objection just as well for the 2010-2020 episode so whatever bias that creates, I think the graph still adequately conveys the message that there was a big-time structural shift circa 2021.
As for the houses and who lives there... some non-trivial portion investor/foreign/BlackRock stuff, plus I suppose average number of houses owned per household is higher today than ever. I'm just making general observations over here
Plus what you say, and there's no doubt we have a squeezed asset class on our hands
If income gains since 2020 are concentrated amongst homeowners (not an unreasonable hypothesis), then price compared to income may not have changed as dramatically and it would suggest there's an income distribution angle to this story that's important.
As to the institutional share of residential real estate, from what I've seen it is pretty trivial. Although, I don't know how significantly it impacts the normal margins in this market. Homes don't change hands very often, so it could be true that it's both a small share of houses and a large share of transaction volume.
here's another graph on that same topic, courtesy of @Scoresby
#1436212
Pretty dramatic trend reversal, but it only applies to a small share from each income group.
so just browsing the graph, that's a ~5%-point increase from the extreme/artificial lows of covid. From a "health" 2018 baseline we're, what, 3% points higher?
Kind of stuff pretty disturbing
All of them are right where they were in 2016.
The Covid trough is a pure policy artifact, so you at least have to start from those 2020 cliff edges. My reading is that as additional 1% of people from the poorest group are 90 days delinquent, comparing immediately pre-Covid to now.
oh right... maybe I'd like a longer timeframe, assuming the the downward trend coming from high GFC readings... but yeas, yours is a much more obvious interpretation; not sure what I was doing -.-
good reflections, sir. Maybe you should go do the hard work of figuring these things out!
I'm just a lowly commentariat, writing shit and posting stuff
What a toxic way to paint that picture. As if the fiscal burden is non-negotiable and the only way to respond is to work longer hours so the state can take more.
Ask not what your country can do for you. Ask what you can do for your country.
yes, tax slave. You better put your back into it so the retired Boomers can have a good time -- maybe some nice expensive pharma treatment to boot
I am having trouble understanding this sentence.
"Monthly cost of owning a median-priced home as a share of median income in the US"
It makes sense up until, "as a share of median income in the US."
What's that mean? "As a share?" huh?
I'm asking because I want to understand
They just mean divided by
Killer title!
I try my best, browskii
Its funny that this (monetary policy = major reason asset prices move like they do) seems so clear to us, and yet I suspect that if I go ask my neighbor or a person at the gas station or almost anyone, that is not the reason they will give.
Maybe it's genius on the part of the part of the people who run this system: it's distant enough that the consequences of their decisions are never immediately obvious. The treasury and fed can jaw bone but it is hard for a person buying a house to connect the dots between them and the price.
Of course, I say this, and I think about the very direct way that the fed has made it more expensive for people (interest rates).
i mean yeah, when people lose hope, that's what happens, and happens everywhere too, like the lying flat phenomenon in China
Had to look up lying flat. Thank you for that. Did a fun little deep dive there.
I made over 300k last year and have zero debt. I can afford housing and I don't 'gamble.' I just like Bitcoin
ok sir, no need to brag.
My point is that the slant from Bloomberg about 'crypto', the propaganda is that Bitcoin is for degenerates, gamblers, desperate people and has no inherent value. That it's just a big casino.
It's not true.
yeahyea, I don't think anybody here thinks that. That's, like, background noise in trying to hear what tradfi/normies are actually saying.