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nfinf  27d ago (nfinf.substack.com)   1638 thread views

How good the boomers had it

nfinf.substack.com

Inspired by some of the conversations we had here about the experiences of previous generations (especially with /u/the_nybbler, and yes, I know you're not a boomer), I wrote up a post that challenges a common narrative of how good the boomers had, and how screwed the millennials are. Main point is that the houses were not that much cheaper relative to now, and the interests rates were murderous. Enjoy!

(I'm a regular poster here, but I wanted to separate the identities for opsec purposes).

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Main point is that the houses were not that much cheaper relative to now, and the interests rates were murderous. Enjoy!

This is much closer to boomer average, and in fact, is more than what some boomers had to pay.

Think about it: so much griping for measly $200/month difference. But hey, maybe the millennials are so whiny because of no wage growth, so this actually means a lot to them? Let’s look into that.

You are missing something big: as soon as interest rates dropped, boomers could refinance to a lower rate. So that high interest rate was not paid during the entire 30 years of the mortgage. Someone really needs to do the boomer versus millennial home-payment comparison taking refinancing into account. When a millennial is buying the home at rock bottom interests but still having the same payment as a boomer paying a 12% interest rate, the millennial has no prospect of further reducing the payment in a future refinancing.

While that's true, they still had to be able to afford the original mortgage payment. The complaint of millennials is that they can't afford to buy a house now, not that they can technically afford to buy it now but that it's unsustainable to own it more than a few years unless they can reduce their payments. Wile some boomers certainly benefited from interest rates going down, it isn't an assumption you can make at the time of purchase. It should also be noted that this was also a time when lenders expected you to have 20–30% of the purchase price in cash at closing for a down payment. It seems like down payments now are basically a formality. I mean, you need them, but when I suggested paying the traditional 20% for my house the general opinion was "nobody pays 20% anymore".

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