The Boomer hoarding narrative

 If you do a google search for "boomers" and "housing" you'll be unsurprised to see that there's no shortage of media pieces, including traditional media, that peddles the narrative that "boomers" (aka people born between the end of the second world war and the last 1960s) are "hoarding" housing that otherwise would be going to their grandchildren. This is a good example. The narrative mainly runs the same message: there is a housing shortage because somehow, older people have "taken it all". The article quoted is one of the more interesting ones because it does include some actual reliable statistics, and while it skates neatly over the point that Gen X actually had a smaller share of the numbers owning their own homes by 25 compared to millennials, according to the same Stacker data, itself based on US Federal Reserve data.

The article also gets it remarkably wrong when it comes to mortgage interest rates, erroneously stating that interest rates are at a "record-high" - in fact, this is flat disinformation: prior to 2000, rates of 7% would have been considered quite modest, with rates extending to as much as 18% in 1981. Rates didn't drop beneath 12% until 1985, and even then, mostly sat around 10% for the remainder of the decade. This was also accompanied by a collapse in quality union backed work in the US, especially for lower income groups, who faced round after round of lay offs. From 2000-2001, before the 20+ year streak of historically low interest rates, interest rates had sat at 6.8-7% for much of 2000-2001.

The writer, however, does get one point right - as US typically has long range fixed deals, the rapid acceleration in rates has created incentives for existing homeowners to stay put, as they would lose their legacy rates by selling up and re-mortgaging. This, in a "tight" market in the US, exacerbates a scenario where home building is not keeping up with the level of population growth. What the article doesn't say is that the same high interest lending rates also apply to developers and builders, and so they too are disincentivised to build, instead sitting on available development land until more favourable market terms emerge.

A second point missed by the article is that the Stacker data doesn't show the biggest drop in home ownership as being in younger age groups, but in middle aged cohorts aged from 45-64. In fact, the top third of this age group are most decidedly considered to be "boomers" so even this contradicts the narrative.

The next part of the article deals with older people staying longer in their own homes rather than moving into nursing homes. This is portrayed as a result of Covid 19 horror stories, but in reality, older people are actually healthier and likely to live longer than even the current cohort of octogenarians, who would have been born in the 1930s and early 1940s. Those who are hitting retirement age this year would have been born around 1960, so it surely follows that they will be healthier overall than their older generation who were born right in the middle of world war 2.

The final point is about the lack of new build "starter homes" - homes bigger than an apartment but smaller than what the Americans call a "single family home" - such as duplexes or townhouses (which I assume is the equivalent of a UK/Irish "terrace"). It would seem to me that this, and not "hoarding" behaviour by older people, is the key issue, as well as a lack of easy credit at good repayment rates for younger people wishing to buy.