I think in the UK they have started to offer intergenerational mortgages, considering how unaffordable housing became.
It blows my mind that back in the days people with very simple jobs were able to afford buying their roof, nowadays it is a challenge even for highly skilled professionals if they happen to live in a highly sought city.
intergenerational mortgages
Oh we’re back to generational debt already? Can we start calling it indentured servitude already?
This seems kind of meaningless without comparisons to other generations at the same age. And whether this is unusual or not seems to also depend a lot on socioeconomic class…I don’t think it’s very unusual for well-to-do parents to give some amount of money to young adult children? Actually aren’t a lot of gen Z still in high school? If anything I’m surprised so many millennial parents have extra money to give.
Nearly half, or 46%, of Gen Zers between the ages of 18 and 27 rely on financial assistance from their family, according to a new report from Bank of America.
So not in high school.
And I don’t think these are millennial parents, since the oldest end of millennials would be 42, meaning to have a kid that’s 27, they would’ve had to have kids at 15… So I think this is mostly Gen X, which would be people from 43-58yo.
But why would millennials be cash-strapped? Millennials are 29-42, which should be right in the middle of their careers. They’re not at their income peaks, but they should be getting out of the child care range, which is one of the biggest expenses for a parent (at least until college years).
But why would millennials be cash-strapped?
Most Millennials have been through two market crashes and many are burdened with significant student loans
That’s true for most generations, with the exception perhaps of student loans since there was a big change in 1992. Here are some examples of market corrections/recessions for each generation:
- Gen X - dotcom bust in 2000 and then 2008 - most millenials wouldn’t be impacted too much by the 2008 crash
- Baby Boomers - OPEC oil shock, stagflation in the 80s, Black Monday
- Silent Generation - more frequent recessions in the late 40s, 50s, and early 60s
And so on. Historically, there’s a significant market correction every 8-ish years, on average. Most people will experience 3-4 of them during their peak earning ears, as well as one just before or just after retiring. The 2008 -> 2020 bull run was way longer than usual, and the market corrections weren’t as severe or as long as in the past, so theoretically millennials should be better off than their predecessors, assuming they invest a consistent portion of their income (big doubt).
But at least on paper, millennials are no worse off than any other generation. Student loans certainly add some complexity, but I think that balances out with historically low interest rates, with current rates being a little below the median (as in, our current “high” rates are pretty average).
So what we’re seeing is recency bias in how we remember how the media portrays things. Crises sell, so we’re going to see a lot more negative press than positive press, and we’re going to only remember the press that’s relevant to us (i.e. things from the past 5-10 years).
Bro unironically just handwaved away one of the largest bubbles holding back the American economy and then said Millenials aren’t worse off if you just ignore it
Do you even know what a SLAB is 💀
I’m not hand-waving the student loan issue away, I’m merely saying it’s not as impactful as the media makes it out to be. I’m a massive opponent of the 1992 bill that made student loans much easier to get because we ended up with a bunch of kids taking on debt who don’t know what they want to do with their lives, much less understand the long-term consequences of debt.
However, pointing at student loans in isolation to show that millennials are screwed isn’t reasonable, we need to look at the big picture. Look at home-ownership rates (biased source, but they had a good graphic; there are plenty of others) as an indicator. Millennials lagged previous generations for a bit (perhaps due to student loans?), but they’ve caught up and it’s possible they’ll surpass previous generations. They’re buying houses a bit later, but they’re still buying houses in similar numbers. To me, home ownership is a strong indicator of a healthy economy, because you can’t buy a house if you’re unable to scrap together cash for a down-payment and meet the monthly payments.
So while the student loan crisis is bad, it’s not completely ruining the millennial generation, it just seems to be a unique details, and each generation has those. We should obviously do something to fix it, and my proposal is to allow them to be discharged in bankruptcy and phase out government loans and go back to using grants instead. I think that has the best change of being a “soft landing” since only those who are completely screwed over by it will choose bankruptcy, and those who value their credit will just pay them.
Hillarious, like the problem isn’t that the other half’s parents are too poor to help out. Gen Z’ers wages suck, and so do their parents’ wages, in general.
Might be interesting to ask ourselves, what the natural order really is: is intergenerational support the outlier, or the norm? Historically and across cultures.
For comparisons, intergenerational housing of millennials was often viewed as an anomaly, but in fact it is generational housing that is an anomaly, specifically a product of post-war affluence.
