January 25, 2017

Perceived vs. actual barriers to homeownership for young adults

Filed under: Uncategorized — Benjamin Vulpes @ 8:55 p.m.

Via Barry:

As the U.S. emerges from the Great Recession, there is concern about slowing rates of new household formation and declining interest in homeownership1, especially among younger households. Potential reasons2 that have been posited include tight mortgage credit and housing supply, changing preferences over tenure in the wake of the foreclosure crisis, and weak labor markets for young workers. In this paper, we examine how individual housing choices, and the stated motivations for these choices, reflect local housing affordability and individual financial circumstances, focusing particularly on young households. The analysis makes use of new individual-level data from the Survey of Household Economics and Decisionmaking (SHED). We find that housing affordability is correlated with county-level tenure rates and individual-level probability of homeownership for households with heads under age 40. However, it appears that young households’ perceived barriers to homeownership are more closely related to individual financial circumstances than local housing market conditions.

The barriers that faceless bureaucrats driving the Federal Reserve System perceive to be headwinds against the MBS's they bought in the depths of the mortgage meltdown are like all narratives boiling over out of the cauldron of word salad, sputum and crushed dreams that is the United States Government: utterly irrelevant.

The actual barriers to homeownership and household formation among young adults in America are properly twofold: crippling debt and no boners. As every generation under socialism must (and as their ancestors did with Social Security), the Boomers built a spectacularly effective engine to extract what meager earnings their children (the Millennials) might scrape together into their own hands in the shape of the Higher Education racket3. That generation (beyond all reason convinced of its righteous feminism in the absence of anything beyond lip service paid to the plight of sex workers in this country) saddled mine with crippling debt and has the temerity to ask "why can none of the kids afford to play the greater fool for my real estate paper?". "No boners" simply means that they also hosed the gender paradigm so thoroughly that women simply cannot find men who aren't even preemptively self-castigating, much less worth incubating the sperm of.

Preemptively self-castigating dick operators are exempt from the burdens of manhood, and salary-scrapers saddled with crippling debt from the burdens of homeownership. All of which is entirely fine, as in another decade Facebook/Oculus will be the defacto government agency of Placebo Reality where the dick-holders can be tidily sequestered from the women desperately hunting actual men with whom to mate and in whose environment sane children may be raised, and nobody sane wants the burden of homeownership anyways, it's only even halfway sensible if the mortgage deductions push you over the alternative minimum threshold and omfg who has enough personal deductions to even approach the alternative minimum deduction in the first place? Get a corporation and pipe all of the even halfway reasonably deductible expenses through that and then take the AMD on your personal return.


  1. The only people concerned about the slowing rates of new household formation are statists who want to expand the captive populace of salary-takers and the homebuilding industry. The rest of liberal America thinks that household formation is bad, contributing to overpopulation and Anthropogenic Global Warming. Conservative America doesn't waste time on inscrutable economic numbers like "household formation rate", preferring instead to drink fermented corn syrup and apply forced induction hardware to their commodity foreign-made "cars". []
  2. Not actual reasons, note. []
  3. It accrues to their stock portfolios by way of JPM & Co.'s holdings in usurious loans to children whose parents failed to teach them the implications of debt that cannot be discharged through bankruptcy. []


  1. You forgot the "simply not interested in serfdom, don't care how great a deal on paper" folks.

    • Benjamin Vulpes says:

      Aye, although "serfdom" is far broader than simply homeownership, and there's no sign of slack in the dollars pouring into 401K's the nation across.

  2. "Got everything, in my momma name" - Big Tymers (Mannie Fresh)

    One thing I've seen some people do is buy their parents' house for cheap, while keeping the deed in their parents' names. Depending on how the deed is inherited, the house "stays in the family" (assuming you don't get a generation of pure fuck-ups). I think its more practical to roll the deeds into an "anonymous LLC" or what-not longer term, particularly if you want to shield your name from prying eyes on public records.

    • Benjamin Vulpes says:

      Unfortunately, one foregoes the "first time homeowner tax credit" by doing this, and one will always have to deal with the liquidity crunch of transferring assets across generations.

      The standard (among Jews with property to defend against the rapacious state) is to put everything into a managed trust. Prying eyes not in the slightest a concern next to avoiding estate taxes.

  3. Main hazard of mortgagetronic "ownership" is not financial, as commonly supposed (a mortgaged serf can just as easily pack off and emigrate to Botswana as a renter could, if he is willing to lose ~everything~ that doesn't fit in the suitcase, be tried/sentenced in absentia, etc.) but rather --a psychological hazard.

    House "owner" suffers, or at least runs the risk of suffering, the illusion of wealth. This is arguably more destructive of sanity than simply being a pauper is. Given the option of inhabiting a mental universe where you "own a house", and "are wealthy", and look forward to "a retirement", and similar baubles, quite a few otherwise-intelligent people give in.

  4. Benjamin Vulpes says:

    The same could be said for all of the "golden handcuffs" by which salarymen are bound to le etat. 401k's, for instance, are ~unhedged against inflation, and their underlyings ~unprotected from nationalization. Sure they appear to offer all sorts of fantastic tax advantages but at the cost of giving up liquidity for your entire life.

  5. To all such "bargains" (as described by mircea_popescu) in general, aha. Jam-tomorrow!

  6. Also AFAIK nobody forces folks to play the 401K chumpatron. (yet)

  7. Benjamin Vulpes says:

    The Secure Choice plan would require small employers to auto-enroll workers in an IRA.

  8. Benjamin Vulpes says:

    and AND the 401k "employer match" is effectively a 401k mandate. Chumpatronic, absolutely, but if you accept the thesis that the 401k will not be worthless, then you must max out the employer contribution to get the free money.

  9. The 401K system is great for a handfull of people. I am retiring with >$1M in 401K, $3K/month in SSN, and $7K/month in rental income from real estate. Fiats are scary when you hold money, and not so scary when you have business's and properties. Gimme da fine depreciation! Use section 179 to deduct everything when you want. Use the system, or it will use you. Proud to be a 1%er.

  10. Benjamin Vulpes says:

    You really prefer to keep your cash in government securities to bitcoin? How strange...

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