patrick.net

Need a lot more college educated dual income Americans having kids for the demand curve to get better

This is a 2020-2024

We had great demographics for housing years 1996-2007 but not for total ownership society

Logan Mohtashami says

Need a lot more college educated dual income Americans having kids for the demand curve to get better

Need a lot more jobs for college educated Americans. Not more call center, warehouse worker, lettuce picker, barrista jobs.

At least this cycle is legit with the demand curve

thunderlips11 says

Need a lot more jobs for college educated Americans. Not more call center, warehouse worker, lettuce picker, barrista jobs.

First time home buyers are running just 10% below their historical avg.

Educated Americans are buying homes, the rest are renters as they should be, they don't make enough money to a buy a home.

If dual income college educated Americans age 28-35 weren't buying in this cycle, then I would have a different take on it.

My bearish demand curve thesis for this cycle was based on DTI, LTI and PITI factor model for 2008-2019 time frame.

That changes come 2020-2024, remember we are working from a very low adjusted to population bar for those years

Call it Crazy says

Home ownership by age

That chart is exactly my point come years 2020-2024

Demographics were very strong come years 1996-2007 and were very soft for prime first time home buyer age in this cycle

30% fake demand curve from buyers in that cycle, not just the exotic loans but the economic cycle itself wasn't real either

However, come 2020-2024 the demographic pool of first time home buyers will simply be much more

Call it Crazy says

Who are these 30% first time home buyers in America?

exactly again!

College educated Americans with dual incomes are buying

High school drop outs
Non college educated Americans
Drug Users
Criminal Active Americas

This group is struggling to buy homes, shocking

Anti education group has failed once again this cycle.

If you're not going to finish school get a skill set that makes money, welding is an example

Come 2020-2024

College educated Americans with dual incomes we will be buying more homes because there will be simply more of them.

High school drop outs, college drop outs, drug users and criminal active Americans will be renting

so the scale goes between 63% and 69% - is that really a big deal?

landtof says

so the scale goes between 63% and 69% - is that really a big deal?

Yes, the scale of people with even a half a percent move is very big in real terms.

as in, why should we be concerned about this? (compared to less than half of americans owning a home)

landtof says

as in, why should we be concerned about this? (compared to less than half of americans owning a home)

The demand curve for housing adjusting to population is the weakest we have seen in America post WWII

However, it's happening at the lowest interest rate cycle we have seen post WWII

So, the question going forward, is this the start for a economic 40 year cycle of a renting based society

Or is this a correction from the excess of housing bubble to which demand was inflated due many variable factors related to the economic cycle.

Government subsidize housing to own but not to rent. So, the MID, capital Gain, low down payment low fico loans the government supports is really based on you owning your home.

I will tell you this, the forced saving thesis from the government is something they like, so the wealth effect is a concern for them.

This is why the number is shown as a concern.

Rigged markets for everyone ! Real Estate, stocks, bonds. Step right up, muppets. Yes you can

P.S. How do you like John Stewarts's secret "Monica" meetings with Obama in the White House. Yum, John. Hum John.

with open borders and h1b implementation, why would you think this was even possible?

Countries ranked on maths and science
1. Singapore
2. Hong Kong
3. South Korea
4. Japan (joint)
4. Taiwan (joint)
6. Finland
7. Estonia
8. Switzerland
9. Netherlands
10. Canada
11. Poland
12. Vietnam
13. Germany
14. Australia
15. Ireland
16. Belgium
17. New Zealand
18. Slovenia
19. Austria
20. United Kingdom
21. Czech Republic
22. Denmark
23. France
24. Latvia
25. Norway
26. Luxembourg
27. Spain
28. Italy (joint)
28. United States (joint)
30. Portugal
31. Lithuania
32. Hungary
33. Iceland
34. Russia
35. Sweden
36. Croatia
37. Slovak Republic
38. Ukraine
39. Israel
40. Greece
41. Turkey
42. Serbia
43. Bulgaria
44. Romania
45. UAE
46. Cyprus
47. Thailand
48. Chile
49. Kazakhstan
50. Armenia
51. Iran
52. Malaysia
53. Costa Rica
54. Mexico
55. Uruguay
56. Montenegro
57. Bahrain
58. Lebanon
59. Georgia
60. Brazil
61. Jordan
62. Argentina
63. Albania
64. Tunisia
65. Macedonia
66. Saudi Arabia
67. Colombia
68. Qatar
69. Indonesia
70. Botswana
71. Peru
72. Oman
73. Morocco
74. Honduras
75. South Africa
76. Ghana

thunderlips11 says

Need a lot more jobs for college educated Americans. Not more call center, warehouse worker, lettuce picker, barrista jobs.

I remember those days of double digit interest rates as the Fed tried to stop runaway inflation. I would love to get double digit interest on my CD's.

Call it Crazy says

increase government spending,

How much higher do you want this to go?

So why did you post a chart of Federal debt? That isn't government spending.

It's mostly Medicare, Social Security, Interest Payments and Military.. We actually as a % to total GDP didn't really spend much in this cycle outside of those 4 and the usual items on the budget

shows how the demographics are driving renters growth, most people in their 20s ain't going to be buying, so if they move out of their parents' place it's going to be in a van by the river or an apartment.

Logan Mohtashami says

Come 2020-2024

College educated Americans with dual incomes we will be buying more homes

plus there will be the beginning of the Boomer Die-Off, median boomer will be 65 in 2020, potentially freeing supply.

In California tho thanks to Prop 13/58 protection it'll make tons of sense to convert these properties into rentals.

Great job, Howard Jarvis.

Ages 17-29 are big

Ages 21-25 are the biggest in America

Come 2020-2024

Those who have graduated college, dual income family having kids will buy homes, just like that group is doing now

However, by that time frame, we will simply have more of them in the system as supply to own.

bob2356 says

You are going to have more supply of prime home buyer people those years? True. You are also going to have an unprecedented number of people selling houses because they are dying or gong to nursing homes. How do those numbers balance out?

More buyers and more sellers if that theory comes true.

I am only talking about the net demand buying curve. Inventory has it's own problem in terms of getting supply out there.

For this cycle as always, it's been a demand issue

Annual months of inventory:
Note we have never had 6 months AMI supply with the exception of the housing bubble burst years.
1999- 4.8 months
2000- 4.6 months
2001- 4.6 months
2002- 4.7 months
2003- 4.3 months
2004- 4.3 months
2005- 4.6 months
2006- 6.5 months
2007- 8.9 months
2008-10.4 months
2009- 8.8 months
2010- 9.4 months
2011- 8.3 months
2012- 5.9 months
2013- 4.9 months
2014- 5.2 months
2015 still over 5 months
Notice the 2006-2011 years that had major supply chain of homes
Sales started to fall... then we had the home buyer tax credit which juice the sales short term and then it fell again
And even today, with more inventory than the housing bubble years, adjusted to population sales are going to be down
-13% compared to the year 2000
- We had 40 million less Americans
- We had 18 million less Americans
- Rates were 8 % back then too

This is a Demand story...

For inventory economics

Also, if you follow the outdated affordability index

- Everyone has 20% down
- 740 Fico ( Less than 10% CC Debt to Balance)
- Starting DTI of 25%

cough cough water please...

This means you need at least 28%-33% equity to sell, pay transaction cost, and have 20% down to move up, without adding any cash into the equation

i want to say something but I don't eat meat on fridays....

bob2356 says

because they are dying or gong to nursing homes.