I came across a NY Times article by Samuel Moyn titled Older Americans Are Hoarding America’s Potential which has some good data but I fear mislabeled the sentiment. First, a grounding fact:
“Older Americans own much of the most desirable real estate in the country’s best cities, and they are not moving. The 70-to-74 age group has the highest homeownership rate in the nation — above 80 percent — and those 75 and older are close behind. The median age of a home buyer was barely 30 in 1981; by 2024, it was 56.”
Mom and Dad, and Grandma and Grandpa, won at the Game of Life. Good onya! Their home ownership rates and subsequent rise in wealth due to home ownership should be celebrated. Even if by accident, well done on making good decisions, consistently, for decades. That’s really hard to do and should not be forgotten.
The fact is that it is harder to purchase a home now than it was a generation ago. No arguments there. Housing stock is a finite resource. Categorically true. It is expensive to live in desirable places. Again, true. But all of this will be family wealth, eventually (note: assumes there is a will which is not true of 50% of homeowners today, yikes!).
But I bristle at the notion that their ability to live in their homes is “hoarding America’s potential.” A human’s potential is not defined by what others may or may not have. It is only limited by a human’s determination, execution, and willingness to go again.
The real issue is that inheritance is delayed. Families used to get help when the Next Generation was 30, but now the inheritance help isn’t coming until aged 50-60+ which exacerbates the situation.
Can Mom and Dad help the Next Generation access a portion of their inheritance today, tax free, with no money leaving their bank accounts? Yes, they can. Do they have to? No, they do not. It’s their money. But even before we get into all of that, we need to understand what the overall estate situation is. Let’s organize it before we try to optimize it. We can help ourselves and our families move forward…