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As editor in chief of Professional Remodeler, a lot of information crosses my desk. This blog will be a chance to share some of that with you, with an immediacy not possible with a monthly magazine. It's also your chance to tell me what you think about what I have to say. Whether you agree or disagree, I hope you won't be shy. Post here, write me at jonathan.sweet@reedbusiness.com or you can also follow me on Twitter at www.twitter.com/sweetedit.
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Monday, March 2, 2009
How the housing bubble has hurt Baby Boomers
Mar 2 2009 12:28PM | Permalink | Email this | Comments (1) |
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By Jonathan Sweet
The Center for Economic and Policy Research is out with a new study (pdf) that examines the effect the housing collapse has had on baby boomers. To put it simply, it ain't good.
"The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble" (pdf) reports that the collapse has left baby boomers as a whole poorer than previous generations and will also leave them more dependent on government entitlement programs than older Americans, as well.
From the executive summary:
[A]s a result of the collapse of the housing bubble, millions of middle class homeowners still have little or no equity even after they have been homeowners for several decades. These households will be in the same situation as first-time homebuyers, forced to struggle to find the money needed to put up a down payment for a new home. This will make it especially difficult for many baby boomers to leave their current homes and buy housing that might be more suitable for their retirement.
Other highlights (lowlights?)
- Renters as a group now have more wealth than homeowners as "the collapse of the housing bubble led to the destruction of much or all of their wealth."
- The double whammy of the collapse in home prices and the crash of the stock market has left most baby boomers with insufficient savings and not enough time before retirement to accumulate necessary savings. "Therefore, they will be largely dependent on social insurance programs to support them in retirement."
- The median net wealth of those 45 to 54 in 2004 was $172,400. In 2009, it is $101,800. The median equity in real estate for that group was $83,600, with projections as low as $6,600 for the average household by the end of the year.
- For those 55-64, net wealth has dropped from $315,400 in 2004 to $168,800 this year. Their equity in real estate has dropped from $142,000 in 2004 to as low as $53,000 by the end of the year.
Reader Comments
at 3/3/2009 6:27:10 PM, Worstgeneration said:
You''ll be surprised if you think those of us who are younger are going to support the baby boomers. We''re not going to hand over 80 percent of our paychecks to keep their spoiled asses comfortable.