I live in the USA and I am concerned about the future. I created this blog to share my thoughts on the economy and anything else that might catch my attention.
People think "inflation" will push up housing, like it did in the 1970s.
I'd like to think "inflation" will push down housing.
But this thesis is just applying theory and not referring to history, where cost inflation creates wage inflation which lifts all boats including housing.
Gen Y isn't getting any younger, and being a boomer echo it is pretty massive, compared to Gen X.
For a while both Gen Y and the boomers will be in the same housing market. This should introduce supply pressure, if household formation can ever get going again.
Even hyperinflation wouldn't be all that kind to homeowners as money would be diverted from rents into food. Many people can live in a single household in order to save money if basic necessities rise in price (especially if wages don't keep up).
People think "inflation" will push up housing, like it did in the 1970s.
ReplyDeleteI'd like to think "inflation" will push down housing.
But this thesis is just applying theory and not referring to history, where cost inflation creates wage inflation which lifts all boats including housing.
Gen Y isn't getting any younger, and being a boomer echo it is pretty massive, compared to Gen X.
For a while both Gen Y and the boomers will be in the same housing market. This should introduce supply pressure, if household formation can ever get going again.
http://tfw.cachefly.net/snm/images/nm/pyramids/us-2020.png
Troy,
ReplyDeleteEven hyperinflation wouldn't be all that kind to homeowners as money would be diverted from rents into food. Many people can live in a single household in order to save money if basic necessities rise in price (especially if wages don't keep up).
No easy way out for what ails us.