Below is a special Friday Night Chartcuterie, cross posted from Twitter.
Alright team. I am That Guy that's gunna blast dozens of charts into your stream on a Friday. Not sorry, and please feel free to mute. Following are excerpts from an excellent Morningstar report on housing. It's a special Friday Night Chartcuterie; will repost to Ello.
Homeownership rates have been falling, and are now below "normal" (start of 1990s) when adjusting for demos.
Those demos are about to shift as the largest generation enters the period during which ownership rises fastest.
This is a shift; current housing demos are massively unfavorable, especially after an insane overbuild 1990 - 2007.
Another tailwind: big racial homeownership gaps that can (hopefully!) fill, plus immigration.
Other tailwinds: former mortgage borrowers (defaulted) can boomerang back in now; ownership extremely affordable.
But now we come to the travesty. You see, there's high youth unemployment. Gotta have a job to buy!
You also need to have a sustainable debt level. Whoops. Millennials have a huge amount of debt, as do 30-somethings.
Why though? We're getting more educated, sure, but not that much more educated. What's up?
The reason: real tuition has soared, resulting in nominal indebtedness. Which is now pinching mortgage borrowing.
Y'know how youngs don't have jobs? Well, weird, only one age group is seeing wage gains in real terms through time.
More explicitly: Millennials had a higher cost of education, got no raise for it, and are being crowded out on Q and P by older workers.
More student debt used to mean more borrowing of all kinds. Now everyone has student loans, regardless of other debt.
Luckily, existing home turnover is basically normal again. Overall, there should be big growth ahead for new homes.
And by the way, those homes aren't gunna be in the urban core. Suburban bliss is our destiny kids!
This concludes Charctuterie Friday Night Special. Thank you for your patience in demolishing your streams. Normal Chartcuterie tmr/Sunday.
