Are Boomers to blame for the housing mess?
Those wild and crazy Boomers. They grew up trying to overthrow capitalism and spent the late 60s and early 70s throwing temper tantrums on college campuses across the country.
Then they joined the business world and went hard in the other direction, bequeathing to us an increasingly ruthless, no-holds-barred business world that would make the robber barons of old blush.
From there it was only a couple of small steps to the out of control real estate market that imploded so spectacularly and which came close to plunging us into another Great Depression.
Now the boomers want to pull up the ladder behind them, calling for 20 percent down payments and draconian lending standards for a market they helped to deregulate.
Of course, that's just too bad for all those Gen Yers now getting out of college with huge student loans - they'll just have to rent.
OK, I am being deliberately provocative here - in fact, although I do fess up being a Gen Xer, I think 20 percent down is actually a pretty good idea.
Still, I wonder whether there is not a generational angle to this hopeless housing mess we are all mired in.
I have to credit Bynxers for raising my generational radar a bit. She takes on the Boomers and the 20 percent down idea, which she contends would pretty much end the American Dream for her generation.
As a Gen Y member, I will openly state- of course I am going to go with an FHA loan. Older generations keep forgetting- today's young people were herded into colleges and universities en mass because it was THE ONLY WAY to have a successful career. If you graduated high school between 1998 and 2004 this bills of goods was hammered into your head every day by parents, teachers and principals.
So what did we do? Tuition prices kept going up, our parents could only pay so much, working part time could only cover so many of your expenses, scholarships (if awarded) were usually partial at best, and grants and awards were nowhere to be found for most middle class students.
Most of us then took out loans. The colleges pushed it and made it easy, so did the government, and even our high schools were willing to assist.
Boomers and even Gen X don't have this massive burden of student loans. If we wanted a good job we HAD TO go to college, which for many of us meant WE HAD TO take out loans.
That debt burden IMMEDIATELY puts nearly an entire generation out of contention for traditional private mortgages with the banks, because our debt to income ration is too high and we would never be able to amass 20% ($60,000) as long as we keep paying Sallie Mae and the Feds 1/3 or more of our monthly income.
So sorry- yes, bring on the FHA loans- because Boomer- while WE pay for YOUR retirement and Medicare- WE should have the option of owning home.
Afterall, most of YOU had nice houses to live in growing up because YOUR PARENTS took advantage of a government program to own a home through Veteran's Affairs or FHA when you were kids.
Don't kick the chair out from underneath the generation that is going to be paying for your golden years through likely higher taxes....
And trust me, we aren't deadbeats- most of us are engineers, computer programers, nurses, etc.
We as Americans love to think we are "rugged individualists" who "pull ourselves up by our bootstraps". Guess what- Manifest Destiny and the Great Expansion West- was government subsidized... Starting farmers homesteads was government subsidized. Cowboys supplying the growing beef industry, riding across Texas- were government subsidized. The entire state of Alaska- "The Last Frontier" and all the "rugged and individualist" and "free" Southern and Western States- are, yup... government subsidized.
Get over it. I'll put 5% down, make my money payments ON TIME for 30 years and pay my taxes to support our massive elderly population. All while we having to clean up the mess generations before made and saving for our own retirement.
Hooray.
