Thoughts on the Bailout?

hs_teacher_IHB

hs_teacher_IHB

New member
I've always known that White people are more likely to be wealthy homeowners than minorities - ownership rate of 75% versus 50%. But a lot of my White friends aren't wealthy nor own a home, But now, I just found out that people aged over 55 are much more likely to own than those under 35 - it's 80% versus 40%.



So.... does society favor the old or White, while making it harder for the young and the minorities?



Is the bailout helping out homeowners with plenty of wealth?



And is it making it harder for the young and the minorities?



I used to think that Whites have it better off than Minorities.



Now I realize that the real issue is that the older generation has it better off than the younger generation.



Apparently, in housing, age discriminates more than race.
 
[quote author="hs_teacher" date=1223093934]I've always known that White people are more likely to be wealthy homeowners than minorities - ownership rate of 75% versus 50%. But a lot of my White friends aren't wealthy nor own a home, But now, I just found out that people aged over 55 are much more likely to own than those under 35 - it's 80% versus 40%.



So.... does society favor the old or White, while making it harder for the young and the minorities?



Is the bailout helping out homeowners with plenty of wealth?



And is it making it harder for the young and the minorities?



I used to think that Whites have it better off than Minorities.



Now I realize that the real issue is that the older generation has it better off than the younger generation.



Apparently, in housing, age discriminates more than race.</blockquote>


More older people own homes because they make/made more money, saved more, could come up with a down, etc. It's a function of time, not discrimination.



Just to make sure you understand this, pull out your salary schedule and check it out. Look hard at it, what do you see? You may or may not notice that as you add years of experience, you step up on the salary scale. See how a teacher with 10 years experience makes $25K more than a first year teacher? Probably easier to afford a mortgage isn't it. Also, additional years of credit history would presumably yield a higher credit score, making mortgages easier and/cheaper to obtain. Also, younger people tend to be more transient when they are single. As they age, marry, have families, they are more apt to put down in roots and purchase as a result.



Sometimes I'm amazed they gave you a credential...
 
Age discrimination is a result of financial discrimination. It takes time to save up money for a downpayment and get the income necessary to sustain it. It used to be that very few people in their 20s could own because they lacked both the downpayment and the income. During the bubble, downpayment requirements were eliminated, and with liar loans, the income requirements were eliminated too. Unfortunately, it has created a generation of 20 somethings that believe home ownership is easy, or worse yet, an entitlement. The reality of saving for a downpayment and making enough money to afford a mortgage is going to be a difficult adjustment for many.



I guess Ipo beat me to it...
 
and as for whitey...



a number of studies have shown that much of the disparity has to do with two things: differing education levels/salaries, and family wealth. interestingly, even for similar salaried white and non people, there is still a disparity in ownership rates. this has been attributed to intergenerational family wealth (parents helping out with downpayments). perhaps this last thing explains the reversal of many asians (though not all) from the normal "minority" pattern
 
[quote author="ipoplaya" date=1223095622][quote author="hs_teacher" date=1223093934]I've always known that White people are more likely to be wealthy homeowners than minorities - ownership rate of 75% versus 50%. But a lot of my White friends aren't wealthy nor own a home, But now, I just found out that people aged over 55 are much more likely to own than those under 35 - it's 80% versus 40%.



So.... does society favor the old or White, while making it harder for the young and the minorities?



Is the bailout helping out homeowners with plenty of wealth?



And is it making it harder for the young and the minorities?



I used to think that Whites have it better off than Minorities.



Now I realize that the real issue is that the older generation has it better off than the younger generation.



Apparently, in housing, age discriminates more than race.</blockquote>


More older people own homes because they make/made more money, saved more, could come up with a down, etc. It's a function of time, not discrimination.



Just to make sure you understand this, pull out your salary schedule and check it out. Look hard at it, what do you see? You may or may not notice that as you add years of experience, you step up on the salary scale. See how a teacher with 10 years experience makes $25K more than a first year teacher? Probably easier to afford a mortgage isn't it. Also, additional years of credit history would presumably yield a higher credit score, making mortgages easier and/cheaper to obtain. Also, younger people tend to be more transient when they are single. As they age, marry, have families, they are more apt to put down in roots and purchase as a result.



Sometimes I'm amazed they gave you a credential...</blockquote>


I don't mean illegal discrimination. I'm not even referring to discrimination with the loan application. I'm just saying younger people have it worse off in homeownership.



How many times have I heard parents say, "Wow, I wouldn't be able to afford a house now if I was your age."



1. If you check your facts, real income has actually decreased between the last generation and this.



I have a friend who's parents are teachers. They have kids who are teachers. Even they admit that their teaching salaries afforded them a much better lifestyle than their kids' salary.



My point is that the racial disparity is almost a given. As for the age disparity, by the time someone was 30 in the past, they could have a career, a house, and a family. Nowadays, a 30 year might have a career, but not the other two. I have many friends who make more than their parents. Yet their parents could afford a house, but they can't.



Obviously length of time on a job will increase a person's salary. But younger folks still have it worse off even if they make more than their older counterparts.



ipop, there's no need for you to tell us the sky is blue. i totally understand and agree with your point. i just think it's not addressing my point.
 
Does anyone have stats about homeownership rates in the 1940's, 1950's and 1960's? I think it's a misperception that the prior generation got married, had a home, and had kids all by the time they were 30. I know many people in the "prior generation" who lived in rental "flats" for years after marriage, and after kids. My grandparents never owned any real estate, my parents bought their first house after 25 years of rental living, and many of their friends never purchased a home, despite being solidly "middle class." My dad was a mechanical engineer, his friends were engineers, small business owners, machinists, etc.
 
[quote author="centralcoastobserver" date=1223119975]Does anyone have stats about homeownership rates in the 1940's, 1950's and 1960's? I think it's a misperception that the prior generation got married, had a home, and had kids all by the time they were 30. I know many people in the "prior generation" who lived in rental "flats" for years after marriage, and after kids. My grandparents never owned any real estate, my parents bought their first house after 25 years of rental living, and many of their friends never purchased a home, despite being solidly "middle class." My dad was a mechanical engineer, his friends were engineers, small business owners, machinists, etc.</blockquote>


Home ownership rates rose after WWII due to the widespread use of 30-year fixed-rate conventional mortages (prior to that all mortgages were interest only with very high equity requirements.) The figure stabilized at about 62% in 1950, and it remained at that level for the next 45 years plus or minus a few percentage points. The rate began to rise in 1994 with the emergence of subprime lending. It peaked at about 70% in 2005. With all the subprime foreclosures, the rate is falling, and by the time this mess is over with, it will be back down to its historic levels.
 
[quote author="IrvineRenter" date=1223123781][quote author="centralcoastobserver" date=1223119975]Does anyone have stats about homeownership rates in the 1940's, 1950's and 1960's? I think it's a misperception that the prior generation got married, had a home, and had kids all by the time they were 30. I know many people in the "prior generation" who lived in rental "flats" for years after marriage, and after kids. My grandparents never owned any real estate, my parents bought their first house after 25 years of rental living, and many of their friends never purchased a home, despite being solidly "middle class." My dad was a mechanical engineer, his friends were engineers, small business owners, machinists, etc.</blockquote>


Home ownership rates rose after WWII due to the widespread use of 30-year fixed-rate conventional mortages (prior to that all mortgages were interest only with very high equity requirements.) The figure stabilized at about 62% in 1950, and it remained at that level for the next 45 years plus or minus a few percentage points. The rate began to rise in 1994 with the emergence of subprime lending. It peaked at about 70% in 2005. With all the subprime foreclosures, the rate is falling, and by the time this mess is over with, it will be back down to its historic levels.</blockquote>
So subprime lending emerged in the early 90s? And how did subprime lending come to be...via Michael Milikan's junk bond sources?
 
Finally, I can afford a home in Orange County......... soon!



The fantasy is over. The fun is gone. Your dream home is about to be foreclosed. Wake up AMERICA! Deal with your reality.





Bailout type...........................................................................Cost to taxpayers (Source: Reuters)

Financial bailout package approved this week....up to or more than $700 billion

Bear Stearns financing....................................................................$29 billion

Fannie Mae and Freddie Mac nationalization...................................$200 billion

AIG loan and nationalization...........................................................$85 billion

Federal Housing Administration housing rescue bill.........................$300 billion

Mortgage community grants............................................................$4 billion

JPMorgan Chase repayments..........................................................$87 billion

Loans to banks via Fed's Term Auction Facility................................$200 billion+

Loans from Depression-era Exchange Stabilization Fund................$50 billion

Purchases of mortgage securities by Fannie Mae & Freddie Mac....$144 billion

POSSIBLE TOTAL..............................................................................$1.8 trillion+

NUMBER OF HOUSEHOLDS PER U.S. CENSUS....................................105,480,101

POSSIBLE COST PER HOUSEHOLD...................................................$17,064+



http://news.cnet.com/8301-13578_3-10057618-38.html
 
Discrimination. Hmm. Makes me think about watching Maxine Waters on C-Span from a couple years ago (not to mention other members of the Congressional Black Caucus) getting all defensive when others suggested that Freddie and Fannie's lending practices needed to be reviewed.... over concern that people wanted to once again disinfranchise certain minority groups... and now their very constituency (that they could have been looking out for) has been screwed over in this housing debacle... and their desire to avoid a good hard look at the problem that everyone on this board saw two years ago. Sorry, but it makes me think, "you bought what you got. Tough crap." It doesn't take a rocket scientist to figure this stuff out, or to quote an inarticulate Representative, "a Rocket Surgeon" (he really said that)...



Personally, I'd let the market crash away. We have turned into a society of individuals that are too afraid of the consequences associated with teaching hard lessons... and we are all weaker for it. The lessons of the depression lasted for decades. The lessons of this bail-out will probably last a couple of weeks. How does that help this nation.
 
[quote author="hs_teacher" date=1223116959]



I don't mean illegal discrimination. I'm not even referring to discrimination with the loan application. I'm just saying younger people have it worse off in homeownership.



How many times have I heard parents say, "Wow, I wouldn't be able to afford a house now if I was your age."



1. If you check your facts, real income has actually decreased between the last generation and this.



I have a friend who's parents are teachers. They have kids who are teachers. Even they admit that their teaching salaries afforded them a much better lifestyle than their kids' salary.



My point is that the racial disparity is almost a given. As for the age disparity, by the time someone was 30 in the past, they could have a career, a house, and a family. Nowadays, a 30 year might have a career, but not the other two. I have many friends who make more than their parents. Yet their parents could afford a house, but they can't.



Obviously length of time on a job will increase a person's salary. But younger folks still have it worse off even if they make more than their older counterparts.</blockquote>




You are living in the wrong part of the country. I have a cousin who bought and can can afford his house in Texas when he was 24. If you want to be able to afford a home on a teacher's salary you should move to the midwest or anywhere out of California.
 
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