{"id":13398,"date":"2024-11-18T18:20:48","date_gmt":"2024-11-18T18:20:48","guid":{"rendered":"https:\/\/topat10.com\/?p=13398"},"modified":"2024-11-18T18:20:48","modified_gmt":"2024-11-18T18:20:48","slug":"the-oracle-of-wall-street-says-home-prices-need-to-fall-20-to-end-the-generational-schism","status":"publish","type":"post","link":"https:\/\/topat10.com\/?p=13398","title":{"rendered":"The \u2018Oracle of Wall Street\u2019 says home prices need to fall 20% to end the \u2018generational schism\u2019"},"content":{"rendered":"\n<p>Baby boomers own more homes than millennials and Gen Zers, creating a \u201cgenerational schism\u201d in the world of housing, according to <a href=\"https:\/\/fortune.com\/company\/meredith\/\" target=\"_blank\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/fortune.com\/company\/meredith\/\" rel=\"noopener\">Meredith<\/a> Whitney, the \u201c<a href=\"https:\/\/fortune.com\/company\/oracle\/\" target=\"_blank\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/fortune.com\/company\/oracle\/\" rel=\"noopener\">Oracle<\/a> of Wall Street,\u201d who once predicted the Great Financial Crisis.\u00a0<\/p>\n<div>\n<p>Boomers aren\u2019t selling, and that\u2019s a problem. \u201cThey\u2019re not selling because they\u2019re aging in place, because they can\u2019t afford to go anywhere else,\u201d Whitney said last week in <a href=\"https:\/\/www.cnbc.com\/video\/2024\/11\/14\/meredith-whitney-generational-home-ownership-schism-is-stagnating-sky-high-u-s-home-prices.html\" target=\"_blank\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/www.cnbc.com\/video\/2024\/11\/14\/meredith-whitney-generational-home-ownership-schism-is-stagnating-sky-high-u-s-home-prices.html\" rel=\"noopener\">an interview<\/a> with <em>CNBC<\/em>. \u201cUntil they sell, you\u2019re going to have this real standoff between sellers and buyers.\u201d<\/p>\n<p>So what\u2019ll it take? Well, home prices have to fall; Whitney said prices need to drop about 20%. But that price decline would only take us to the price levels of three or four years ago before the pandemic and its corresponding housing boom. Plus, people would still have a lot of equity in their homes, Whitney explained, so it wouldn\u2019t be a housing crash.\u00a0<\/p>\n<p>At this point, it doesn\u2019t make sense for a lot of people to sell their homes because they have either <a href=\"https:\/\/fortune.com\/2024\/06\/17\/lock-in-effect-mortgage-rates-interest-housing-market\/\" target=\"_self\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/fortune.com\/2024\/06\/17\/lock-in-effect-mortgage-rates-interest-housing-market\/\" rel=\"noopener\">locked-in<\/a> a low mortgage rate or they own their home <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2023-11-17\/amid-high-mortgage-rates-higher-share-of-americans-outright-own-homes\" target=\"_blank\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/www.bloomberg.com\/news\/articles\/2023-11-17\/amid-high-mortgage-rates-higher-share-of-americans-outright-own-homes\" rel=\"noopener\">outright<\/a>. To give that up would likely mean a much higher <a href=\"https:\/\/fred.stlouisfed.org\/series\/MORTGAGE30US\" target=\"_blank\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/fred.stlouisfed.org\/series\/MORTGAGE30US\" rel=\"noopener\">mortgage rate<\/a>, and a much more expensive home. Considering an unwillingness to sell from older generations, that leaves fewer homes for younger generations to buy; those that are for sale are, in some cases, unaffordable because prices continue to rise since supply is tight\u2014and mortgage rates are higher than what people are used to.\u00a0<\/p>\n<p>In some cases, people list their homes at exorbitant prices and sell if they get an offer, or stay if it doesn\u2019t meet their expectation, Whitney said. Sales are <a href=\"https:\/\/fortune.com\/2024\/01\/19\/housing-market-2023-existing-home-sales-lowest-since-1995\/\" target=\"_self\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/fortune.com\/2024\/01\/19\/housing-market-2023-existing-home-sales-lowest-since-1995\/\" rel=\"noopener\">depressed<\/a>, particularly at the middle and lower tiers of the market, whereas <a href=\"https:\/\/fortune.com\/2024\/07\/25\/ultra-rich-scooping-up-mansions-luxury-homes\/\" target=\"_self\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/fortune.com\/2024\/07\/25\/ultra-rich-scooping-up-mansions-luxury-homes\/\" rel=\"noopener\">luxury<\/a> is sort-of carried by all-cash offers, she added. \u201cSomething has got to give in the regular market,\u201d Whitney said. \u201cI think you\u2019re going to start to see home prices go down.\u201d\u00a0<\/p>\n<p>\u201cFor homes to be affordable, that\u2019s going to have to happen,\u201d she added. Whitney said she wrote a letter to whoever won the presidential election, telling them they have to let home prices drop, and it wouldn\u2019t be the end of the world, for one, because \u201cdemand may be overstated.\u201d (She didn\u2019t provide any other details on the letter).\u00a0<\/p>\n<p>In <a href=\"https:\/\/fortune.com\/2024\/04\/12\/crisis-american-male-home-prices-gaming-loneliness-oracle-wall-street\/\" target=\"_self\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/fortune.com\/2024\/04\/12\/crisis-american-male-home-prices-gaming-loneliness-oracle-wall-street\/\" rel=\"noopener\">an interview<\/a> with <em>Fortune<\/em> earlier this year, Whitney said she sees home prices falling 30% partly because young, single men are living at home, playing video games.\u00a0<\/p>\n<p>\u201cUnless you\u2019re creating a household, there\u2019s no reason to buy a house,\u201d she told me, at the time.\u00a0<\/p>\n<p>That\u2019s just one part of her prediction. The other phenomenon that could lower home prices is the so-called <a href=\"https:\/\/fortune.com\/2024\/02\/29\/baby-boomer-housing-silver-tsunami\/\" target=\"_self\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/fortune.com\/2024\/02\/29\/baby-boomer-housing-silver-tsunami\/\" rel=\"noopener\">silver tsunami<\/a>, which refers to baby boomers and the supposed millions of homes that\u2019ll flood the market in the next decade as they age and downsize and their homeownership\u00a0rates decline. The two together would mean more supply, less demand, and falling prices, Whitney said. But it wouldn\u2019t be a housing crash, in her mind. Instead, it\u2019d be almost a reversal of the soaring prices fueled by the pandemic and once ultra-low mortgage rates, she argues.<\/p>\n<p>But here\u2019s the thing: home prices almost never go down. And in our current housing cycle, a shortfall of homes, to the tune of millions, is fueling that trend. If the situation were to reverse itself as Whitney has predicted (through supply that outweighs demand), it could be plausible that home prices could fall. But others in the industry have dismissed the silver tsunami phenomenon, suggesting the incoming supply, freed up by <a href=\"https:\/\/fortune.com\/2024\/03\/08\/baby-boomers-silver-tsunami-housing-crash-homes-eric-finnigan\/\" target=\"_self\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/fortune.com\/2024\/03\/08\/baby-boomers-silver-tsunami-housing-crash-homes-eric-finnigan\/\" rel=\"noopener\">baby boomers<\/a>, wouldn\u2019t be overwhelming and would be offset by younger generations that want and need homes.<\/p>\n<\/div>\n<div data-cy=\"subscriptionPlea\"><b>How many degrees of separation are you from the globe&#8217;s most powerful business leaders? <\/b>Explore who made our brand-new list of the <a href=\"https:\/\/fortune.com\/ranking\/most-powerful-people\/?&amp;itm_source=fortune&amp;itm_medium=article_tout\" target=\"_self\" class=\"sc-93594058-0 fowfrQ  \" aria-label=\"Go to https:\/\/fortune.com\/ranking\/most-powerful-people\/?&amp;itm_source=fortune&amp;itm_medium=article_tout\" rel=\"noopener\">100 Most Powerful People in Business<\/a>. Plus, learn about the metrics we used to make it.<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Baby boomers own more homes than millennials and Gen Zers, creating a \u201cgenerational schism\u201d in the world of housing, according to Meredith Whitney, the \u201cOracle of Wall Street,\u201d who once predicted the Great Financial Crisis.\u00a0 Boomers aren\u2019t selling, and that\u2019s a problem. \u201cThey\u2019re not selling because they\u2019re aging in place, because they can\u2019t afford to [&hellip;]<\/p>\n","protected":false},"author":275,"featured_media":13399,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[123],"tags":[],"class_list":["post-13398","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The \u2018Oracle of Wall Street\u2019 says home prices need to fall 20% to end the \u2018generational schism\u2019 | Unlock Informed Choices with Us<\/title>\n<meta name=\"description\" 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Botros","author_link":"https:\/\/topat10.com\/?author=275"},"uagb_comment_info":0,"uagb_excerpt":"Baby boomers own more homes than millennials and Gen Zers, creating a \u201cgenerational schism\u201d in the world of housing, according to Meredith Whitney, the \u201cOracle of Wall Street,\u201d who once predicted the Great Financial Crisis.\u00a0 Boomers aren\u2019t selling, and that\u2019s a problem. \u201cThey\u2019re not selling because they\u2019re aging in place, because they can\u2019t afford 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