What do you get when you mix in a global pandemic, low housing inventory, a Fed that is juicing the markets, a mortgage payment moratorium, and baby boomers addicted to Facebook? You get a market that is being pushed up by house humping boomers while many younger Americans are struggling to get by in rentals or are living at home with mom and dad in quarantine. In this article we will look at two divergent stories – one includes home prices surging on record low inventory while another shows a softening rental market. Let us explore the numbers.

The pandemic has made it harder for younger families to purchase homes in a few ways. Inventory has been severely depressed for a few years and that continues to be the case today. The pandemic has also disproportionately hit younger Americans hard while homeowners are doing well thanks to record low interest rates, tight inventory, and a sudden shift to home being the place for all things. All of this has combined to create a strong market in terms of price but Millennials are being pushed to live at home with older parents for economic reasons. Nearly 40 percent of younger Millennials said in a recent survey that the pandemic has them moving home again. What does this mean for these new households with older parents and adult kids who would like to own but simply cannot afford to do so?

Home prices remain stable in the face of a global pandemic, record high unemployment, and millions of Americans actively not paying on their mortgages through forbearance. Not exactly a rosy picture. On the surface, the stable prices would seem to indicate all is well. But the reality is more problematic in that millions of homes are off the market right now as people are not paying their mortgage via forbearance. For those wanting to buy a home, they are competing with very little inventory. Selling a home right now just does not seem like the best time given the pandemic we are in. In California, housing prices remain stable while millions are out of work and half the state is made up of renter households. The math doesn’t seem to add up but this isn’t a “market” in what many would think as a free market.  

Pre-Covid our cohort of Millennials in California were already living at home in dramatically large numbers. The total was 2.3 million Millennial adults were living at home with mom and dad because they were unable to afford high rents, let alone purchase an overpriced crap shack built during World War II with popcorn ceilings and horrid looking carpet. Flippers think that a little bit of lipstick on the pig is enough to charge $1 million for a piece of junk. It should come as no surprise that Millennials are struggling even more during the pandemic. The bulk of job losses have come from industries where young people dominate. So it is no surprise that the median age of a home buyer went from 31 in 1981 to a whopping 47 today. All of a sudden many of the new buyers are looking like the Taco Tuesday baby boomers that rail against Millennials for not affording a home when they went to college during a time when college was affordable enough to pay with a paper route. Of course many of these older Americans couldn’t program their way out of a paper bag yet rant on social media platforms built by Millennials.