Like most Boomers, I’ve both bought and sold a house. But still couldn’t pretend to comprehend all the economic forces at work that make the housing market function. So when I downsized last year:
If the conversations between myself, my devoted Irish Rose and either the realtor or the mortgage broker got too complicated for this state college grad, I would politely ask them to dumb it down and don’t be afraid to talk to me like I’m four years old. Then remind them that everything I understand about real estate I learned from Margot Robbie in a bathtub:
Fortunately, we do have people who understand the complexities of all the forces exerting pressure on the market. The myriad of factors affecting this most essential part of The American Dream.
And this one particular expert, who has displayed a genius for predicting disasters in the past has declared another one is coming. And it doesn’t take Robbie covered in bubble bath to know the root cause is dudes not getting laid enough:
Source – A financial analyst nicknamed the ‘Oracle of Wall Street’ has said a ‘growing crisis of the young American male’ will cause house prices to fall as much as 30 percent.
Meredith Whitney, who earned the title after predicting the financial crisis of 2007 – 2008, suggested young men increasingly living with their parents and disinterested in starting families will drastically reduce housing demand.
The trend of men refusing to settle in turn means more women are remaining single into later life, leaving them without the income or need for big family homes.
But it comes as baby boomers start to downsize, meaning there will be a surplus of available properties. Much of the last decade’s gains in home values have been driven by high demand and low supply – a phenomenon, Whitney says, is reversing.
To explain the rise in men living at home, she pointed to the increasing prevalence of video games, starting in the mid-2000s. …
Whitney cited US Census Bureau data showing that before the financial crisis around 13 percent of men aged between 25 and 34 lived at home. …
The data also shows that young women have consistently been around twice as likely to leave their parents’ homes. Last year, just 12.3 percent were still at home. …
‘The biggest driver of home prices has historically been household formation,’ Whitney told DailyMail.com. ‘Household formation today is the lowest it’s been in 160 years.’
And household formation, she said, is driven by the ‘five Ds’ – ‘diamonds, diapers, divorce, debt, and death.’
‘Without at least the first two Ds, there’s no reason to buy a home,’ she said.
Before we get into this, a definition is in order:
Oracle or-e-kel – A person (such as a priestess of ancient Greece) through whom a deity is believed to speak. A person giving wise or authoritative decisions or opinions
In the world of Ancient Greece, no great decisions could be made without first consulting the Oracle of Delphi. And it’s clear that Meredith Whitney earned the nickname by predicting the housing crash that everyone but her and the Christian Bale character completely whiffed on.
So what the actual? She’s seeing another one coming because Gen Z has decided to … what, exactly? Stop trying to meet women? Reverse the entire process that has driven all living things since we were just single-celled microorganisms floating around in the primordial soup? The drive to have sex and pass on your genes? They’ve traded in the most powerful instinct in nature – the desire to procreate the species – for 8 hours a day of chasing zombies through a wasteland in Fallout?
Listen, I’m the last guy to use the played out Boomer trope of the guy “living in his mom’s basement.” That’s a tired, lazy stereotype best left for sports radio hosts who have contempt for their audience. But here it is coming directly from one of our most brilliant economists. Her depiction, not mine. And apparently it’s statically proven to be about to tank our entire way of life.
Look, I’m a Live and Let Live kinda guy. If you’d rather slap hookers or whatever you do in GTA than leave the house and try to find actual flesh and blood women who are sexually attracted to you, that’s not my concern. Go live your life. I might not think it’s a life worth living and will judge you quietly to myself, but you do you. (And if that’s you, you’re literally doing yourself.) You have the right to squander your existence and never take a desirable female to the summit of Bone Mountain all you want.
That is, until it starts to affect me. And I say this for all Boomers. I didn’t come this far and invest my entire net worth into my home just to lose it all to a bunch of people I’ve never met who’d rather sit at home on their Playstations, getting fed by their moms and the Doordash guy, instead of going out, being fruitful and multiplying.
Yours has got to be the first generation in human history to get criticized for NOT being obsessed with sex enough. And it’s time you get off the bench and into the game. The great coach called America is sending you in. You owe it us to put down the controllers, climb out the gaming chairs, get out to the bars and clubs and start doing what comes naturally. The financial health of your country – and me in particular – depends upon you to quit being such pusses and start making the babies, already.
It’s not a big ask, afterall. It’s not like your great grandfathers being handed rifles and told to storm Omaha Beach or Iwo Jima. Now get out there and do your patriotic duty. We’re counting on you.
Meredith Whitney, deemed the “Oracle of Wall Street” for successfully calling the financial crisis, says home prices are likely to fall substantially, and the reasons have to do with habits picked up by young guys.
“You have men staying single longer…and then you have what I call a growing crisis of the young American male…they’re twice as likely to live at home than women. So one out of five young men live at home with their parents, and these aren’t young men going to college and coming home for holiday breaks, these are young, grown men choosing to live at home,” Whitney told CNBC this morning.
The outcome could have profound effects on the housing market, she said.
“I think you’re going to start to see housing prices begin a multi-year/decade decline, just due to supply/demand dynamics,” Whitney said. “So you’ve had a demand, supply imbalance: more demand, less supply. And I think that’s going to invert.” So what that means is supply will then outweigh demand, which is why she sees home prices falling for years.
Whitney’s take is based in part on demographic shifts. The bulk of housing is owned by people and households over the age of 40, she said. But household formations are the lowest they’ve been in more than a century, which translates into a demand problem, she said today.
Yet many experts have predicted that home prices will only continue to go up from here. Mortgage rates reached a two-decade high last year, and people were still buying homes—and because there simply aren’t enough homes, demand outweighs supply, keeping home prices high. Whitney, however, is calling it differently as shifts within the housing world, and apparently among young male adults, occur. It’s not clear what data she is referring to here or in the information above.
Whitney argued that lower-than-ever interest rates “ballooned inflation, and particularly housing inflation,” which has priced so many people out of the market. “If you’re single, the chances that you’re going to be able to afford a home on your own is less likely than if you’re a dual-income family,” Whitney said. Then she goes on to say that homeowners hold much more wealth than non-homeowners.
Whitney has long discussed a “silver tsunami” set to strike the housing market as baby boomers age and their homes are freed up. “You’ll see a supply-demand dynamic shift,” the founder and CEO of Whitney Advisory Group previously said, echoing her claims today.
“Normally you would think as rates go up, home prices would go down, and that hasn’t happened over the last two years,” she said. “I think home prices will normalize because as more inventory, more supply comes on the market, you’ll see a true clearing price that is lower than it is today. So I would say 20% lower than it is today.”
Home prices rose 6% in January; a lot of people think they’ll keep going up. In January, Goldman Sachs predicted home prices will rise 5% this year and 3.7% next year. In March, Capital Economics predicted home prices will rise 5% this year. This month, CoreLogic predicted they’ll increase by 3.1% this year (from February 2024 to February 2025).
Toward the end of last year, Whitney said 51% of people over the age of 50 are set to downsize to smaller homes, citing an AARP report at a conference, and it would bring more than 30 million housing units to the market. More supply, or better said, supply that outweighs demand, would trigger a drop in home prices.
However, this concept of a “silver tsunami” has been widely refuted. A recent analysis from Freddie Mac revealed that the 9 million homes set to come onto the market in the next decade as baby boomers age aren’t going to really disrupt the market. For one reason, younger generations will enter at the same time—meaning housing demand will continue to rise. “Some have warned of a ‘silver tsunami’ as aging boomers look to sell their homes, flooding the market with inventory,” the Freddie Mac report read. “But as this analysis demonstrates, the tsunami is more like a tide, bringing a gradual exit that will mostly be offset by new entrants.”
Additionally, Eric Finnigan, vice president of demographics for John Burns Research and Consulting, recently told Fortune that baby boomers aren’t going to crash the market because they’re powering it. His team found it takes about four deaths to equate to one home listed for sale (because a partner might hold onto it, or it may be passed down to children). The number of homes listed for sale due to deaths is rising, and it will continue to, but “it’s not a deluge,” Finnigan said. “It’s not a tidal wave of homes being listed for sale because of all these dying baby boomers.”
This story was originally featured on Fortune.com