Tuesday, 23 April 2024

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The ‘growing crisis of the young American male’ could send home prices falling for years or even decades, says the ‘Oracle of Wall Street’

The ‘growing crisis of the young American male’ could send home prices falling for years or even decades, says the 'Oracle of Wall Street’

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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…

Click Here to Read the Full Original Article at Fortune | FORTUNE…


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