If your grandparents managed to fully own a home, that greatly influences your parent's and your financial health today. Think about not worrying about mortgages or costs in rent because you have a place to stay. While your parents or you may opt to find a new home elsewhere, there's that option to wait and save up money compared to families that don't own the place they're staying in. Your grandparent's financial decisions dictate your financial health right now because generational wealth advantage is good predictor to how much opportunities become accessible to you.
This is why affordable housing is a big deal when you want to keep the middle class count sustainable. If people have the security of having their own home, they would have more room to allocate their budget for investments or luxuries which is still a win for the economy. You can't really expect much from those living in poverty as these are groups that are economically vulnerable and are unlikely to be able to lend from conventional financial institutions. It's the middle class that spends more and this spending fuels the economy.
I was talking to a patient the other day about his worries and one of the recent sources of his stress was his parents selling their grandmother's home against his grandmother's dying wish. It was a large property relative to what usually middle class families can afford and the children decided to sell it in exchange for some condominium units which they had to finance further with mortgages Now this patient was financially literate and understood how this decision fucks up their future generation but his parents had other priorities in mind so not much can be done there. And the whole thing didn't even change their financial circumstance and probably got them into even more debt due to the additional mortgages and pursuit of raising their lifestyle.
I find myself in the same situation but managed to convince my folks not to think about selling the house. Once this is gone, there's no other member in the family that could afford a place of the same value and it would take 2 to 3 generations to recover what is lost. Think of the average price of a home and how much you're going to pay your mortgage over the course of acquiring that home. You don't have to think about slaving yourself to pay that amount if your family owns one. And even if you want to start living somewhere else, your parents could probably give you
Your parents get handed some extra cash to purchase their own home. And this frees up the financial constraints which let your parents focus more on accumulating more assets to invest on. If all goes well, you end up inheriting the fruits of your previous generation's labor and compound to these advantages throughout your lifetime for the next generation.
Trying to get a house to day is starting adulting life at hard mode especially when you can't count on generational wealth to back you up. If you're concerned about your kids and your grandkid's future, getting a mortgage as a middle class is one of the greatest financial risks of your time. You only need to miss some payments to ruin years worth of track record while you never even owned the deed. But that's the risk everyone has to consider as a middle class, if you don't own the house you stay in, it's going to be you, your kids and grandkids that is going to feel this financial decision.
Thank you for your time.