What percentage of those millionaires are house-rich? I.e. the house they live in just happened to appreciate significantly and is now worth over $1mm? Those people can still feel as if they are not wealthy at all.
We got a good century of usage out of the term, but inflation has certainly caught up with it. A boomer that inherited $1m shortly after the end of WWII would be the equivalent of like $14m today with inflation.
Which is helpful if they want to and are able to move to an area with lower real estate prices. Otherwise that 'wealth' is tied up in a good they are unable to sell (without incurring an implicit debt of either needing to find another house in the same high price area, or having to pay for rent in the same high price area).
A house may be a reasonable investment vehicle; it can also be an extremely illiquid one.
Certainly. If they've actually purchased the home, and are not mid-mortgage on it. Honestly, crunching the numbers in my high COL area, the cost for a ~$1 million mortgage and the cost for renting a nice two bedroom, at the current rates, are basically the same.
Essentially what you're saying is that because someone has put money into mortgage payments instead of rent, they're better off financially, and I'm completely in agreement with you. I just don't agree that it somehow implies they're living high on the hog, so to speak; yes, they have additional options if shit hits the fan (metaphors metaphors!), in that they can cut their losses, look to sell, and move to a lower cost area and have a bit banked (and -maybe- retain their income given remote work, but also maybe not), but that's still quite a lot to expect.
The scenario in this thread was originally "the house they live in just happened to appreciate significantly and is now worth over $1mm". You're describing quite a different situation.
That owner by definition does not have a $1m mortgage - or if they do, they have quite literally cashed out.
That owner is, in fact, saving a proportion of everyone else's general housing costs, compared to new buyers and ongoing renters.
Someone with a $1m mortgage is in quite a different situation (while likely very rich in terms of net worth, does not have to be a millionaire in terms of net wealth).
I mean yes, but when you've built your life in a place, it's little comfort being a "millionaire" if the only way to cash in on it is to pull up stakes and move hundreds of kilometers away.
I suspect arguments like this are even less comfort to people who have rented apartments their entire lives and aren't sitting on a million dollars of property.
If you cash out for a million dollars I'm positive you could find somewhere to rent in the city you currently live in. Maybe not a kilometer away but certainly fewer than hundreds.
It's old retired people, mostly, I guarantee it. One million dollars doesn't mean what it used to. If you hit 65 and don't have at least a million dollars in retirement accounts, you'll be working as a Wal-Mart greeter. Healthcare's insanely expensive, even on medicare. A "household" at retirement is probably two people, so that's half a million a person and you're "millionaires" but sure can't live like the term implies. Retire at 65 a low-end "millionaire" and your kids may well not inherit jack-shit. It'll all go to hospitals and hospice care and such, before the end.
Add in that Boomers skew much richer at the same stage in life as later generations, and that they're a large chunk of retired people, and yeah, "1 in 25 households are millionaires" just means half or 1/3 of retired people aren't living on cat food, and were actually able to retire. Hooray.
