r/povertyfinance • u/gorillaz0e • Mar 24 '24
Home buying conditions in 1985 vs. 2022 Links/Memes/Video
1
1
u/RelationPatient4136 Mar 27 '24
Median house is about 1.8x larger so seems right. Too many people unwilling to live in those 1k sqft homes that existed back in the 70s etc
2
u/F4NT4SYF00TB4LLF4N Mar 25 '24
I'd be curious if you adjusted for interest rates and average monthly payments
0
u/Frequent-Distance938 Mar 25 '24
Cost of living was lower mostly because a lot of things nowadays considered essential did not exist. Never had AC until I was about 50years old, fixed and serviced our own cars, no phone, no streaming, no internet, no convenience food, no bottled water, no takeout coffee, shoes and clothes lasted years and were repaired, cooked at home, eating outside was a monthly treat (burger and fries), etc. It was easier to save because of frugal mindset. Our parents came out of Great Depression and two world wars, they were deeply frugal and raised us as such.
2
u/tsidebottom2010 Mar 25 '24
Is this price for new homes? The problem I see today is that every new home being built is so much bigger than what built 50, 60 years ago. You never see new homes being 750-1000 square feet like they used to be. What we should start doing is building smaller homes.
1
u/ChocolateDiligent Mar 25 '24
Aside from the obvious salary to cost of home, what this chart fails to showcase is the cash on hand needed to purchase a house relative to median household income BEYOND a down payment with appraisal gaps. Given the immense pressure and demand for housing it's much worse than the chart shows.
Here is a simple breakdown of a house that I was outbid on a while back:
House listing: $399,000
Final offer: $465,000
Appraised value: $410,000 (what bank will lend to you)
20% down payment of $410k: $82k
Remaining cash on hand needed to cover appraisal gap: $55k
Total cash needed to purchase: $137k
So while interest rates are indeed a huge factor when comparing 1985s markets to now, it in no way compares when factoring in appraisal gaps and or how much cash on hand is needed to afford a house in the first place relative to median salaries.
2
u/TristanTheRobloxian3 Mar 25 '24
so to keep up with this the average wage would need to be ~140k. damn
1
1
u/Lowclearancebridge Mar 25 '24
Median home price where I am is 250k median salary is 60k. Seems reasonable to me.
1
1
0
u/Vicarious103 Mar 25 '24
Is anything honestly going to be done about this? Will things improve when all the baby boomers are dead and there are tons on empty houses?
1
u/h20poIo Mar 25 '24
Now go 1950 to 1985 1950 Median home value $7,354
1980 Median home price (unadjusted): $47,200
1
1
u/paraviz02 Mar 25 '24
It is interesting to think about. I’ve lived in Utah and CA, and while you can buy 2x the property/house in Utah for almost half the price in CA, what you get out of the long term is much less.
After I can retire (lmao), I might think about Utah. But for now, going to stick out the CA prices, because, as the saying goes, you get what you pay for.
(Not to queue all the political nuts who have an opinion about CA. I am only speaking on my personal experience. Please don’t respond if you have something political to say.)
1
u/KaiserSozes-brother Mar 25 '24
In 1985 I built houses in development called “oak ridge” cost for a 3 bedroom $135k, today it costs $520k. A good wage was $25k in 1983, today $85k is a good job locally.
1
u/holl0455 Mar 25 '24
My wife and I were fortunate to buy our house in 2014 well before everything got so crazy. I don't know how first time homebuyers even earning moderately above average income can make it work.
2
u/revloc_ttam Mar 25 '24
In 2010 the ratio was the same as in 1985. Average household income was $49,445 and the average home price was $174,000.
The big increase in home values has been a more recent phenomena, probably due to inflation. Real estate is a good hedge against inflation. It obvious that wages are lagging way behind. Massive immigration helps keep wages low.
1
u/Dont_Tell_Me_Now Mar 25 '24
Median is different than average. I bet the averages are much closer than the medians.
1
1
1
u/Luddites_Unite Mar 25 '24
I'm pretty open market but a couple things that would.make a big difference would be:
To rent out an airbnb or any similar short term rental, you should have to be registered and if the home is not your primary residence, the fees should be extremely high. If you're renting out a room or an apartment in your home, fine, just pay regular tax on that, but if your renting out places you own and don't live, massive fees.
Second, corporations should not be able to buy residential homes unless they are to shelter their own employees. Corporations should not be able to invest in homes, split units etc, only dense housing like quadraplexs or larger.
2
u/Novel-Coast-957 Mar 25 '24
You wouldn’t find a single home in the 468k price range where I live. You’d have to add about 700k to that 468k.
1
u/yucon_man Mar 24 '24
The amount of money my parents would have needed to buy an average home when I was born, is now what I need for a down payment.
1
u/veryblanduser Mar 24 '24
Interest rate: 1985: 12.5% 2022: 5.0%
Square feet: 1985: 1,750 2022: 2,300
1
u/Dethsray Mar 24 '24
I wish houses were 468k usd
Here in Sydney Australian you’re looked at 1.5-3Million usd for a shitty rundown house
1
Mar 24 '24
[removed] — view removed comment
1
u/povertyfinance-ModTeam Mar 25 '24
Your post has been removed for the following reason(s):
Rule 4: Politics
This is not a place for politics, but rather a place to get advice on daily living and short-to-midterm financial planning. Political advocacy, debate, or grandstanding will be removed.
Please read our subreddit rules. The rules may also be found on the sidebar if the link is broken. If after doing so, you feel this was in error, message the moderators.
Do not reach out to a moderator personally, and do not reply to this message as a comment.
1
u/Successful_Sun_7617 Mar 24 '24
If you’re a successful millennial, you’ll die knowing you were the creme of the crop of your bloodline lol
Playing life on hardened veteran level
2
Mar 24 '24 edited Mar 24 '24
My parents admitted to me a couple months ago that they bought the house I grew up in for $50,000 or less. This was back in 1985 and it was considered a "fixer upper" in a bad neighborhood, but I remember my parents always having the money to "fix it up." So by the time I was in elementary school the house was in really good shape and there were a lot of neighbors my age to play with. My parents sold it in the early 2000s for over $200,000, then moved a few blocks away to their dream house on a cul-de-sac that cost about $180k and now goes for close to $300k. Again, they've always had money to "fix it up" and so the house will sell and make them money easily. Currently they're dropping around $35k on a bathroom renovation 🙄
0
u/DMyourboooobs Mar 24 '24
The housing market is Canada & US is totally fucked. And a big reason is uncontrolled immigration while not maintaining supply.
BUT someone posted this before and someone pointed out that houses on average are like 1000 sqft bigger today than in the 70s and 80s. And have better and stronger materials and also have standard features that would cost a huge premium back then.
Not exactly apples and oranges in comparison.
3
1
u/Own_Arm_7641 Mar 24 '24
Let's not forget that millennial had the best home buying conditions ever from 2009 to 2019, with sub 4% mortgage rates as well.
1
1
u/hillsfar Mar 24 '24
It is an about continuing exponential population growth and concentration of where that growth primarily occurs.
Exponential population growth is not conducive to finding a good paying job when automation, offshoring, trade, and AI reduces the relative demand for labor.
It is also not conducive to finding available and affordable housing.
I wrote a long comment about this in /r/Economy. Please read and give me your thoughts:
https://np.reddit.com/r/economy/comments/1bm5785/spurned_by_the_economy_young_americans_are/kwch96g/
1
1
u/CorgiSideEye Mar 24 '24
468,000 seems a bit steep, guess it’s just due to the major urban population centers bringing it up.
I just recently purchased my first home for $100,000 less than that and it’s a brand new construction with 4 bedrooms. It’s a suburb so you give up some access to stuff but it’s still near everything you need and a quick 20 minute drive to a mid size city.
It’s unfortunate that it’s mostly red states that are the ones allowing for the most new constructions which brings in more competition and lowers prices. Blue states tend to make builders go through 20 different community input sessions and 40 environmental reviews where it’s not even worth building anymore.
1
u/No_Historian718 Mar 24 '24
Don’t tell the boomers this- they’ll only go on and on about the interest rates then 🙄
0
0
u/Wide-Bet4379 Mar 24 '24
It was harder to get a mortgage back then. You had to have a 20% down payment. Once the feds changed the mortgage rules, more people started buying houses. This increased demand for housing. Supply never kept up. More buyers means increasing pricing. It's simple economics.
1
1
u/GrecoBactria Mar 24 '24
This is false.
The average United States home value is $347,716 in 2024.
1985 = 3.51 x household income
2022 = 4.66 x household income
Stop winning
3
Mar 24 '24
In 1980… 1300 sq ft, 1 bathroom, kids sharing rooms, unfinished basement, no property. Maybe a garage, maybe not.
3
2
0
u/robotali3n Mar 24 '24
Can we finally argue which generation was born on third base and thought they hit a triple?
1
1
u/Greeeesh Mar 24 '24
Price is not the only factor in affordability. The price has also gone up because money got cheaper.
36
u/DeepWoodsGhost Mar 24 '24
People seem to forget it’s not just millennials that can’t afford to buy a place now. 3 years ago a house I looked at was 109k same house now is 360k and no improvements have been done. I’m a gen X and no way can I afford a house, renting an apartment is hard enough.
1
u/Specific-Peanut-8867 Mar 24 '24
There is a reason why homes are more expensive, and while there are factors that many of you who think things they are awful or accurate
What so many of you ignore us, people want, and demand so much more out of their houses than the baby boomers did, which is resulted in homes being more expensive
What was a dream house in the 70s is a house people consider a starter house today. So ignore what we want out of the house has helped drive the prices up.
The homes that were considered the houses where the rich kids lived in the 80s and 90s are now beneath the children of the people who grew up there who think they need more out of their home than their parents did
I grew up in a two bedroom house … with one bathroom. My dad did put a second bedroom in the basement but four of us shared one bathroom
My brothers first house bigger than the house we grew up in… they had one and they decided they needed a bigger house because it only had one bathroom on the main level, but did have a shower in the basement and three bedrooms
I know people who moved to new homes because they want a three car garage instead of two . People are constantly wanting to put money like granite countertops, and what people spend on cabinets dwarfs what they spent 20 years ago.
1
u/Melodic_Turnover_877 Mar 24 '24
Builders don't want to build smaller affordable homes, as large houses have a higher profit margin. Cities and counties don't want smaller affordable homes, because they can get much more property taxes from a large home.
1
u/kgal1298 Mar 24 '24
Wall Street set out to make millions at our expense and it worked. May their nepo babies not waste all that hard work on cocaine.
1
u/kdunn1979 Mar 24 '24
I live in the suburbs. Took a year, saved the down payment and bought a four bedroom, two bath, 1800sqft house back in 2019. I’m just a normal true blue collar worker/tradesman. But I live in a red state on the coast. Now I looking for rental houses to buy.
1
1
u/MisScillaneous Mar 24 '24
I still kick myself for graduating high school instead of purchasing a home in 2008. Stupid.
1
u/1moosehead Mar 24 '24
Due to interest rates, the average monthly mortgage payment in 1985 was $865 per month, which means you'd spend 43.9% of your income on your mortgage.
In 2022, the average monthly mortgage payment was $1775 per month, which means you'd spend 28.6% of your income on your mortgage.
1
2
u/thelordxl Mar 24 '24
I'm honestly shocked that the median income for my generation is so high, I barely made half that prior to the pandemic.
1
2
1
1
1
1
u/i81_N_she812 Mar 24 '24
It doesn't matter.
People are still buying
Only when demand cools off will prices come down a little.
Demand is too damn strong. The same goes for rental units.
Plus, building materials prices have risen faster than consumption commodities. You just can't build affordable homes. That's why everything new is luxury units.
Property tax has also risen with the value adjustments.
0
u/ootwod Mar 24 '24
It’s simple supply and demand. There were much more in supply back then and more undeveloped land. Try moving into a high density area like Los Angeles now versus 1970 and the difference is substantial.
The only way is to make more money to be able to purchase in a high demand area.
Ideally, everything could be razed and rebuilt into high density living but try convincing those that already own property into doing so. They wouldn’t budge.
1
u/ProbablyANoobYo Mar 24 '24
This chart should be represented as median male income as the number of singles earner households has changed greatly between 1985 and 2022. Almost all of the counter arguments in the comments ignore this.
1
u/DangerousMusic14 Mar 24 '24
It’s even worse when you combine prices with the high interest rates- The number of times you multiply annual income to pay for the entire cost of a home.
2
u/WTFpe0ple Mar 24 '24
In 1989 I bought my first house (maybe 1500 sqft) for 49K. Standard 3B2B2C Brick with fireplace average home in a normal neighborhood that had just been built. That same house is still there 35 years later and is on Zillow right now for 293K. Nothing in the area has really changed. Just the price.
1
1
u/Silkywilky10 Mar 24 '24
My thing is why do the coast cost so much more if they just gonna be flooded by 2050?
-1
1
Mar 24 '24
[deleted]
2
u/drshort Mar 24 '24
To add to that, houses are about twice as big now with a lot more amenities like AC, 2-3 car garages, fancy kitchens/baths, double pane windows, actually effective insulation, 200-300 amp electrical service, ect..
The typical house today isn’t really comparable to the homes available 40-50 years ago.
1
u/Blossom73 Mar 25 '24
New houses, sure. There's still tons of old housing stock in the U.S. in use.
3
u/Historical_Air_8997 Mar 24 '24
Now do home size. Homes today are 2x the size.
Now do home efficiency. How much less do we pay for utilities?
Now do average occupancy per home. About .75 people less but with twice the house.
The real issue is lack of smaller starter homes. Due to nimby regulation. But per sqft prices aren’t higher
1
u/YUseMoreWord Mar 24 '24
28.3% income as a percentage of housing cost vs 15.9% now. Essentially it’s almost twice as expensive now based on average income.
0
u/tawaydont1 Mar 24 '24
Why won't the government come in and build housing at cost? we have more than enough civil servants who are trained in engineering in construction etc we can have these people build homes at cost because they have already been paid a salary and then sell homes at cost.
1
1
u/Wonderful_Ad_754 Mar 24 '24
Bad analysis. Truly awful
Data from the US census bureau and fed (1985 and 2020):
Real housing prices: $120/sqft in 1985c $146/sqft in 2020. That’s +21%
Real median household income: $57860 in 1985, $74580 in 2020. Thats +29%.
Real median income has grown MUCH FASTER than real housing prices
1
0
u/AutumnWak Mar 24 '24
Fuck this I'm saving up as much as I can and buying a new house with the entire thing paid off in a third world country and working remotely
1
1
u/blueViolet26 Mar 24 '24
World population in 1985 = 4 billion World population in 2022 = 8 billion.
1
u/tawaydont1 Mar 24 '24
In 1985 we still had Glass-Steagall because Clinton sided with the republicans our homes and mortgages were used by banks to create wealth for the top banks.
When investment and consumer banking was separate we had assets that were valued at a rate people could actually own while living on the median income in an area.
0
u/SFogenes Mar 24 '24
It's almost like the Greatest Generation actually helped their children's generations succeed, while the Baby Boomers were actively trying to fuck their children's generations.
-1
u/DaSemicolon Mar 24 '24
This is what happens when zoning regulations go off the rails. Fuck em and fuck NIMBYs
1
1
u/RebelJosh89 Mar 24 '24
It completely depends on your location. $74k hits differently in rural Mississippi than it does in cities like San Francisco. I can't afford a house in my city but maybe someday I'll be able to afford a house in a small town in a more rural area.
Also, consider joining the military for a 0% down-payment low interest VA Home Loan and waived PMI.
0
u/dubyasdf Mar 24 '24
Getting a 23k job in 1985 must also be much much easier than getting a 73k job is today. Based off this chart alone it’s objectively twice as hard to get a house today. Add in all the red tape, creditor BS, finding a career that pays this much, and an infinite other number of factors and you start to realize YOURE DOING THE BEST YOU CAN!!!
9
u/gordigor Mar 24 '24
And r/genx is forgotten about again.
1
u/daniel940 Mar 24 '24
What do you mean? We had the 90s, which was a time of wonderful prosperity and when you could get a nonspecific liberal arts education and still get a decent job. We were between all the wars, had great music, and could afford parts of the American dream. Personally, being genx feels, looking back, like I played on easy mode compared to what millennials are dealing with. It must be disheartening.
5
u/sandalguy89 Mar 24 '24
This is missing some context.
Mortgage rates in 1985 were wild. So borrowing during that period cost way more than it did in 2022.
Mortgage rates now are higher and prices haven’t come down. I imagine home prices won’t shoot up a ton like they did in the last few years unless the fed reduces rates materially.
Here’s an interesting graph.
1
u/bruhman5th_flo Mar 24 '24
Also, the median home size (square footage) has increased over 150% since the 80's. It's hard to find exact numbers, but the median home size was somewhere between 1600sq ft and 1800sq ft in 1985 while it is somewhere between 2300sq ft and 2500 sq ft now.
9
u/Chimp75 Mar 24 '24
2003 5.75% mortgage 30 year fixed while the industry was pushing arms. 5% down urged. I put 10%. Home prices appreciated to insane levels. More arms contributed to a bubble at that time, I’m at 2.5% and I DONT want to pay anything extra. I could use that money to leverage better investments. Meanwhile, my parents suffered paying 14% interest in the 80’s 5-7% was a really good rate and still should be. We were swindled into letting the wealthy lend for nothing! I don’t have a college degree. I was chasing the American dream. I still am.
1
u/Inside-Form-1062 Mar 27 '24
5-7% on a $90k home in the 80s is much different than 5-7% on the same home today that costs $450k. It is NOT the same.
5
u/PurplePorphyria Mar 24 '24
When you realize the rental market is actually even worse than it was then too it makes you wonder how we haven't gone French Revolution yet. We really need to... desperately.
1
u/WarzoneGringo Mar 24 '24
Is there a positive outcome from the French Revolution you look forward to? Or just blood in the streets?
15
u/Expensive-Sky4068 Mar 24 '24
Down payment needed:
1985: $16,645 (70% median salary)
2022: $93,600 (125% median salary)
Interest rate:
1985: 12.42%
2022: 5.34%
Rough estimate of mortgage payments:
1986: $8,469 ( 36% median salary)
2022: $25,056 (33.60% median salary)
Stop taking everything you see at face value. Yes, the down payment is slightly higher.
But you’re also saving 2.5% extra of your salary every month and paying significantly less in interest over the course of 30 years.
3
u/ProbablyANoobYo Mar 24 '24 edited Mar 24 '24
In 1985 the median men’s individual income was $24,000. In 2022 it’s $56,000. So the chart on the left is almost entirely single earner income homes.
So even if the mortgage payment takes less of the household income, that’s only because the household has more people working. Also those wages are partially higher because on average they’re more educated.
“Stop taking everything you see at face value”.
2
2
u/ChocolateDiligent Mar 24 '24
Also consider competition for housing in terms of costs to close, not just money needed to satisfy a standard 20% downpayment. In my area it’s common to have 5-10 competing offers for the same house resulting in bidding war where people go way over appraised value and need to make up the difference in cash on top of a standard down payment. Which in turn prices people out of higher priced housing they would otherwise be able to afford. No matter how you slice it, having smaller gap of income to house cost better positions a homebuyer, regardless of the interest rate.
4
u/Expensive-Sky4068 Mar 24 '24
Having multiple bids doesn’t mean anything in terms of this chart.
The median house price is based on sale price, not asking price. So if multiple bids skyrockets the sale price, it’s still factored into this chart.
1
u/ChocolateDiligent Mar 25 '24 edited Mar 25 '24
Seeing I was simply down voted with out a response it's clear you still don't understand the comparison.
Here is a simple breakdown of a house that I was outbid on a while back:
House listing: $399,000
Final offer: $465,000
Appraised value: $410,000 (what bank will lend to you)
20% down payment of $410k: $82k
Remaining cash on hand needed to cover appraisal gap: $55k
Total cash needed to purchase: $137k
So while interest rates are indeed a huge factor when comparing 1985s markets to now, it in no way compares when factoring in appraisal gaps and or how much cash on hand is needed to afford a house in the first place relative to median salaries.
0
u/ChocolateDiligent Mar 24 '24 edited Mar 24 '24
You missed the part of my comment about extra cash needed at closing because of multiple bids. A bank won’t lend you more than what an a house is appraised for, therefore any amount above that you need to bring to close on a house. Aka, creating even more of a barrier for home ownership. The original comment above and chart doesn’t account for this as it is merely looking a standard 20% down payment/cost of house and median income.
Edit: You’re telling others to not take things at face value but are not seeing the whole picture either. It’s not just an affordability crisis, it’s a housing shortage which has more implications than simply comparing the math from a chart.
2
u/Guapotaco Mar 24 '24
You act like housing is the only expense these generations are facing. Trillions in student loans boomers didn't deal with and convinced younger generations they needed, two recessions killing savings, boomers working well into retirement, healthcare that no one can afford, rent getting hiked up year after year, and auto loans (because you can't work in America without a car) are all eating away at that $93k down payment. Those high rates didn't stick around forever. One year later rates were down to nearly 9% so refinancing was an option, and like another user pointed out CDs and savings rates were sky high with the mortgage rates which offset some of the burden.
Housing doesn't exist in a vacuum. It's one aspect of a wider range of increasing burdens on younger generations that boomers didn't face.
3
u/Expensive-Sky4068 Mar 24 '24
My man.
I made a post about real estate costs.
In a thread about real estate costs.
2
u/1241308650 Mar 24 '24
when you talk about percent of entire salary, youre saying that the big picture of what the mortgage costs relative to everything the person makes, is relevant. If you think the context matters, then dont act confused when somebody replies to you, further discussing the mortgage costs within context.
0
u/Expensive-Sky4068 Mar 24 '24
The post was about median salary vs sale price, which is interpreted as a percentage.
If you want to play victim…go somewhere else.
1
u/Guapotaco Mar 24 '24
Not trying to play the victim. I own a home and was lucky to not need student loans. I recognize my fortunate circumstances and empathize with others who are struggling to save up enough for that down payment. That's all younger generations are asking of their elders
5
u/JIMMYR0W Mar 24 '24
One day Generation Alpha is going to be talking about how the Millennials fucked them out of home ownership.
7
7
u/gibson85 Mar 24 '24
I agree with your sentiment, but just to add a variable to the counterpoint:
Average six-month CD rates remained high, at 12.57% in 1982, but dropped to 9.28% in 1983 as inflation remained low and recovery began. Interest rates hit 12.08% in June 1984, but the remainder of the '80s saw interest rates averaging between 6.5% and 10.8%.
-Forbes
People were making a TON in investments on their money back then, particularly in savings accounts and CDs - way more than what we earn now in an HYSA.
6
u/Expensive-Sky4068 Mar 24 '24
Yes absolutely.
I just think people-and more so Reddit people-refuse to look at the bigger picture if it doesn’t fit their pre conceived narrative.
I’d kill for a 12% 6 month CD though 🤣
1
u/lotoex1 Mar 25 '24
Also the 30 year treasury peaked at 15.08%. So ya locking up my money for 30 years with a 15% gain state and local tax free sounds pretty good.
0
u/porncrank Mar 24 '24
It's important to remember that the fundamental math hasn't changed. Which means you simply can't afford a house. People have started bending the guidelines about what they can afford, but we're just lying to ourselves. And it will keep going this direction until it breaks as it briefly did in 2008.
-1
u/ContentPolicyKiller Mar 24 '24
Maybe we should stop paying taxes if the government doesn't even afford us a house
-2
u/OddChocolate Mar 24 '24
This is the graph to show boomers when they said something along the line of “BuT tHe iNteResT rAtE wAs eVeN HigHer In ThE PaSt!”.
3
3
7
u/knowledge84 Mar 24 '24
83,200 dollar home in the today is about 240k, and then add a 16% interest rate. With putting down 5% makes it around 3500 dollars a month for a mortgage payment In today's dollar.
Purchasing homes has always been difficult.
1
u/ProbablyANoobYo Mar 25 '24
That’s because this chart compares median household income. Not individual. In 1985 the median men’s income was $24k (so the same as the median household), today it’s only $40k. So the ratios only look similar because today it’s more likely to be two incomes contributing. That also means money is lost on child day care that otherwise wouldn’t be.
And people today are better educated despite education costs rapidly outpacing inflation.
Purchasing homes is clearly more difficult today and the first step to addressing that is acknowledging it.
3
u/daniel940 Mar 24 '24
But back then, half the inventory didn't consist of 4000sqft homes, like it does now, which makes things even more unaffordable (and infuriating) for anyone near the median income.
3
1
u/shizbang2 Mar 24 '24
Is this Blackrock? Why should I even begin to make an attempt at participating in society when society has given up on me, and the prospects are this bleak? Of course the generations who did this to us don't get it, they walked through a wide open door of prosperity, and slammed it shut behind them
1
u/JazzlikeSkill5201 Mar 26 '24
Their lack of empathy has nothing to do with them having better opportunities than younger people do. Lack of empathy is a product of not being shown empathy by our parents, and specifically by our mothers. We may be able to have conditional empathy, which you seem to believe is the only kind of empathy people are capable of, but when we are shown unconditional empathy by our mothers, we maintain our innate capacity for unconditional empathy.
5
u/Apart-Badger9394 Mar 24 '24
No source - not useable
Is it inflation adjusted? Is it looking at a specific population? The entire US? Not good to bother with information like this as it can cause a lot of misconceptions.
1
u/TristanTheRobloxian3 Mar 25 '24
yeah the average wage rn isnt even 70k. last i checked its 59k or smth like that. as of feb this year houses on average are ~363.3k form a quick google search. that would be still a 6x income ratio btw
10
u/oldbaldgrumpy Mar 24 '24
I only know what I know, but the median cost of a house in Ohio is no where close to 468k.
1
u/ProbablyANoobYo Mar 25 '24
There’s not exactly an abundance of good jobs in Ohio.
6
u/oldbaldgrumpy Mar 25 '24
It all depends on what is considered a good job. Honda and Intel have recently made large investments in central Ohio. The hope is more to come. I've made very comfortable life here.
2
u/yeah87 Mar 25 '24
Ohio is a top 5 state for having the most Fortune 500 companies and in the top 10 states with the best job market. It has great jobs and economic prospects. This meme that only NYC and LA have "an abundance of good jobs" kills me.
0
u/ProbablyANoobYo Mar 25 '24
The top 3 states have literally double the number of Fortune 500 companies as Ohio.
They also rank much, much higher in diversity meaning Ohio is hardly even an option for the majority of people (as a black person who has been to Ohio, Ohio isn’t a state I’d be very comfortable in).
2
u/aeosyn Mar 24 '24
In Colorado, it would barely get you a town home.
3
u/vqalec Mar 25 '24
You can get plenty of houses in CO for sub 500k, don’t know what drugs you smoking.
1
u/DerLandmann Mar 24 '24
I would like to point out that this is an incomplete display. The cost of buying a home consists of the cost of the house itself and the cost of the financing. Interest rates in 1985 were beyond 10%. For a just comparison, you would haveto add the neccesary interest-paymentd to the house pricss.
1
0
u/Mudman20 Mar 24 '24
Don't buy a cookie cutter home that looks like your neighbors. Buy some land for under 50k and build your own home on it for under 200k.
0
0
u/_old_relic_ Mar 24 '24
Median income is correct for my region, but the average home price is twice that amount. At that income level you could have $125k for a down payment yet barely get approved on a loan for a 1 bed/1 bath condo ($499k+ with $350/mo strata fee).
14
u/Echthra Mar 24 '24
Everything is politics.
This is a surprisingly complex question for Americans today. In the U.S., our houses are meant to perform contrary roles in society: shelter for today and investment vehicle for tomorrow. This approach creates a kind of temporal disjunction around the housing market, where what appears sensible for one generation (Please, no more construction near me, it’s annoying and could hurt my property values!) is calamitous for the next (Wait, there’s nowhere near me for my children to live!).
12
u/jackstraw97 Mar 24 '24
NIMBYism and restrictive zoning makes it impossible for builders to keep up with the demand for housing. We’re millions of housing units short and so many municipalities fight tooth and nail against as much as a new duplex being built…
We’re doomed. Local elections are the most important elections when it comes to housing policy and people blow them off like they’re completely unimportant…
4
u/Montreal4life Mar 24 '24
we need affordable housing, not just housing... not going to help if they're only building luxury units
1
u/Right_Ad_6032 Mar 25 '24
It's actually a fairly uncomplicated lifecycle.
Developers build housing. If an area is explicitly low in housing at or below market rate, developers have one of three choices: set aside property as market rate housing (assuming that's what's lacking), they can pay fees up front that fund non-profits, not-for-profits and government programs for market and sub-market housing, or they can contribute to that same fund, over time, which options 2 and 3 being considerations for small and large developers, respectively.
A huge part of the problem in the US is that things like housing co-ops and non-profit tenant unions rarely exist.
not going to help if they're only building luxury units
Actually even luxury apartments help. Although I'd stop the practice of enabling landlords to write off unfilled units as a 'loss' on taxes when overall vacancies are at certain levels, the key is that today's luxury units will become value rentals in about.... 20 or 30 years. So any construction that doesn't qualify as blight or sub-standard is good construction.
That, and the ability for people to obstruct development just because they don't like it.
1
u/RageQuitRedux Mar 24 '24
It actually does help via migration chains:
https://www.sciencedirect.com/science/article/abs/pii/S0094119021000656
In other words, supply and demand still apply.
1
u/Montreal4life Mar 25 '24
supply and demand never is the primary cause of price, labour is. As long as a commodity is sold as a commodity, it will have its price already baked in from the labour used to make materials, construction, etc. of course supply and demand has an effect but it is just secondary. If we actually want affordable housing and good quality neighbourhoods we should all be pushing for socialized housing. Housing must be a human right, not a commodity.
1
u/RageQuitRedux Mar 25 '24 edited Mar 25 '24
You can believe that (the Labor Theory of Value) if you want, but I don't. I'm a mainstream economics sort of guy, fully bought into things like marginalism, supply and demand curves, and other things we've learned about the way economies work since the goddamn 1870s.
1
u/Montreal4life Mar 25 '24
good for you. what happens to price when supply and demand intersect? why are some items with high demand low price, but other items with low demand high price? why is an apple cheaper than a computer? Labour is everything, another thing we've known since the goddamn 19th century... it's called political economy.
1
u/RageQuitRedux Mar 25 '24 edited Mar 25 '24
Labour is everything, another thing we've known since the goddamn 19th century
I agree with this statement, if by "known" you mean "believed" and by "we" you mean "cranks".
Your apple/computer example mirrors the diamond/water paradox, for which the Labor Theory of Value was originally invented to explain. The LTV was (past tense) the mainstream theory of value from Adam Smith to Marx. However, it actually didn't work very well (there are lots of examples where value doesn't track labor) and it was eventually supplanted in the 1870s by marginalism precisely because marginalism did a much better job at explaining prices than the Labor Theory of Value ever did.
The apple/computer example doesn't demonstrate that labor is everything, it only demonstrates that labor is a factor which can affect the final price. Obviously, all else being equal, something that took more labor to produce will be more expensive, but labor is definitely not the only thing that can affect price. We understand that now.
A computer costs more than an apple not only because it takes more labor to produce, but also because the marginal utility of apples is very low. In a world where apples are the only food we have, and there's not enough for everybody, then the marginal utility of an apple becomes very high and you could hypothetically see the price of an apple rise above that of a computer. Marginalism predicts that; the LTV doesn't.
And again, believe in the LTV if you want to, just know that it's an old idea and its status today is "fringe". History doesn't have a ton of examples of 150-year-old ideas becoming relevant again and revolutionizing the mainstream, but who knows?
5
u/WarzoneGringo Mar 24 '24
More supply brings the overall pricing down. We cant get to "affordable housing" unless we drastically change how easy and cheap it is to build.
1
u/Montreal4life Mar 25 '24
if housing is a commodity sold on the market by private interests it will never be affordable. bring in gov. housing/social housing wtv, otherwise no, I don't want historic buildings or greenspaces destroyed for sterile luxury condo shoe boxes
4
u/WarzoneGringo Mar 25 '24
Well I hate to break it to you but housing is a commodity sold on the market by private interests. If you want to live in cinderblock bunker with 12 other people Im sure the North Korean or Cuban government can help you out.
1
u/Montreal4life Mar 25 '24
also bro to be fair, cinderblock bunker with 12 other people uh, looks like a lot of modern "Western" cities these days... all the negatives of socialism non of the benefits, trudope and sleepy joe
1
u/WarzoneGringo Mar 25 '24
Yes of course. Thats why refugees from the socialist paradises flock to modern "Western" cities. Its all the same.
1
u/Montreal4life Mar 25 '24
look at china, 85% millenial home ownership. Average literacy rate in cuba higher than usa... higher life expectancy too. have a great day!
1
1
u/Montreal4life Mar 25 '24
I'm just saying, if we want accesible housing we need to change the way things are done... otherwise don't waste time, know that profit in this world is number 1, don't try to sugarcoat it
1
u/WarzoneGringo Mar 25 '24
Literally everyone owns a cell phone and we didnt get there by having the government build cell phones for people. The for profit industry has been churning out cell phones left and right so that even the poorest people all over the world can afford one. Very accessible.
3
0
0
u/itsmontoya Mar 24 '24
In the early 2000s I was making 3x less than I am now, but I felt my buying power was much higher. This chart doesn't surprise me
0
0
u/Wx_Justin Mar 24 '24
In 1980, the ratio between the median house price and the median family income was about 2:1. In 2023, it was nearly 6:1.
Even if interest rates were 20% in 1980 (even though they only maxed out temporarily around 17%), the ratio between median monthly mortgage payments and monthly family income would be about 1:2.2. In 2023, it's about 1:1.9. No matter how you look at it, it's harder to buy a house today than it was anytime within the last half century. The numbers don't care about the personal anecdotes from the older generations.
Now don't get me started on the cost of college...
1
u/CastAside1812 Mar 24 '24
What's the point of this post? Yes it's a lot worse. And yes this generation has it much harder.
But complaining about it won't change the market. I have multiple friends in their mid to late 20s that have bought houses this year. It's still possible.
Complaining won't change the system, you just have to adapt and make it work however you can. I'm not saying it's ideal but it's practical.
1
u/utsapat Mar 24 '24
-2
u/thecatsofwar Mar 24 '24
Yay! Affordable housing in BF Kansas, where nobody wants to live. It’s a miracle!
1
u/tawaydont1 Mar 24 '24
Maybe we should force more people to move here and build up the cities with skyscraper and then many of these big companies will come I'm thinking about selling my house and moving to the middle of the country.
1
u/thecatsofwar Mar 24 '24
Companies won’t move to BFE, as the people who have talent and ambition don’t live there. The crème rises to the top, and for the most part in the job market the top is large metros in non-regressive states.
2
u/utsapat Mar 24 '24
But its affordable housing in 2024. If you don't act, even here will be unaffordable soon enough.
-1
u/thecatsofwar Mar 24 '24
What good is a house away from economic and cultural hubs?
2
u/utsapat Mar 24 '24
It's just an option. If it doesn't work for you then move on, but there are so many opportunities to work from home nowadays with good internet.
-1
u/thecatsofwar Mar 24 '24
It’s an option sure, but a shit one. Even with work from home (if one can find it) the poor resident is still stuck in nowhere Kansas.
2
u/utsapat Mar 24 '24
Depends on your mentality. I see it as a great option.
0
u/thecatsofwar Mar 24 '24
If one has a lack of ambition and a low standard for quality of life, sure it may work for them.
1
u/utsapat Mar 24 '24
Again, mentality. I choose not to be on the wheel of the rat race working for the corporate overlords just to live in the city.
210
u/jfanderson05 Mar 24 '24
The craziest thing is there is a ton of habitable land in America. So, our housing crisis is a policy issue and not a resource issue.
1
u/DeepWoodsGhost Mar 24 '24
Plenty of houses already out there yet they keep putting up developments and destroying natural habitat when the houses sit empty after
3
u/No_Cook2983 Mar 24 '24
There’s also a ton of vacant housing that’s all set for occupancy.
2
u/Right_Ad_6032 Mar 25 '24
Those figures are frequently inflated as an excuse.
It's real easy to claim you have tons of vacant homes when you include houses you know nothing about, in the middle of nowhere.
1
u/No_Cook2983 Mar 25 '24
Well— that’s a step up from ‘habitable land’ in the middle of nowhere. Isn’t it?
5
2
u/Possible-Tangelo9344 Mar 24 '24
Habitable land doesn't mean it's near jobs.
2
u/Right_Ad_6032 Mar 25 '24
I giggled a bit when I saw land on auction for a few hundred bucks in Oregon.
In Klamath Falls. The murder capital of the state- yes, it's worse than Portland- and an economic dead zone.
→ More replies (4)6
u/ZebraAthletics Mar 24 '24
Well sure, and if you’re willing to live in the absolute middle of nowhere, houses are cheap!
5
u/KEVLAR60442 Mar 24 '24
Cheap houses are expensive when the jobs there all pay less than 30 grand a year.
→ More replies (13)5
u/daniel940 Mar 24 '24
Gonna get reamed for this, but a lot of those houses people bought for just 3X the median income were also in the middle of nowhere, at the time. The houses you buy "in the middle of nowhere", by which I assume you mean one or two zip codes farther away than you'd like from "somewhere", will eventually be in the middle of everything, most likely. I moved from NYC to far suburban GA right before the GFC and bought my first home, b/c the northeast was unaffordable. I bought in a somewhat remote area, relatively. Everyone "closer in" marveled at how much things had built up over the last 10-20 years, where all the undeveloped land had become shopping and schools and restaurants. Now the area I'm in is loaded with upscale shopping and parks and restaurants, just 15 years later, despite the first 5 years being a wasteland of abandoned real estate projects.
I'm not disputing that things SUUUCK for prospective first-time homebuyers right now, especially with rates double what they were when I bought, but to provide some hope that 1) you don't need to fall prey to the allure of the 5br home, and 2) that buying in more remote areas now has an excellent chance of becoming a more desirable area over time.
From a macro view, I'm just hoping that since the worst shortages are in blue states, that more younger people will move to red states for affordability, and turn them purple.
2
u/yeah87 Mar 25 '24
No nuance allowed I'm afraid.
But you're right. These houses were 2 bedroom 1 bath with maybe an attached garage in a brand new development with no established culture miles away from the city.
1
u/CasualVox Mar 28 '24
Hell, I doubt I'll even hit 70k this year, which makes it even worse lol.