4 ms·

This is partly because the definition of comfortable has increased faster than the average salary.

by blowski 10y ago

falcolas 10y ago
In the 70's, middle-class "comfortable" consisted of a 16-30,000 sqft house with a yard, two cars, and remarkably good job stability (pensions, etc). Today, it takes nearly 2x the median household income to get something resembling that kind of life. Granted, you're still considered middle class at that level of income...
- IncRnd 10y ago
  Are you sure that you meant 16-30,000 sqft house in the 70's was middle-class "comfortable"?
- runako 10y ago
  > Today, it takes nearly 2x the median household income to get something resembling that kind of life. In some cities. In other cities, that's just not true. Example: in Atlanta, GA, the median income is right over $55k. According to Zillow, that will get you a house in the $227k range. There are tons of single-family houses with yards in that price range (or even half that) in the city. I ran similar math for Dallas, TX. I'd bet there are a lot of markets where this is true. Housing is only expensive in the expensive housing markets.
  - Kurimo 10y ago
    If you buy a house in the $227k range on a $55k income (With NO insurance and NO property taxes, the monthly payment would be ~$1,736.53), you will have to live very carefully to get by comfortably (considering $55k after federal/georgia taxes would net about $41,013.75, your monthly takehome would be $3,7k leaving you <$2k after mortgage, ignoring again insurance, property taxes, and other bills). Zillow and other home pushers are interested in selling houses, not in the consequences for the buyers thereafter.
    - runako 10y ago
      I kind of figured that would be a pushback, but I wanted to use a reproducible source (nerdwallet is more aggressive than Zillow and comes up with a higher number). And per realtor.com ~$1800/mo is about right for all-in (insurance, tax, etc.) in the Atlanta area in that price range. All that said, in Atlanta, 3 BR/2 BA houses are abundant in the under-$150k range. Or under $100k. It's really not approaching necessary to earn 2x the median income in cities like Atlanta to buy a house with a yard. The point is the OP's math assumes one lives in a high-cost area, which is not the reality where most Americans live.
      - falcolas 10y ago
        Not really, once you include the other costs of living (and having children). $1.8k housing, plus $500 for property taxes and insurance, $1,000 for two vehicles (payments, insurance (damned teenage drivers), gas, maintenance), $500 into savings for household emergencies, $800 to feed four, $100 per person for clothing, the occasional ice cream, paying off medical deductables... and you're quickly looking at needing over $5,000 a month gross just to get by. 5,000 / 0.7 * 12 = $85,000 Toss in 10% savings and 10% retirement, and you're well over $100,000. Sure, you can cut corners and live off a lot less than that, but I'm comparing it to the standard of living had by people 40 years ago.
        runako 10y ago
        Right -- the $1,800 was inclusive of property taxes and insurance ("all-in"). And again -- there are great houses available for under half that ($900/mo all-in). (Random nitpick: if you're earning the median income, paying a mortgage while contributing to retirement; and have 2 kids, you are not paying anything close to 30% of your income in income taxes.) Also you are right that if you save ~30% of your median income ($500 + 10% savings + 10% retirement), the month-to-month gets a little tighter. But then you can retire early. :-) I'm not arguing that everything is roses, just that tens of millions of people live at the median income and own houses, cars, etc. You'd have done much better here arguing about the costs of childcare or higher education. Those are a bloodbath, no matter where you are.
- dragonwriter 10y ago
  > In the 70's, middle-class "comfortable" consisted of a 16-30,000 sqft house with a yard, two cars, and remarkably good job stability (pensions, etc). I think you are off of what you intended by an order of magnitude on that house size. (And a bit high for reality even after correcting for that error.) Tangentially related: https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf
  - falcolas 10y ago
    Yeah, one order of magnitude. I hate doing that. I don't think it's too high, though. My parents built something on the order of 5,000 sqft in the early 70's for around $15,000 (including the 5 acres of land), adjusted for inflation that's under $150,000. My Mom was able to put herself through 4 years of college by waiting tables part time. Yeah, we had it good. Why? My dad's blue collar job burying and splicing telephone lines for Ma'Bell. It really was a different time. That same job today comes with no job security and remarkably similar wages as it was 40 years ago, even as the cost of living and inflation has increased tenfold.
1_2__3 10y ago
I'm sure you feel very smug saying that but most people reading your comment are likely aware of this argument and don't agree with it. So you'd need to provide some evidence, rather than just a naked claim that we've all heard before.

This is partly because the definition of comfortable has increased faster than the average salary.

by blowski 10y ago

This is partly because the definition of comfortable has increased faster than the average salary.

In the 70's, middle-class "comfortable" consisted of a 16-30,000 sqft house with a yard, two cars, and remarkably good job stability (pensions, etc). Today, it takes nearly 2x the median household income to get something resembling that kind of life. Granted, you're still considered middle class at that level of income...

IncRnd 10y ago
Are you sure that you meant 16-30,000 sqft house in the 70's was middle-class "comfortable"?
runako 10y ago
> Today, it takes nearly 2x the median household income to get something resembling that kind of life. In some cities. In other cities, that's just not true. Example: in Atlanta, GA, the median income is right over $55k. According to Zillow, that will get you a house in the $227k range. There are tons of single-family houses with yards in that price range (or even half that) in the city. I ran similar math for Dallas, TX. I'd bet there are a lot of markets where this is true. Housing is only expensive in the expensive housing markets.
- Kurimo 10y ago
  If you buy a house in the $227k range on a $55k income (With NO insurance and NO property taxes, the monthly payment would be ~$1,736.53), you will have to live very carefully to get by comfortably (considering $55k after federal/georgia taxes would net about $41,013.75, your monthly takehome would be $3,7k leaving you <$2k after mortgage, ignoring again insurance, property taxes, and other bills). Zillow and other home pushers are interested in selling houses, not in the consequences for the buyers thereafter.
  - runako 10y ago
    I kind of figured that would be a pushback, but I wanted to use a reproducible source (nerdwallet is more aggressive than Zillow and comes up with a higher number). And per realtor.com ~$1800/mo is about right for all-in (insurance, tax, etc.) in the Atlanta area in that price range. All that said, in Atlanta, 3 BR/2 BA houses are abundant in the under-$150k range. Or under $100k. It's really not approaching necessary to earn 2x the median income in cities like Atlanta to buy a house with a yard. The point is the OP's math assumes one lives in a high-cost area, which is not the reality where most Americans live.
    - falcolas 10y ago
      Not really, once you include the other costs of living (and having children). $1.8k housing, plus $500 for property taxes and insurance, $1,000 for two vehicles (payments, insurance (damned teenage drivers), gas, maintenance), $500 into savings for household emergencies, $800 to feed four, $100 per person for clothing, the occasional ice cream, paying off medical deductables... and you're quickly looking at needing over $5,000 a month gross just to get by. 5,000 / 0.7 * 12 = $85,000 Toss in 10% savings and 10% retirement, and you're well over $100,000. Sure, you can cut corners and live off a lot less than that, but I'm comparing it to the standard of living had by people 40 years ago.
      - runako 10y ago
        Right -- the $1,800 was inclusive of property taxes and insurance ("all-in"). And again -- there are great houses available for under half that ($900/mo all-in). (Random nitpick: if you're earning the median income, paying a mortgage while contributing to retirement; and have 2 kids, you are not paying anything close to 30% of your income in income taxes.) Also you are right that if you save ~30% of your median income ($500 + 10% savings + 10% retirement), the month-to-month gets a little tighter. But then you can retire early. :-) I'm not arguing that everything is roses, just that tens of millions of people live at the median income and own houses, cars, etc. You'd have done much better here arguing about the costs of childcare or higher education. Those are a bloodbath, no matter where you are.
dragonwriter 10y ago
> In the 70's, middle-class "comfortable" consisted of a 16-30,000 sqft house with a yard, two cars, and remarkably good job stability (pensions, etc). I think you are off of what you intended by an order of magnitude on that house size. (And a bit high for reality even after correcting for that error.) Tangentially related: https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf https://www.census.gov/const/C25Ann/sftotalmedavgsqft.pdf
- falcolas 10y ago
  Yeah, one order of magnitude. I hate doing that. I don't think it's too high, though. My parents built something on the order of 5,000 sqft in the early 70's for around $15,000 (including the 5 acres of land), adjusted for inflation that's under $150,000. My Mom was able to put herself through 4 years of college by waiting tables part time. Yeah, we had it good. Why? My dad's blue collar job burying and splicing telephone lines for Ma'Bell. It really was a different time. That same job today comes with no job security and remarkably similar wages as it was 40 years ago, even as the cost of living and inflation has increased tenfold.

1_2__3 10y ago

I'm sure you feel very smug saying that but most people reading your comment are likely aware of this argument and don't agree with it. So you'd need to provide some evidence, rather than just a naked claim that we've all heard before.