It's true that housing is getting ridiculously expensive. But there is a side that's often not really told, or really explained well, which is interest rates dr

It's true that housing is getting ridiculously expensive. But there is a side that's often not really told, or really explained well, which is interest rates dropping consistently and hard. Take a look at the mortgage rates: https://www.thetruthaboutmortgage.com/wp-content/uploads/2013/09/historicmortgagerates.png https://www.thetruthaboutmortgage.com/wp-content/uploads/201... (ignore the weird domain, there's plenty of similar sources). Fact is that rates used to be as high as 18%. Recently they've gone as low as 3.5%. Real estate is hugely debt-driven, and the standard mortgage contract is set for 30 years. Thereby 'housing costs' isn't really reflected in just the price of a home, as say, the price when you buy a banana, which you buy instantly with cash. Instead, housing costs are dominated by the financing costs, which you pay for over the course of 30 years. Those housing costs have price as a major factor, sure, but it's multiplied by interest rates. You can't leave that out of the historical context. And if you do, housing costs have in fact not increased quite as sharply as people think. To illustrate, a $100k home with 3.5% vs 18% rates over 30 years, will cost $160k vs $540k. In fact, a $333k home at 3.5% rates, will require total payments equal to a $100k home at 18% rates, both around $540k. In short, prices could have tripled since the height of the mortgage rates until the bottom, and yet, you'd have made exactly the same total and monthly average payments. We often get shown price to income graphs getting worse and worse. But that doesn't capture the reality: monthly payments aren't getting nearly as bad, as interest rates have dropped hard. Higher prices are easier to pay off. That's not to say that housing isn't getting more expensive, it is. But if you correct for inflation (i.e., average income growth) and correct for much lower financing rates (lowering monthly payments), it's not nearly as bad as is often presented. An easier way to look at this is the percentage of money we spend of our income on housing. You can see it's on the rise, but really, it's not as extreme as some would think. None of the doubling-tripling kind of figures about housing you see in the media. https://www.pewtrusts.org/-/media/data-visualizations/infographics/2016/fig_4_expen.png?la=es&hash=76D1F6590CC411A8D936D9C2EABEE2F92B3549A0 https://www.pewtrusts.org/-/media/data-visualizations/infogr... Then lastly, we're just looking at how much we spend, not at how much we get in return. Suppose phones got more expensive, nobody would bat an eye, the phone today is 10x the phone of 20 years ago. What about housing? Here too the data is a bit tricky to get, I'd love to see more research on this. But there are some figures about average home size: e.g.: https://thefioneers.com/wp-content/uploads/2019/03/Average-Home-Size.png https://thefioneers.com/wp-content/uploads/2019/03/Average-H... The average home size grew from 1500 to 2500 square feet, while the average household size decreased. In short, in part 'housing' is not getting more expensive itself, but rather we're purchasing more of it, thus spending more on it. If you correct housing costs (i.e., bring it back to a $ per unit of house size), the growth is also much lower. If you take all this together, then housing is still getting more expensive, but most places are not all that much worse than many years ago. That's not to say we should ignore this as a policy issue, I think it demands lots of attention. But I do think the media narrative and vox populi currently is blind to the other side of the story and only has one message: extreme prices, unseen crisis, lost generation, no hope, etc.