6 ms·

It's housing. Fix housing, and people will be happier. Seriously, I lurk a lot of places, and everyone is up in arms about cost of living at the moment. Read

It's housing. Fix housing, and people will be happier. Seriously, I lurk a lot of places, and everyone is up in arms about cost of living at the moment. Reading most Reddit threads that mention housing will have 5k+ comments, all saying the same thing. People are at their breaking point.

ChrisLomont 5y ago
The data don't support the claim "it's housing." The change happened exactly and spectacularly at COVID; housing complaints significantly predate this.
- adam_arthur 5y ago
  While true that the first leg down was when covid hit, there's a noticeable second leg down in the summer of 2021. This also happens to be when inflation/price increases started to accelerate. It could also be due to govt aid programs expiring, leading to less disposable income.
- DeRock 5y ago
  Housing prices accelerated greatly since the start of COVID: https://fred.stlouisfed.org/series/csushpinsa https://fred.stlouisfed.org/series/csushpinsa
  - ChrisLomont 5y ago
    Yes, there was a massive building material shortage and labor shortage, both driving costs up. The complaints about housing prices predates this by well over a decade.
ggm 5y ago
This. I think Maslow is often over-stated, but fear of unstable housing and exposure to random costs is HUGE in personal wellbeing. The people who can fix it have voter skin in the game and a lot of fear around the outcome: A cohort of investors have been lied to about the perpetual money making machine of house ownership, at the cost of home ownership for ordinary (young) people.
- throwaway6734 5y ago
  >A cohort of investors have been lied to about the perpetual money making machine of house ownership It's not investors that's the issue, it's your average older american whose home represents a significant amount of their wealth
  - ggm 5y ago
    I don't entirely agree. I do agree the average older americans home is part of the problem, but the current price is a reflection of homes being sold: the average older boomer whose wealth is embedded in their home isn't selling. Its notional wealth, not actually liquid invested wealth. It's also an accident: few of them acquired the home to be their main source of future wealth, but current home buying is fuelled by speculative investment: belief its an appreciating asset irrespective of the rental income.
    - throwaway6734 5y ago
      >the average older boomer whose wealth is embedded in their home isn't selling. But they are pushing back against policy to build more housing
    - keewee7 5y ago
      >the average older boomer whose wealth is embedded in their home isn't selling. Its notional wealth, not actually liquid invested wealth I'm not American but in my country a lot of boomers have been able to retire early, travel and buy expensive cars by taking out very favorable loans by using their home value increase as collateral. Let's say they bought their home at 1 million Danish krones and the house is now worth 4 million. They can use the valuation increase to pay out any remaining debt in the house and put up collateral for loans to retire early, travel and buy expensive cars. I'm 99% sure the same is possible in the US.
      - ggm 5y ago
        They're spending the kids inheritance. Intergenerational wealth issues around this. Most pension and superannuation systems were designed to drain to zero near death. Now, people traded them up to be income streams, are living longer and will vest middle aged kids with a lump sum inheritance. It's not "wrong" in law but it's not what was intended by pensions
poulsbohemian 5y ago
May I ask what your recommendations would be for this? What's broken and how would you fix it?
- throwaway6734 5y ago
  Build more housing
  - poulsbohemian 5y ago
    So how do you manage zoning issues, including water and energy management? As we saw a good example of in Pittsburgh, how do we maintain the transportation and muni services to these new houses? (My real point in asking these questions is that housing issues in say, the Bay Area, are different from those in other parts of the country such that it's really hard to make blanket statements about housing. There are some themes, but I posit there are different answers for different locales.)
    - resonantjacket5 5y ago
      > So how do you manage zoning issues, including water and energy management? Single family housing uses more water and energy per capita, generally one will be fine. And overtime one can slowly upgrade infrastructure -- as is done around the world or what happens in American neighborhoods that are upzoned. It really is a red herring of a problem that is brought up. > As we saw a good example of in Pittsburgh, how do we maintain the transportation and muni services to these new houses? As long as one is building the new housing nearby jobs you'll be decreasing the average miles traveled. Also it is usually the other way around you need a minimum level of density to make transit more viable and useful.
    - throwaway6734 5y ago
      >including water and energy management Expand service? >how do we maintain the transportation and muni services to these new houses? Use the tax money they pay to pay for infrastructure maintenance. >are different from those in other parts of the country such that it's really hard to make blanket statements about housing But the general issues is the same isn't it: there's more demand than available supply or else prices wouldn't be going up
adam_arthur 5y ago
If only the Fed had cared at all that home prices were appreciating twice as fast as they ever did during the housing bubble. And tapped the breaks, rather than opening the floodgates to speculative frenzies across the board. They were a big reason for the 90s tech bubble and 2000s housing bubble too due to excessive rate cuts. Pretty clear they should have considered velocity of the economy and not simply point in time employment and inflation values (which are lagging indicators) Oh well...
- rufus_foreman 5y ago
  Are you sure you're thinking this through? The Fed is actually about to hit the brakes, people are expecting 7 rate increases this year and more next year. The current 30 year mortgage rate is around 3.5%, the median sale price for a house in the bay area is $1.5 million. With 20% down that's $3500 a month for principal and interest. If the Fed follows through and raises rates say 2%, it turns into $5500 a month. Doesn't do much for affordability. And if you're thinking prices will fall when rates rise, that's not what has happened in the past. Over the last 50 years, every time there has been an environment with rising interest rates, housing prices have gone up, not down: https://awealthofcommonsense.com/2022/01/will-higher-mortgage-rates-derail-the-housing-market/ https://awealthofcommonsense.com/2022/01/will-higher-mortgag.... So you will be paying a much higher rate on a more expensive house.
  - adam_arthur 5y ago
    Yes, the damage is done at this point. The speculative frenzy is what drove the price increases, and it should've been short circuited early last year. Prices will be stickier than rising rates increases affordability. But at this point it has to be done. Increasing buying power makes inflationary pressures worse, not better. Higher rates will kill the psychology/speculative aspect of rapid price increases. And the Fed is acting far too late. The yield curve is about to invert as investors think that Fed hikes will lead to a recession. They have to do many of them and fast to get inflation under control, which will very likely lead to a bust. Every time in US history that inflation has been over 5%, a recession followed when the Fed took necessary measures to bring it down. It could've been a smooth landing if they had started long ago and done them in slow increments with moderation. Yet they kept emergency level money printing and rates in place for two full years, far after the acute crisis had passed. A recession would basically undo a lot of the quick recovery/good that the fiscal spending brought about. But seems too late to avoid if the Fed is serious about inflation and doesn't let it run unchecked like the 70s. Though it's pretty apparent to me that prices will come down considerably if mortgage rates were to rise 2% in a short period of time. Which may just happen in the end... We'll see. Only ~10% of homeowners have moved at these prices levels, so there are many with much higher equity levels that would be willing to sell for less in a slow market.
zwkrt 5y ago
Since the beginning of covid i I have been living with 2 friends in a shared house. The house is 1600 square feet, 105 years old, only has one bathroom. And you know what? We get along great, with a yard, space to play music, and shared cooking responsibilities (its just as easy to cook for 3 as it is to cook fr yourself!) For the same rent I pay I could live in a tiny studio apartment with a non functional kitchen and a view into someone else’s non-functional studio, and I would go totally insane. But the tiny studio is all that is a large part if the new housing stock in my city (seattle) right now, with no sign of stopping. My take is that our collective focus on individualism has somehow tricked people into thinking that living alone is an important component of success, and people seem to want it at the expense of having a functional life and functional community. I understand we can’t all live in (multi family) single family housing arrangements, but it saddens me to see that new construction doesn't make space for more shared living. It is cheaper, more efficient, better for mental health, arguably better for children, and wildly unpopular.
- zepto 5y ago
  Or it could be that you are just lucky to have friends who are easy to live with.
  - hollerith 5y ago
    Or it could be that he is just lucky that he is easy to live with.
    - zepto 5y ago
      It wouldn’t be great for him if he was easy to live with but his roommates were not.
      - hollerith 5y ago
        Sure, but then he can expect most of his roommates to be easy to live with, as long as he is willing and able to shop around and to change roommates when needed, even if his current roommates are not.
manuelabeledo 5y ago
And healthcare. And education. And I'm convinced that if these basic necessities were fulfilled, the US would see a dramatic reduction in crime and violence.
chasd00 5y ago
If no one can afford housing then why is it priced so high? Apparently there are buyers right? Otherwise, prices would be lower.
- crooked-v 5y ago
  The moderately wealthy (probably overrepresented on HN) can afford housing. Everybody else gets to choose between either fighting over whatever's left over or moving somewhere that's cheap but not actually where they want to live.
- symlinkk 5y ago
  A lot of houses are sold to be rented out. I personally know someone who bought a house a year ago, saw it appreciate $150k, and is now using that as a down payment on an investment property. It’s sickening.
- Jtsummers 5y ago
  Zillow and others helped to inflate the prices. Around here (Colorado) they were buying up houses at $30k-50k over asking and often within 1-3 days of listing, which meant people weren't willing to sell for the reasonable prices. And once Zillow or companies like them owned the houses, they weren't (until forced) willing to sell for a loss.
  - ChrisLomont 5y ago
    So Zillow selling for a loss means houses sell at the prices you wanted, right?
    - Jtsummers 5y ago
      If someone as stupid as Zillow demonstrated themselves to be was willing to spend $50k over asking, they can sell at $25k below their own purchase price and it's a loss. The price still remains higher than it ever should have been.
      - 5y ago
belter 5y ago
Housing is a huge problem in other countries also. Low interest rates being the main cause for it. Large pension funds and other investors gobble up properties looking for yield they can't get in other investments. "Why is there a housing shortage in the Netherlands?" https://dutchreview.com/expat/housing/why-is-there-a-housing-shortage-in-the-netherlands-the-dutch-housing-crisis-explained/ https://dutchreview.com/expat/housing/why-is-there-a-housing... "Germany's next government aims to tackle housing crisis" https://www.dw.com/en/germanys-next-government-aims-to-tackle-housing-crisis/a-59950132 https://www.dw.com/en/germanys-next-government-aims-to-tackl... "The History of the UK's Housing Crisis" https://www.vice.com/en/article/k78mm3/the-history-of-the-uks-housing-crisis https://www.vice.com/en/article/k78mm3/the-history-of-the-uk...
- LimaBearz 5y ago
  I wish we could all just agree that some things just aren't meant to be for investors and that not all things are meant to have a laissez faire capitalist approach.. I've been looking at properties in LCOL & remote areas of the US and prices shot straight up in 2020/2021 to the point where even having high salary fo an HCOL they become unaffordable. Those places haven't seen wild growths in population and the people are purely speculating as a result of the artificial inflation caused by Zillow and friends. Looking yesterday those properties are on the market still, some for 6+ months now with little to no drop in price... the sellers are delusional
  - svachalek 5y ago
    I think the main problem with housing is that it's not laissez faire at least from the production side. With homeowners everywhere fighting tooth and nail against any uptick in housing supply, it's not surprising there's a shortage. Which only serves to make it even more attractive to investors, it's like bitcoin without all the complicated tech.
    - LimaBearz 5y ago
      Absolutely, but there is some laissez faire'ness on the producers side as well. A few of the publicly traded builders in earning calls by their own admittance have touted restricting supply of already built inventory purely to protect their high profit margin. We definitely need to build more, though the producer "market" is failing a bit also
closeparen 5y ago
Housing becoming affordable would be be great for young people, but the older people who own the houses would be pretty upset about the destruction of their life savings and their newly-underwater mortgages. I’m not sure it really increases aggregate happiness.
rufus_foreman 5y ago
Housing is relatively affordable now compared to the past. Yes, house prices are high, but interest rates are low and household incomes are high. There is a post about it at Calculated Risk at https://calculatedrisk.substack.com/p/real-house-prices-price-to-rent-ratio-ade https://calculatedrisk.substack.com/p/real-house-prices-pric... that has an affordability index. The only time housing has been more affordable was after the financial crisis. If housing affordability affected happiness, unhappiness should have been off the charts in the early 1980's. But it wasn't, according to the linked article. People were as happy as ever while taking out mortgages at 18% interest.
- xg15 5y ago
  > and household incomes are high I've got no data, but I wonder if rising inequality might be warping the statistics here. At least, if incomes were really high across all population segments affected by the housing crisis, we shouldn't see so much talk about unaffordable cost of living, student debt, healthcare costs, etc. Something doesn't add up here. Household incomes might be extremely high for certain groups (e.g. tech workers) while too low to afford decent housing in other groups. > If housing affordability affected happiness, unhappiness should have been off the charts in the early 1980's. But it wasn't, according to the linked article. People were as happy as ever while taking out mortgages at 18% interest This might as well indicate that this way to calculate housing availability is wrong, not that housing availability doesn't affect happiness.
- gremlinsinc 5y ago
  Average income is 68k, average home price is 408k... According to a google search on how much can a person afford for a home at 60k... you get this: > The usual rule of thumb is that you can afford a mortgage two to 2.5 times your annual income. That's a $120,000 to $150,000 mortgage at $60,000. Can you please tell me how one gets homes at these rates? Because I don't see any available, not here in Utah which isn't even a huge COL state... or anywhere else.. Edit..so to afford the AVERAGE home in America you'd need at least 163k per year annual salary.
  - rufus_foreman 5y ago
Wesxdz 5y ago
I spent 6 months helping to prototype and build the Seed Eco Home at Open Source Ecology ('a modular incremental 1000sqft home that two people can build in a week for $50,000') to help solve housing. https://wiki.opensourceecology.org/wiki/Seed_Eco-Home https://wiki.opensourceecology.org/wiki/Seed_Eco-Home Unfortunately, the apprenticeship program was underfunded due to the lack of participation caused by COVID, and maybe more broadly, despite what people say, they are not actually interested in collaborating to reduce human suffering/advance humanity by solving problems like housing when there are personal sacrifices/opportunity costs involved. Look at something like https://en.wikipedia.org/wiki/Depopulation_of_the_Great_Plains https://en.wikipedia.org/wiki/Depopulation_of_the_Great_Plai... and it's pretty clear that the problem with housing is mainly social inequality rather than any underlying technical bottleneck...

ChrisLomont 5y ago

The data don't support the claim "it's housing." The change happened exactly and spectacularly at COVID; housing complaints significantly predate this.

adam_arthur 5y ago
While true that the first leg down was when covid hit, there's a noticeable second leg down in the summer of 2021. This also happens to be when inflation/price increases started to accelerate. It could also be due to govt aid programs expiring, leading to less disposable income.
DeRock 5y ago
Housing prices accelerated greatly since the start of COVID: https://fred.stlouisfed.org/series/csushpinsa https://fred.stlouisfed.org/series/csushpinsa
- ChrisLomont 5y ago
  Yes, there was a massive building material shortage and labor shortage, both driving costs up. The complaints about housing prices predates this by well over a decade.

ggm 5y ago

This. I think Maslow is often over-stated, but fear of unstable housing and exposure to random costs is HUGE in personal wellbeing. The people who can fix it have voter skin in the game and a lot of fear around the outcome: A cohort of investors have been lied to about the perpetual money making machine of house ownership, at the cost of home ownership for ordinary (young) people.

throwaway6734 5y ago
>A cohort of investors have been lied to about the perpetual money making machine of house ownership It's not investors that's the issue, it's your average older american whose home represents a significant amount of their wealth
- ggm 5y ago
  I don't entirely agree. I do agree the average older americans home is part of the problem, but the current price is a reflection of homes being sold: the average older boomer whose wealth is embedded in their home isn't selling. Its notional wealth, not actually liquid invested wealth. It's also an accident: few of them acquired the home to be their main source of future wealth, but current home buying is fuelled by speculative investment: belief its an appreciating asset irrespective of the rental income.
  - throwaway6734 5y ago
    >the average older boomer whose wealth is embedded in their home isn't selling. But they are pushing back against policy to build more housing
  - keewee7 5y ago
    >the average older boomer whose wealth is embedded in their home isn't selling. Its notional wealth, not actually liquid invested wealth I'm not American but in my country a lot of boomers have been able to retire early, travel and buy expensive cars by taking out very favorable loans by using their home value increase as collateral. Let's say they bought their home at 1 million Danish krones and the house is now worth 4 million. They can use the valuation increase to pay out any remaining debt in the house and put up collateral for loans to retire early, travel and buy expensive cars. I'm 99% sure the same is possible in the US.
    - ggm 5y ago
      They're spending the kids inheritance. Intergenerational wealth issues around this. Most pension and superannuation systems were designed to drain to zero near death. Now, people traded them up to be income streams, are living longer and will vest middle aged kids with a lump sum inheritance. It's not "wrong" in law but it's not what was intended by pensions

poulsbohemian 5y ago

May I ask what your recommendations would be for this? What's broken and how would you fix it?

throwaway6734 5y ago
Build more housing
- poulsbohemian 5y ago
  So how do you manage zoning issues, including water and energy management? As we saw a good example of in Pittsburgh, how do we maintain the transportation and muni services to these new houses? (My real point in asking these questions is that housing issues in say, the Bay Area, are different from those in other parts of the country such that it's really hard to make blanket statements about housing. There are some themes, but I posit there are different answers for different locales.)
  - resonantjacket5 5y ago
    > So how do you manage zoning issues, including water and energy management? Single family housing uses more water and energy per capita, generally one will be fine. And overtime one can slowly upgrade infrastructure -- as is done around the world or what happens in American neighborhoods that are upzoned. It really is a red herring of a problem that is brought up. > As we saw a good example of in Pittsburgh, how do we maintain the transportation and muni services to these new houses? As long as one is building the new housing nearby jobs you'll be decreasing the average miles traveled. Also it is usually the other way around you need a minimum level of density to make transit more viable and useful.
  - throwaway6734 5y ago
    >including water and energy management Expand service? >how do we maintain the transportation and muni services to these new houses? Use the tax money they pay to pay for infrastructure maintenance. >are different from those in other parts of the country such that it's really hard to make blanket statements about housing But the general issues is the same isn't it: there's more demand than available supply or else prices wouldn't be going up

adam_arthur 5y ago

If only the Fed had cared at all that home prices were appreciating twice as fast as they ever did during the housing bubble. And tapped the breaks, rather than opening the floodgates to speculative frenzies across the board. They were a big reason for the 90s tech bubble and 2000s housing bubble too due to excessive rate cuts. Pretty clear they should have considered velocity of the economy and not simply point in time employment and inflation values (which are lagging indicators) Oh well...

rufus_foreman 5y ago
Are you sure you're thinking this through? The Fed is actually about to hit the brakes, people are expecting 7 rate increases this year and more next year. The current 30 year mortgage rate is around 3.5%, the median sale price for a house in the bay area is $1.5 million. With 20% down that's $3500 a month for principal and interest. If the Fed follows through and raises rates say 2%, it turns into $5500 a month. Doesn't do much for affordability. And if you're thinking prices will fall when rates rise, that's not what has happened in the past. Over the last 50 years, every time there has been an environment with rising interest rates, housing prices have gone up, not down: https://awealthofcommonsense.com/2022/01/will-higher-mortgage-rates-derail-the-housing-market/ https://awealthofcommonsense.com/2022/01/will-higher-mortgag.... So you will be paying a much higher rate on a more expensive house.
- adam_arthur 5y ago
  Yes, the damage is done at this point. The speculative frenzy is what drove the price increases, and it should've been short circuited early last year. Prices will be stickier than rising rates increases affordability. But at this point it has to be done. Increasing buying power makes inflationary pressures worse, not better. Higher rates will kill the psychology/speculative aspect of rapid price increases. And the Fed is acting far too late. The yield curve is about to invert as investors think that Fed hikes will lead to a recession. They have to do many of them and fast to get inflation under control, which will very likely lead to a bust. Every time in US history that inflation has been over 5%, a recession followed when the Fed took necessary measures to bring it down. It could've been a smooth landing if they had started long ago and done them in slow increments with moderation. Yet they kept emergency level money printing and rates in place for two full years, far after the acute crisis had passed. A recession would basically undo a lot of the quick recovery/good that the fiscal spending brought about. But seems too late to avoid if the Fed is serious about inflation and doesn't let it run unchecked like the 70s. Though it's pretty apparent to me that prices will come down considerably if mortgage rates were to rise 2% in a short period of time. Which may just happen in the end... We'll see. Only ~10% of homeowners have moved at these prices levels, so there are many with much higher equity levels that would be willing to sell for less in a slow market.

zwkrt 5y ago

Since the beginning of covid i I have been living with 2 friends in a shared house. The house is 1600 square feet, 105 years old, only has one bathroom. And you know what? We get along great, with a yard, space to play music, and shared cooking responsibilities (its just as easy to cook for 3 as it is to cook fr yourself!) For the same rent I pay I could live in a tiny studio apartment with a non functional kitchen and a view into someone else’s non-functional studio, and I would go totally insane. But the tiny studio is all that is a large part if the new housing stock in my city (seattle) right now, with no sign of stopping. My take is that our collective focus on individualism has somehow tricked people into thinking that living alone is an important component of success, and people seem to want it at the expense of having a functional life and functional community. I understand we can’t all live in (multi family) single family housing arrangements, but it saddens me to see that new construction doesn't make space for more shared living. It is cheaper, more efficient, better for mental health, arguably better for children, and wildly unpopular.

zepto 5y ago
Or it could be that you are just lucky to have friends who are easy to live with.
- hollerith 5y ago
  Or it could be that he is just lucky that he is easy to live with.
  - zepto 5y ago
    It wouldn’t be great for him if he was easy to live with but his roommates were not.
    - hollerith 5y ago
      Sure, but then he can expect most of his roommates to be easy to live with, as long as he is willing and able to shop around and to change roommates when needed, even if his current roommates are not.

manuelabeledo 5y ago

And healthcare. And education. And I'm convinced that if these basic necessities were fulfilled, the US would see a dramatic reduction in crime and violence.

chasd00 5y ago

If no one can afford housing then why is it priced so high? Apparently there are buyers right? Otherwise, prices would be lower.

crooked-v 5y ago
The moderately wealthy (probably overrepresented on HN) can afford housing. Everybody else gets to choose between either fighting over whatever's left over or moving somewhere that's cheap but not actually where they want to live.
symlinkk 5y ago
A lot of houses are sold to be rented out. I personally know someone who bought a house a year ago, saw it appreciate $150k, and is now using that as a down payment on an investment property. It’s sickening.
Jtsummers 5y ago
Zillow and others helped to inflate the prices. Around here (Colorado) they were buying up houses at $30k-50k over asking and often within 1-3 days of listing, which meant people weren't willing to sell for the reasonable prices. And once Zillow or companies like them owned the houses, they weren't (until forced) willing to sell for a loss.
- ChrisLomont 5y ago
  So Zillow selling for a loss means houses sell at the prices you wanted, right?
  - Jtsummers 5y ago
    If someone as stupid as Zillow demonstrated themselves to be was willing to spend $50k over asking, they can sell at $25k below their own purchase price and it's a loss. The price still remains higher than it ever should have been.
    - 5y ago

belter 5y ago

Housing is a huge problem in other countries also. Low interest rates being the main cause for it. Large pension funds and other investors gobble up properties looking for yield they can't get in other investments. "Why is there a housing shortage in the Netherlands?" https://dutchreview.com/expat/housing/why-is-there-a-housing-shortage-in-the-netherlands-the-dutch-housing-crisis-explained/ https://dutchreview.com/expat/housing/why-is-there-a-housing... "Germany's next government aims to tackle housing crisis" https://www.dw.com/en/germanys-next-government-aims-to-tackle-housing-crisis/a-59950132 https://www.dw.com/en/germanys-next-government-aims-to-tackl... "The History of the UK's Housing Crisis" https://www.vice.com/en/article/k78mm3/the-history-of-the-uks-housing-crisis https://www.vice.com/en/article/k78mm3/the-history-of-the-uk...

LimaBearz 5y ago
I wish we could all just agree that some things just aren't meant to be for investors and that not all things are meant to have a laissez faire capitalist approach.. I've been looking at properties in LCOL & remote areas of the US and prices shot straight up in 2020/2021 to the point where even having high salary fo an HCOL they become unaffordable. Those places haven't seen wild growths in population and the people are purely speculating as a result of the artificial inflation caused by Zillow and friends. Looking yesterday those properties are on the market still, some for 6+ months now with little to no drop in price... the sellers are delusional
- svachalek 5y ago
  I think the main problem with housing is that it's not laissez faire at least from the production side. With homeowners everywhere fighting tooth and nail against any uptick in housing supply, it's not surprising there's a shortage. Which only serves to make it even more attractive to investors, it's like bitcoin without all the complicated tech.
  - LimaBearz 5y ago
    Absolutely, but there is some laissez faire'ness on the producers side as well. A few of the publicly traded builders in earning calls by their own admittance have touted restricting supply of already built inventory purely to protect their high profit margin. We definitely need to build more, though the producer "market" is failing a bit also

closeparen 5y ago

Housing becoming affordable would be be great for young people, but the older people who own the houses would be pretty upset about the destruction of their life savings and their newly-underwater mortgages. I’m not sure it really increases aggregate happiness.

rufus_foreman 5y ago

Housing is relatively affordable now compared to the past. Yes, house prices are high, but interest rates are low and household incomes are high. There is a post about it at Calculated Risk at https://calculatedrisk.substack.com/p/real-house-prices-price-to-rent-ratio-ade https://calculatedrisk.substack.com/p/real-house-prices-pric... that has an affordability index. The only time housing has been more affordable was after the financial crisis. If housing affordability affected happiness, unhappiness should have been off the charts in the early 1980's. But it wasn't, according to the linked article. People were as happy as ever while taking out mortgages at 18% interest.

xg15 5y ago
> and household incomes are high I've got no data, but I wonder if rising inequality might be warping the statistics here. At least, if incomes were really high across all population segments affected by the housing crisis, we shouldn't see so much talk about unaffordable cost of living, student debt, healthcare costs, etc. Something doesn't add up here. Household incomes might be extremely high for certain groups (e.g. tech workers) while too low to afford decent housing in other groups. > If housing affordability affected happiness, unhappiness should have been off the charts in the early 1980's. But it wasn't, according to the linked article. People were as happy as ever while taking out mortgages at 18% interest This might as well indicate that this way to calculate housing availability is wrong, not that housing availability doesn't affect happiness.
gremlinsinc 5y ago
Average income is 68k, average home price is 408k... According to a google search on how much can a person afford for a home at 60k... you get this: > The usual rule of thumb is that you can afford a mortgage two to 2.5 times your annual income. That's a $120,000 to $150,000 mortgage at $60,000. Can you please tell me how one gets homes at these rates? Because I don't see any available, not here in Utah which isn't even a huge COL state... or anywhere else.. Edit..so to afford the AVERAGE home in America you'd need at least 163k per year annual salary.
- rufus_foreman 5y ago

Wesxdz 5y ago

I spent 6 months helping to prototype and build the Seed Eco Home at Open Source Ecology ('a modular incremental 1000sqft home that two people can build in a week for $50,000') to help solve housing. https://wiki.opensourceecology.org/wiki/Seed_Eco-Home https://wiki.opensourceecology.org/wiki/Seed_Eco-Home Unfortunately, the apprenticeship program was underfunded due to the lack of participation caused by COVID, and maybe more broadly, despite what people say, they are not actually interested in collaborating to reduce human suffering/advance humanity by solving problems like housing when there are personal sacrifices/opportunity costs involved. Look at something like https://en.wikipedia.org/wiki/Depopulation_of_the_Great_Plains https://en.wikipedia.org/wiki/Depopulation_of_the_Great_Plai... and it's pretty clear that the problem with housing is mainly social inequality rather than any underlying technical bottleneck...