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https://www.longtermtrends.net/home-price-median-annual-income-ratio/ https://www.longtermtrends.net/home-price-median-annual-inco... nb that there is little r

• imtringued 4y ago
  Housing is an investment, you're not meant to live in it. Money is also an investment, you're not supposed to use it as a medium of exchange. Go kneel and beg in front of the owners of capital and land. Your concerns will be ignored. You think this is psychotic? I doubt that, I can guarantee that secretly you are thinking the same thing. You would rather see yourself and everyone else around you suffer, for a chance to become one of the corrupted yourself. The "working class" does not derive anything from interest and capital gains. It pays more in that it could possibly get back. It is in its collective interest to abolish all rent seeking and let capital yields and profits shrink to 0% as perfect market theory predicts. But no, everyone wants to start their own feudal little dynasty. Eternally passing our obligation to work for them to their descendants, despite the fact that we won't be alive when those descendants are alive, forcing us to pass the debt onto our own descendants.
• kasey_junk 4y ago
  The Case Shiller index shows affordability was similar in the early 50s to now, that was the heart of the baby boom so I think we can predict that won’t be the reason people don’t start families. The article actually mentions that on an inflation adjusted basis the monthly mortgage was the same now as in the early 80s (due to interest rate differences). It’s basically not true that housing costs are categorically different than any other time.
  • mushbino 4y ago
    Back when it was normal to buy a house and support a family on a single income? Nearly impossible now. Sounds like there are some serious flaws with that index.
    • User23 4y ago
      Also while I can’t find internet sources, from talking to old people I get the impression most Americans had 15 year mortgages back the.
      • bombcar 4y ago
        They still exist, 10, 15, 20, 25?, 30 years are all available. But most people don't search for the most value-effective house, they ask how much house can they buy and then buy that. If you're willing to step outside the east-coast corridors and/or break from suburban to "commuting rural" or further, it is quite possible to get a 10 year mortgage on a house on the median income.
        • User23 4y ago
          The point is not their existence, it’s that the Case report is even more of an apples to oranges comparison. Imagine a time when for the same share of your income you could pay off the same house in half the time. > it is quite possible to get a 10 year mortgage on a house on the median income. If you don’t mind living in a meth infested trailer park maybe. I assume of course you’re talking about regional median income, not the national. If you want to live someplace with a decent school district and a good community for raising a family on a single income like the silents and boomers could in major cities then rural America today is no magic bullet. I have no problem with rural living but suggesting hey why not go homestead in BFE Alabama or something isn’t a refutation for housing policy destroying the middle class, which has largely been urban and suburban.
    • endisneigh 4y ago
      You mean when women were generally discouraged from getting jobs people were paid more? What a shocker.
• jjoonathan 4y ago
  The people in charge have houses and want house prices to go up. That's the beginning, middle, and end of the thinking.
  • ta988 4y ago
    To which you add, people that buy houses want to be able to sell making a large benefit. So you profit from using it (by living in it or renting it) and sell it for more than you did put into it...
    • ClumsyPilot 4y ago
      Do they plan to live in a tent after they 'used' the house and sold it? Because if they plan to buy a new house to replace the one they sold, they haven't made any money. And if they want to upgrade, they lost money and the price difference will have increased. The only case where you benefit from rising hoise prices is if all of your income comes from owning property, rather than working a job - i.e. you are a major landowner. If you are doing anything economically productive, from running a business to working a job, houae prices are a blood-sucking vampire squid.
      • marcosdumay 4y ago
        People that had money 3 or 4 decades ago tend to own a few houses and get some income from renting. Also, older people think more about downsizing than about upsizing their homes.
        • lupire 4y ago
          Do they also hate their children?
          • wonderwonder 4y ago
            Nope, I would bet a lot of these people had the means to gift their kids a nice down payment for their first home. That's why the best indicator of where you end up financially is where you start.
• nradov 4y ago
  The CPI includes rent (and owner's imputed rent). No one needs to purchase real estate. That's an investment, not a living expense. Millions of people have started families in rented homes.
  • recursivedoubts 4y ago
    "you'll own nothing and you'll like it"
  • smn1234 4y ago
    agreed to an extent - have rents prices (adjusted) ever been so high throughout history to make renting more difficult to afford than owning in many cases
  • onlyrealcuzzo 4y ago
    You don't need to purchase a home - but historically - if you did - you've been much better off financially. It's the same as saying you don't NEED to go to college. No, you don't. You don't need much of anything... But if you did go to college - whether through correlation or causation - statistically you are much better off. So if college and housing get out of reach for most people - then maybe they will be worse off. Who knows? Maybe it is all correlation and no causation.
    • chii 4y ago
      > You don't need to purchase a home - but historically - if you did - you've been much better off financially. it's not the purchase of the home that made you better off financially, but the ability to purchase a home. If you had that ability, investing in another asset at the same leverage level (such as shares) would net you even more financial income (obviously, its higher risk).
      • onlyrealcuzzo 4y ago
        False - investing in shares on margin would get you margin called and bankrupt in many time-scales. A house can't be margin called (if you can't afford the debt service, you can still end up bankrupt).
• dragonwriter 4y ago
  > the really psychotic aspect of this all is that in the long run it will destroy the economy as family formation craters Starting a family doesn't require owning a home. Vast numbers of people start families without ever owning a home.
  • dont__panic 4y ago
    High housing prices == high rental prices == people living in smaller spaces == people deciding to have fewer or no kids because they don't have the space (or money). Of course, plenty of people start families without solid economic footing. But it's a bit harder to invent space out of thin air than it is to take on debt.
    • lupire 4y ago
      How big was the house your grandmother lived in with 5 siblings? Less than 1500sqft Houses are something like more than double the size they were just 40 years ago, and families are smaller.
      • antifa 4y ago
        Last time I was shopping for houses 1500sqft homes were rarely more than $5k cheaper than equivalent 2000sqft houses.
      • dont__panic 4y ago
        Oh, it's definitely possible to raise a large family with small square footage. My grandparents raised my father in a 3 bedroom house that can't be more than 1500 square feet. And my dad has 6 siblings! It does depend on what families are willing to put up with, though. I'm not sure many of my millenial peers want to raise 7 kids in a 1500 square foot house. It's important not to ask what's physically possible, but instead what's probable given societal expectations.
        • s1artibartfast 4y ago
          Yeah I think you can't ignore the last part about expectations. I think younger Generations are just less willing to compromise on lifestyle to have children. The social institutions that made it much more attractive are crumbling. One obvious one of the churches, and the other is local community. It's one thing to want to have kids when all of your friends are doing it and you live together and can raise them together. Many of these communities are going away
• mschuster91 4y ago
  > home prices have been absolutely bonkers, with two massive bubbles (we are in one right now) Isn't the definition of a bubble that it has the capability to pop and then eventually pops? At least for urban housing, I see no way of that even being remotely possible, neither for the US nor here in Europe. Rural areas simply are too far left behind to support decent human life - no high speed Internet, no public transport, no necessary infrastructure like doctors/pharmacies/grocery stores, no employment opportunities, schools closing down everywhere and that's just the short list of issues. As a consequence, the rural flight can and will only accelerate - I see no way ever for politicians to approve the absurd amount of expenses for bringing rural areas back to speed, not with the aftermath of covid and the current Russian invasion having strained anyone's budgets to the limit.
  • bitxbitxbitcoin 4y ago
    The urban flight to the rural has just as many issues pushing it. Starlink also makes rural life more appealing for some even with all the other rural issues.
    • ghaff 4y ago
      Starlink is a real gamechanger. My dad's house in Maine a little ways from a small city had 1Mbps "broadband." Houses further down the road had nothing wired and all the Plan Bs (conventional satellite/hotspot) were lousy options. While Starlink isn't 100% reliable I could actually work from there if I wanted to.
      • tjr225 4y ago
        Could you? I have been remote for about 4 years and I have difficulty doing my job if my internet goes out for even an hour during my working time. I also have issues doing my job if I can’t stream audio/video due to speed issues- and this happens even with a hardwired connection on occasion.
        • ghaff 4y ago
• mymythisisthis 4y ago
  https://www.cdc.gov/nchs/data/nvsr/nvsr70/nvsr70-17.pdf https://www.cdc.gov/nchs/data/nvsr/nvsr70/nvsr70-17.pdf Number of births have been dropping since 2008ish, from this graph by the CDC. Year 2022 - year 2008 = 14 Does that means starting this year, high school enrollment will be dropping year over year? In 4 years time, college enrollment will be dropping year over year. In 8 years time, labor enrollment will be dropping year over year. As for housing, there was a baby bump around 2008, that helps explain the housing boom for the last number of years. New parents scramble for housing in 2008, then a larger home (after the child hits 6 years old?) around 2014 . But as those kids are now starting high school, and families have settled in for the next 4 years, does this imply a housing slump?
  • formerkrogemp 4y ago
    Yes, college enrollment, high school enrollment, and labor participation are all down, starting last year. People can't afford new houses with a mortgage with rising interest rates. Fewer young adults ("Gen Z") are choosing, proportionally, to go to college. The plummeting birth rate and the highly strict immigration controls as well as our political instability have all sent the message to international students that they're not wanted here. The system of gaokao has been changed recently, so more Chinese parents won't be sending their children to the US where they'll be charged full tuition plus some. The shortfall in tuition is being made up by cutting academic and sports programs. My friends who work in college finance expect the plummeting birth rate and dropping international enrollment to really hit colleges hard in 2025, so you can expect a lot of academic cuts, sports cuts, and outright college failures barring massive bailouts for the institutions. My college had to cut 3 sports teams and 6 majors recently along with tuition. Many older folks are retiring in fields where they might have worked part time for extra money or for that thing that they don't think is worth it anymore following COVID. I've heard it called the "silver tsunami." The "boomers" are all retiring with only those without retirement savings or without generous relatives to fall back working for health insurance or for a little money to pay for food. The number of flight incidents with rude, disruptive, or violent flyers has reached records levels. Working a grocery store over the past few years supposedly part time but always overtime lately, I have noticed more entitled, rude, desperate, and stressed out customers more generally. It's not just about masks either. I was threatened two years ago because we didn't have soy baby formula in stock for example, as if there were some being hidden in back stock. In accounting where I work now, we had the senior associates and middle management all quit in a short timespan for other firms. 3/4 of CPAs are eligible for retirement. Your fortune 500 company audits are now being handled by people collectively with way less experience than they used to. Standard operating procedure seems to SALY ("Same As Last Year") in audit the past couple of years or blame discrepancies on COVID. So much fraud has likely happened that will probably never come to light. Nurses and doctors are all facing mental health crises. Violence against medical professionals is rising at rapid rates even prior to the pandemic. Many health professionals don't report assaults either because of their altruistic tendencies. More than half of nurses are thinking or planning on quitting their jobs. More than half of all doctors wouldn't recommend or don't want their children to go into medicine. Here's a fun little excercise for you. Google the nearest hospital near you and see how many openings they have. Especially for security. The hospital near me has never had a security officer. Now they have five. Hospital workers are being taught de-escalation techniques and taking self defense classes. Senior homes are facing record shortages of labor. I suppose this is a very brief and calm overview of what's going on. I hope that programmers appreciate how much pay and how little stress you receive in comparison to many other industries. Expect to take care of more relatives, pay more to eat out, and healthcare shortages near you soon. Filipino nurses and teachers are being trained and brought in to fill positions filled briefly by the national guard. Our country is in crisis, and most of us just don't know it yet. I'm not even getting into the healthcare issues in Britain, Canada, and Australia as well.
• faangiq 4y ago
  This was all part of the plan to build a nation of mindless debt slaves. It was very effective.
  • imtringued 4y ago
    When you save money and never spend it, someone must remain a debt slave until you have spent your money. From a macroeconomic and historic perspective this has never happened which is why it is necessary to have inflation erode debts as otherwise people would be eternal debt slaves.
  • FooBarBizBazz 4y ago
    It's actually true, in a way. There was a worry after WW2 that a large number of young, single men, trained in combat and now returning home, would destabilize American politics, especially if they could not be absorbed by the labor market. One response was the GI bill, so that some could go back to school. That would help to slow their return to the job market, and hopefully prevent unemployment. Another was the 30-year mortgage. If these men were tied down with obligations, and families, and houses, they would cease to be a volatile element in society, the thinking went.
    • lordnacho 4y ago
      The young men -> instability theory is one I've heard several times. It makes sense, but is there evidence or some sort of seminal article about it?
      • BlargMcLarg 4y ago
        In GP's context, no. The basics of the theory is a lack of incentives for young men to play the game, which leads to either proactive destruction or passive destruction. War usually leads to a surplus of women and a lack of male competition in any other area (jobs, land, wealth, opportunity), incentivizing men to play according to the social contract rather than being violent or giving up. In fact, some would say starting a war is seen as a society killing off its surplus men in hopes of getting something out of it (every war is a rich man's war). It's difficult to get decisive evidence as the phenomenon tends to happen at the same time as other things, and it basically devolves to game theory. At the very least, it seems like a very, very bad idea to incentivize the population with the largest capability to destroy, to destroy. Especially when they are necessary to create, educate and set an example for the next generation of men.
• notfbi 4y ago
  It's hard to connect interest rates to house prices historically, but I think that's because there's two scenarios going on, with some substitutability, but a general move to the latter over the last 50-30 years due to zoning and planning changes and urbanization. In areas where developable land is very plentiful - rural, deserts, minimal environmental/nimby protections, etc. - land prices will remain low and house prices should be constrained by building costs. In the same way that we don't expect TV or car prices to go up very much with lower interest rates, even though you consume durable goods over 20years, as competition holds the prices to what it costs to make rather than how you benefit from them. Over the long term, it used to be that house prices tracked construction costs pretty well. However in areas where the fixed quantity of land is binding - urban, or areas with stringent protections and managed growth policies - land and house prices will be bid up to what people can afford via monthly payments, and will therefore respond greatly to interest rates (and IR expectations) Further add on that high property taxes in some regions can dilute the costs associated with financing changes (if interest rates increase from 1 to 2%, but you're paying 5% in property taxes, that's only a 7/6% increase in your costs) edit: to summarize, where supply is elastic, interest rate reductions should cause quantity supplied to increase, price to remain the same, and monthly costs to decrease. Where supply is inelastic, the quantity stays the same, monthly payments stay the same, price increase. We've possibly moved into an environment with more supply inelasticity in recent history.