4 ms·

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

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.
Robotbeat 4y ago
Home affordability is same now only because now you have two incomes, and no one to raise the kids.
shepardrtc 4y ago
> It’s basically not true that housing costs are categorically different than any other time. Are you a realtor?
- jjoonathan 4y ago
  I'm getting "don't think about the price, just think about the monthly payment!" vibes from this post, so if not real estate then definitely some kind of sales.
notfbi 4y ago
In the early 80s with high inflation and therefore high mortgage rates, the first years of mortgage payments would be a relatively high percentage of income: it's very front-loaded. However, the debt owed quickly gets deflated away, so over the span of 25 years you're actually paying a much lower percentage of your real income. To take it to the extreme, if inflation was approaching infinity, and mortgage rates were 2% + inflation, your first payment would be 99.9% of the value of the loan, and all subsequent payments would be essentially 0% of your nominal income. Add to that fact that a downpayment went a lot further (if you saved to 50% of your median income, that was 20% down payment of median house), and affordability back even in the worst of the early 80s, while not great, was better than now.

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.

Robotbeat 4y ago

Home affordability is same now only because now you have two incomes, and no one to raise the kids.

shepardrtc 4y ago

> It’s basically not true that housing costs are categorically different than any other time. Are you a realtor?

jjoonathan 4y ago
I'm getting "don't think about the price, just think about the monthly payment!" vibes from this post, so if not real estate then definitely some kind of sales.

notfbi 4y ago

In the early 80s with high inflation and therefore high mortgage rates, the first years of mortgage payments would be a relatively high percentage of income: it's very front-loaded. However, the debt owed quickly gets deflated away, so over the span of 25 years you're actually paying a much lower percentage of your real income. To take it to the extreme, if inflation was approaching infinity, and mortgage rates were 2% + inflation, your first payment would be 99.9% of the value of the loan, and all subsequent payments would be essentially 0% of your nominal income. Add to that fact that a downpayment went a lot further (if you saved to 50% of your median income, that was 20% down payment of median house), and affordability back even in the worst of the early 80s, while not great, was better than now.