3 ms·
> It doesn't have to. Housing can be affordable while going up in nominal terms. For how long? If housing is a good investment, eventually the cost of housing
by AlexandrB 4y ago
> It doesn't have to. Housing can be affordable while going up in nominal terms.
For how long? If housing is a good investment, eventually the cost of housing will outpace the ability of new entrants to the market to afford it. If you're already "in the market", you might be OK. But if you're not, even the down payment may be completely out of reach.
- JumpCrisscross 4y ago> For how long? Infinitely. Wages go up in nominal terms, too. What matters is the real housing price hovering around zero. (Slightly above, localized, is also fine if balanced by migration.)
- bombcar 4y agoReal "house price" for a given house should actually go down over time, because it gets older and worn down and just not quite as good as the new hotness.
- JumpCrisscross 4y ago> Real "house price" for a given house should actually go down over time, because it gets older House, as in structure, yes. Home, as in structure + land, probably not. Real wages are higher today than they were in the 80s [1]. One would expect some of that to filter into land value. [1] https://fred.stlouisfed.org/series/LES1252881600Q https://fred.stlouisfed.org/series/LES1252881600Q
- mechanical_bear 4y agoMost people are constantly doing upgrades to their homes, as well as maintenance.
- JamesBarney 4y agoInflation and real wage growth.