3 ms·

> Is it really true that previous generations didn't have to sacrifice to buy homes? That seems patently false to me. Take a look at average home price by year

> Is it really true that previous generations didn't have to sacrifice to buy homes? That seems patently false to me. Take a look at average home price by year: https://www.fool.com/the-ascent/research/average-house-price-state/ https://www.fool.com/the-ascent/research/average-house-price... Now compare that to average wages: https://www.ssa.gov/oact/cola/awidevelop.html https://www.ssa.gov/oact/cola/awidevelop.html

Godel_unicode 4y ago
Now look at the double digit interest rates they paid on those mortgages. You pay the monthly payment, the top line number is largely irrelevant. https://www.atlanticbay.com/knowledge-center/history-of-mortgage-rates/#:~:text=Thanks%20to%20their%20efforts%2C%20more,Freddie%20Mac's%20largest%20recorded%20figure https://www.atlanticbay.com/knowledge-center/history-of-mort....
- TylerE 4y ago
  They didn’t have cellphone or internet bills. Financing cars wasn’t really a thing. Trade offs.
  - ericd 4y ago
    Those add up to <$100/mo if you do it right, and you generally shouldn’t finance cars.
    - sweezyjeezy 4y ago
      Student loans though...
      - Godel_unicode 4y ago
        State schools, not living on campus, and community college though. You are going to college to learn, not to party, right?
        TylerE 4y ago
        In state tuition is well into 5 figures in a lot of places. Even Community College is more expensive than it used to be - my local is almost $3k/yr
        Godel_unicode 4y ago
        So a 4 year degree is on the order of 30k, aka what a lot of people pay for one year on campus. That’s pretty easily achievable on entry level salary (I know, work while you’re in school, le horror). Even if you have to take loans the whole way that’s a car note. Are there people who this is out of reach of? Yes. Would it be cool if it were free? Of course. Is it crippling debt that makes a comfortable life impossible? Don’t be absurd.
        selfmodruntime 4y ago
        Okay. You now have a harder time at being accepted at the highest paying companies because you didn't graduate from a select few universities. Hell, in law, most companies where you can really earn a good wage don't even hire outside of harvard.
        Godel_unicode 4y ago
        Sounds like a hidden bonus; encouraging people not to be lawyers!
        bmy78 4y ago
        Ok, if you get into Harvard, go to Harvard. Your opportunities in the long run should outweigh any sort of student loans you have to pay back. If you're going to NoName Private College that's 90% of the cost of Harvard, go to state school instead. And apply to scholarships. Lots and lots of scholarships.
ljf 4y ago
Don't forget that until about the mid 90s most people were only buying with one income. And even into the 2000s that second income was often significantly lower. So that graphs never align that well when you look back and try to say 'in the past it was 3x salary for a house, now it is 6x' That is as buyer are now competing for houses with two good salaries to buy with.
- ljf 4y ago
  To add to this, the low interest rates have added the ability for these joint income purchasers to bid higher to win the property they want. In the UK at least, the move has broadly been in line with the 3x joint salary with mild adjustment for increased borrowing opportunities, but largely driven by the increase in joint salary.

Godel_unicode 4y ago

Now look at the double digit interest rates they paid on those mortgages. You pay the monthly payment, the top line number is largely irrelevant. https://www.atlanticbay.com/knowledge-center/history-of-mortgage-rates/#:~:text=Thanks%20to%20their%20efforts%2C%20more,Freddie%20Mac's%20largest%20recorded%20figure https://www.atlanticbay.com/knowledge-center/history-of-mort....

TylerE 4y ago
They didn’t have cellphone or internet bills. Financing cars wasn’t really a thing. Trade offs.
- ericd 4y ago
  Those add up to <$100/mo if you do it right, and you generally shouldn’t finance cars.
  - sweezyjeezy 4y ago
    Student loans though...
    - Godel_unicode 4y ago
      State schools, not living on campus, and community college though. You are going to college to learn, not to party, right?
      - TylerE 4y ago
        In state tuition is well into 5 figures in a lot of places. Even Community College is more expensive than it used to be - my local is almost $3k/yr
        Godel_unicode 4y ago
        So a 4 year degree is on the order of 30k, aka what a lot of people pay for one year on campus. That’s pretty easily achievable on entry level salary (I know, work while you’re in school, le horror). Even if you have to take loans the whole way that’s a car note. Are there people who this is out of reach of? Yes. Would it be cool if it were free? Of course. Is it crippling debt that makes a comfortable life impossible? Don’t be absurd.
      - selfmodruntime 4y ago
        Okay. You now have a harder time at being accepted at the highest paying companies because you didn't graduate from a select few universities. Hell, in law, most companies where you can really earn a good wage don't even hire outside of harvard.
        Godel_unicode 4y ago
        Sounds like a hidden bonus; encouraging people not to be lawyers!
        bmy78 4y ago
        Ok, if you get into Harvard, go to Harvard. Your opportunities in the long run should outweigh any sort of student loans you have to pay back. If you're going to NoName Private College that's 90% of the cost of Harvard, go to state school instead. And apply to scholarships. Lots and lots of scholarships.

ljf 4y ago

Don't forget that until about the mid 90s most people were only buying with one income. And even into the 2000s that second income was often significantly lower. So that graphs never align that well when you look back and try to say 'in the past it was 3x salary for a house, now it is 6x' That is as buyer are now competing for houses with two good salaries to buy with.

ljf 4y ago
To add to this, the low interest rates have added the ability for these joint income purchasers to bid higher to win the property they want. In the UK at least, the move has broadly been in line with the 3x joint salary with mild adjustment for increased borrowing opportunities, but largely driven by the increase in joint salary.