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Yes, and that's why housing is unaffordable these days. An investment which increases its value at the rate of inflation or worse is a pretty poor investment.
by crote 4y ago
Yes, and that's why housing is unaffordable these days.
An investment which increases its value at the rate of inflation or worse is a pretty poor investment. After all, you could probably make more money by simply buying government bonds.
If the housing price increases more than the rate of inflation, it will eventually become unaffordable. After all, salary increases at the rate of inflation - if the housing price increased faster it'd take up an ever-increasing portion of your salary, meaning it'd become less affordable.
Housing was affordable, but its price increased in such a way that it is now unaffordable. This made it a great investment for the people who already owned housing, but newer generations no longer have access to housing and can't invest in it.
- twblalock 4y ago> After all, salary increases at the rate of inflation That's quite an assumption there. Specifically, it assumes no increases in per-worker productivity. By your logic, housing never would have been affordable. But we know that it was! > This made it a great investment for the people who already owned housing, but newer generations no longer have access to housing and can't invest in it. Actually about 43% of new homebuyers are millennials, and that could not happen if new generations could not afford housing. https://www.nar.realtor/newsroom/nar-report-shows-share-of-millennial-home-buyers-continues-to-rise https://www.nar.realtor/newsroom/nar-report-shows-share-of-m...
- EVa5I7bHFq9mnYK 4y agoNewer generations will inherit all that real estate. Some will inherit more, some less, just as some will be born in Australia and some in Malaysia, well, life is unfair.