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I think housing accounts for this almost entirely by itself. Take a look at this graph of inflation adjusted increase in house prices https://www.housepricecras
by nicoburns 4y ago
I think housing accounts for this almost entirely by itself. Take a look at this graph of inflation adjusted increase in house prices https://www.housepricecrash.co.uk/indices-nationwide-national-inflation/ https://www.housepricecrash.co.uk/indices-nationwide-nationa...
That's a 2.5x - 3x increase since 1975, which is huge given that it is the single most expensive thing that anybody buys in their life. If you take housing out of the equation, most people I know wouldn't need to worry about money.
- sokoloff 4y agoFor housing, I think you have to back out the effects of interest rates as well, since the purchase price isn't what hits the monthly budget of households, but rather the payment price. I don't know what the reputable sources for UK mortgage rates are, but in the US, until quite recently, mortgage rates were about 30-45% of what they were in 1975 (~9%), so I'd expect the same monthly budget in real dollars to show up as a lot more capital buying power (expressed as a purchase price).
- nicoburns 4y agoWell interest rates are now rapidly rising, so we're about the get the worst of both worlds.