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> high housing costs reflects drastic increases in income. But it doesn't, housing prices have. roughly doubled in UK for example since 2008, and wages have f

> high housing costs reflects drastic increases in income. But it doesn't, housing prices have. roughly doubled in UK for example since 2008, and wages have fallen.c If you measure housing cost is multiples of income, they have grown massively in the past 70 years. If the price of chicken went up as much as price of housing over the same period, a chicken would cost like $55 or smth

vidarh 3y ago
What matters is the long term trends and the multiple is less relevant than the affordability of the monthly cost of housing, or there wouldn't be sufficient buyers able to afford driving the costs up. The multiple of my mortgage to income is higher than for my parents, but I'm still left with more spending power left over, because my lending is cheaper, the LTV higher, and not all the other costs have increased at a similar rate. Overall, despite a higher proportion of my income going to housing, I'm far better off than my parents were at my age.
- ClumsyPilot 3y ago
  I am not sure about your personal situation, but my parents paid off their property faster because it was cheaper, despite higher interest rates. After 15 Years all theie property is fully paid. They are much better off now. And low interest rates didn't last, now they are back up in Europe, so people with large mortgages are not having to make huge repayments and will be making them for the next 30 years. generally speaking we have more capital tied up in housing than we do in productive economy. This is inefficient deployment of capital and is not economically healthy.
  - vidarh 3y ago
    I think this is a distraction. It's very simple: House prices reflects peoples ability and willingness to pay. The demand doesn't come from nothing. If people couldn't pay,there wouldn't be demand no matter how much people would like to. Meanwhile, in the UK where I am now, there is plenty of empty housing at lower cost. What there is a lack of is housing people want to pay for where they want to pay for it, because many - not all - can afford to be picky. That's not to say it wouldn't be a tremendous benefit to society to drive down house prices, because it would, but the housing market is elastic: People can, and have (and many still do), lived in far more cramped conditions, and do when they can't afford to pay more.E.g. house shares and the like. The actual problem of high prices is a level of inequality that means a subset struggle more. But that is insufficient to explain e.g. fertility rates across the board when the overall wealth is at it is. Considering my original example, if you look at indications of disposable income in Norway, you'll see people e.g. taking far more holidays abroad, far more have holiday homes, etc. despite spending more on housing. Overall wealth is through the roof and you see it everywhere. And yet fertility rates are not. This is also consistent with the development we see everywhere in the world. It's played out in country after country, and is an effect that plays out over many decades.

vidarh 3y ago

What matters is the long term trends and the multiple is less relevant than the affordability of the monthly cost of housing, or there wouldn't be sufficient buyers able to afford driving the costs up. The multiple of my mortgage to income is higher than for my parents, but I'm still left with more spending power left over, because my lending is cheaper, the LTV higher, and not all the other costs have increased at a similar rate. Overall, despite a higher proportion of my income going to housing, I'm far better off than my parents were at my age.

ClumsyPilot 3y ago
I am not sure about your personal situation, but my parents paid off their property faster because it was cheaper, despite higher interest rates. After 15 Years all theie property is fully paid. They are much better off now. And low interest rates didn't last, now they are back up in Europe, so people with large mortgages are not having to make huge repayments and will be making them for the next 30 years. generally speaking we have more capital tied up in housing than we do in productive economy. This is inefficient deployment of capital and is not economically healthy.
- vidarh 3y ago
  I think this is a distraction. It's very simple: House prices reflects peoples ability and willingness to pay. The demand doesn't come from nothing. If people couldn't pay,there wouldn't be demand no matter how much people would like to. Meanwhile, in the UK where I am now, there is plenty of empty housing at lower cost. What there is a lack of is housing people want to pay for where they want to pay for it, because many - not all - can afford to be picky. That's not to say it wouldn't be a tremendous benefit to society to drive down house prices, because it would, but the housing market is elastic: People can, and have (and many still do), lived in far more cramped conditions, and do when they can't afford to pay more.E.g. house shares and the like. The actual problem of high prices is a level of inequality that means a subset struggle more. But that is insufficient to explain e.g. fertility rates across the board when the overall wealth is at it is. Considering my original example, if you look at indications of disposable income in Norway, you'll see people e.g. taking far more holidays abroad, far more have holiday homes, etc. despite spending more on housing. Overall wealth is through the roof and you see it everywhere. And yet fertility rates are not. This is also consistent with the development we see everywhere in the world. It's played out in country after country, and is an effect that plays out over many decades.