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> would have been commonplace 50 years ago 50 years ago was a pretty special time, if we're being honest. The ratio of home prices to income was an all time l
by rootusrootus 3y ago
> would have been commonplace 50 years ago
50 years ago was a pretty special time, if we're being honest. The ratio of home prices to income was an all time low. Go back to the 50s and it was the more typical 4x ratio. Clearly the 6x and 8x bubbles we've recently experienced aren't sustainable, but we're also probably not going back to the relative utopia that was 1970s house prices.
- 908B64B197 3y ago> we're also probably not going back to the relative utopia that was 1970s house prices. What did the people in the 70's do differently?
- rootusrootus 3y agoProbably benefiting from a number of things coming together, is my guess. Not that I'm an economist, or even pretending to be one. But birth rates dropped precipitously throughout the 1960s, marriage was more common than in recent years, and mortgage rates were higher than in recent years (nothing like the 1980s, of course, but still, 7-8%). All of these, to my lay understanding, would tend to put downward pressure on house prices by reducing demand. Since then we've ratcheted up expectations for what minimal housing should be, which raises the price floor. Dropped interest rates, which pushes up demand. People not getting married need their own home, pushing up demand some more. Forcibly constrained sprawl, pushing down supply. Zoning, etc. It's hard to imagine how we actually lower prices significantly (aside from the bubbles, which I'd guess have as much to do with interest rates as anything else).