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Home buyers need 80% more income to buy than 4 years ago
- gopal_virtual 3y agoIf you own a piece of land, you're rich. A high paywall, deters large investment from low-cap income group and thus reducing ownership. If you never own, you'll keep on paying the rich. I believe that's the setup.
- zrn900 3y agoCapitalism working its magic. As the resources and people to exploit abroad dwindled, it started eating itself from inside out to profit as was predicted. https://www.reddit.com/r/canadahousing/comments/tose5z/landlord_who_owns_30000_houses_explains_why_young/ https://www.reddit.com/r/canadahousing/comments/tose5z/landl...
- d6e 3y agoThis is a cartel, not capitalism. It's literally voters doing regulatory capture and preventing new housing because they want their property values to go up.
- Arn_Thor 3y agoThat used to be the driving factor, politically at least. But things have changed. As older folks retire and sell to fund their end of life care, funds, corporations and the super rich have swept in to buy the properties, increasingly pricing out regular folks who depend on an (also more expensive) mortgage which the investors don’t have to worry about. So on the margin, fewer and fewer homes are in regular people’s hands. That is capitalism’s inevitable consequence: those that have wealth can ever more quickly acquire more of it.
- zrn900 3y ago> This is a cartel, not capitalism When there wasnt regulatory capture in late 19th, entire US ended up getting owned by ~12 robber barons. The housing situation was the same back then: Barons would be buying up or building entire neighborhoods in which people would have to live like feudal tenants on knife's edge. These futile attempts to redeem capitalism are making it difficult to address the problems that it creates.
- PM_me_your_math 3y ago[dead]
- jncfhnb 3y agoI don’t feel like 59k income was enough for home ownership during peak Covid times
- pocketarc 3y ago> The income needed to comfortably afford a home is up 80% since 2020 Based on the $343,000 house price, and the 3%/7% rate difference they mention between 2020 and 2024, the mortgage on a house the exact same price would've gone up from $1900/mo to $2650/mo. That alone is already a 40% increase. Obviously houses prices have inflated along with everything else, but the pain is really mostly coming from the increased mortgage rates. Even a cheaper house would still be painfully more expensive today. What I wonder is... when would it make sense to try to return to a low interest rate environment (if ever)? Is there a point where we think it will?
- amluto 3y agoConversely, perhaps that $343k home actually shouldn’t be worth that much. In a properly functioning market (e.g. no perverse incentives to own a unit and decline to rent it instead of renting it for less money, along with genuinely unpenalized liquidity such that a long-time owner can sell and buy something different without paying utterly absurd taxes and fees), prices should tend toward the market-clearing price. Sadly, in real estate, one can easily own a $1M house, prefer to live in a $800k house, and have a situation in which making that trade results in a net loss of cash.
- dukeofdoom 3y agoI think it's easy to say that, until you had to build one for that price. The lot alone and hook up fees, taxes would probably hover around 1/3-1/2 of that price. Then House it self is a lot of labor to construct. Even moving the materials sometimes is very labor intensive. Plumbing, Bathrooms, Lighting, there's a lot that goes into it. Immigrant and cheap manual labor is probably what makes it affordable.
- pixl97 3y ago>The lot alone and hook up fees, Along with many of the places people keep building are in areas short of water. Since most of it is SFH larger water transport infrastructure has to be installed at great cost and though places that are already developed. Then you add more expensive road infrastructure that taxes on the SFHs won't fully pay for. You build a huge infrastructure debt trap that we're both paying for now (from the past) and the us in the future will have to pay even more for.
- chrsw 3y agoI was wondering why in my neck of the woods a small 2 bedroom has a mortgage of about $4500/mo.
- turnsout 3y agoThe number of luxury condos in big cities has always confused me. I guess the market is dual-income couples with high salaries? Even coming from the software world, I wonder what these people do. Finance?
- lifestyleguru 3y ago> the market is dual-income couples with high salaries This is some kind of memic impossibility. It's impossible to move into a city for a high paying job AND have a partner AND the partner earning a lot too. The closest I've ever been was when my job and the relationship disintegrated at the moment the partner got such job after over 5 years of searching, and I really don't feel like trying again ever.
- Kirby64 3y agoOne partner does remote work, and the other moves for a job? That seems trivial and not particularly unusual.
- lifestyleguru 3y agoHaven't encountered anything like this.
- JambalayaJim 3y agoMost of these couples are people who grew up in and/or have strong networks in those cities to begin with.
- lifestyleguru 3y agoSuch couples have something inherited or presented by parents.
- datavirtue 3y agoNow every time a price increases it's "inflation."
- rtev 3y agoThis appears to be what happens when rich people that don’t need houses buy them anyway as investments. There should be laws preventing a person from owning more than three houses in the United States.
- lifestyleguru 3y agoThis is a valid point all over EU as well.
- delish 3y agoI'll try to invoke Cunningham's Law by saying: Housing is close to a perfectly-competitive market. I think the above is true, but I'd welcome counterexamples. So, the way to depress housing prices is to build more houses. _Most_ housing regulations, including making it illegal for people to own four houses, reshuffle the ownership of existing houses, and don't depress their prices. As regards that regulation: if the super-rich aren't able to own $many houses, the merely-rich will buy more, and thus housing prices would be the same.
- Buttons840 3y agoThis makes sense to me, if 10 families want a place to live and there are 8 places to live, housing prices will trend towards infinity, until people give up and multiple families live together. We need more places to live, at the end of the day there's no way around that. Regulation might help though. If we regulate it so that it's harder to profit from real estate, then people will find other investments instead. This is good, because as long as real estate is a favorite investment for the wealthy, there will be a "mysterious" resistance to any efforts to lower the prices by building more houses. I'm not an expert here, but this makes sense to me. Did I miss anything?
- aaomidi 3y agoYes you did miss something. You missed that it’s 10 families, with 20 houses. With one family owning 18 of them.
- paulddraper 3y agoHow much has income increased? (Not 80% but you need to include that)
- deleted 3y ago[deleted]
- NAHWheatCracker 3y ago> “The income needed to comfortably afford a home is up 80% since 2020, while median income has risen 23% in that time,” the report states. That equates to $47,000 more than four years ago. It's the second paragraph in the article.
- PM_me_your_math 3y ago[dead]
- Pokerface777 3y agoI thought I sold at a good time 4 years ago, for 3X what I bought it for... (bought in 2009)
- andrewstuart 3y agoOwning a house is not for ordinary people any more. People/sheep are renters. Houses around the world are being sold to: corporate mega landlords "Mum and Dad" investors international money laundering criminals money fleeing countries like China where economies are collapsing and the government is becoming more authoritarian
- RestlessMind 3y agoAnd yet homeownership rate in the US has been remarkably stable since 1965: https://fred.stlouisfed.org/series/RHORUSQ156N https://fred.stlouisfed.org/series/RHORUSQ156N Right now, it is at 65.7% - higher than the fabled 60s and 70s.
- polski-g 3y ago65% of Americans own their own home.
- mock-possum 3y ago> Auto loan debt increased by $12 billion to $1.61 trillion I really can’t understand how people are so desperate to drive a new car that they’d go into debt to do it. Why would you sign up for years worth of payments on a $15k+ car when you could just buy a used one outright for like $4k, and not have to worry about it? A house, sure, you then own real estate, you even can borrow money against the value you’ve already paid into your property, and when you’re ready you can sell it, likely for significantly more than you paid. Real estate is such a solid investment. But a car??
- lotsoweiners 3y agoHonestly I’ve never seen a $4k car that I would consider worth purchasing and driving. I’d be too concerned about reliability and maintenance. Then again I haven’t seen any new cars in the $15k range that I’d consider driving either.
- mock-possum 3y agoYeah I guess I just have very different requirements for cars than other people. All I really need is a thing on wheels that goes when I push the go button, and has an empty space for me to stuff a stereo into.
- supertrope 3y agoThose $4,000 cars now cost $10,000. https://www.iseecars.com/what-happened-to-affordable-cars-study https://www.iseecars.com/what-happened-to-affordable-cars-st... https://site.manheim.com/en/services/consulting/used-vehicle-value-index.html https://site.manheim.com/en/services/consulting/used-vehicle...
- pavel_lishin 3y ago> Why would you sign up for years worth of payments on a $15k+ car when you could just buy a used one outright for like $4k, and not have to worry about it? Because I want my child to be in a relatively new car, with a proven safety record, no history of accidents, surrounded by airbags and all the other safety features we've come up with. For $4k, she'd be sitting in the back seat of a 1992 Nissan Sentra, counting lane-changes through the rusted-out hole in the back-seat floor: "one... two... dad, the hole getting bigger!"
- qeternity 3y agoThe cure for high prices is high prices. There are a lot of conspiratorial comments blaming everyone from investors and speculators to contractors and developers. The reality is that it's largely homeowners and the government to blame. The number of homes bought by investors is a rounding error. And developers will build homes as long as there is profit margin. The government (and society) turned housing into a retirement plan. We decided to enact policies to push people onto the "housing ladder". We confused cause and effect, and the result is the largest misallocation of capital in human history. Blame NIMBYs and ZIRP. Want to get rid of speculators? Stop making houses an investable asset. People should not be relying on a commodity for their retirement.
- mcntsh 3y agoIn Germany there's no such thing as a "housing ladder," and yet the situation is much worse here than in the US. I don't think the housing ladder can be blamed alone.
- punkbit 3y agoA room in a shared house with strangers is the new “home”. Killing my self working and studying for nothing.
- lifestyleguru 3y agoWorking remotely fell on the face and smashed its nose the moment it stood up.