7 ms·

Half of U.S. Homeowners and Renters Struggle to Afford Their Housing Payments

49 points by okasaki 3y ago

probably_jesus 3y ago
[dead]
game_the0ry 3y ago
It's unfortunate how much people need to sacrifice to afford housing. And I dont know how else to read this except -- home prices will go down.
- PKop 3y ago
  That and/or rates
  - game_the0ry 3y ago
    Why would the fed cut rates?
    - PKop 3y ago
      Short answer for why they would is the economy broadly can't sustain rates this high. But I think it's worth considering there are many that subscribe to the theory the Fed has almost no control over long term rates (mortgage rates being one type of these), which are set by the market alone based on inflation + growth expectations. [0] I think it is inevitable that issues like this thread and others whereby many businesses and individuals cannot cope with debt service (see record high credit card delinquency rates) [1] and inflation, along with near record low unemployment means economy will hit a brick wall and prices and rates will fall, regardless of what the Fed wants or does or says. This is already part of the reason long rates have been underneath short rates, as market has been pricing a slowdown for a while, and Fed wasn't able to set long rates above where they put short. Additionally, to the degree Fed can influence long rates at all, some would argue raising short rates very high very fast (yes of course to counter inflation) itself can depress long term growth thereby beyond some threshold lowering longer term rates if market expects lower growth. [0] https://medium.com/the-investors-handbook/why-the-fed-doesnt-control-long-term-interest-rates-5a132979419 https://medium.com/the-investors-handbook/why-the-fed-doesnt... [1] https://archive.is/s14dY https://archive.is/s14dY
      - game_the0ry 3y ago
        > Short answer for why they would is the economy broadly can't sustain rates this high. I disagree, but... Putting aside the fed and the degree they can set interest rates at the long end of the yield curve - what you are saying is that rates will go down bc the economy can't sustain the debt (in your words - "economy will hit a brick wall and prices and rates will fall"). In other words, there would be a recession bc interest rates are too high. By the time that recession hits, people will be losing job - people sell assets (houses + stocks) when they lose their jobs. In the event that the fed lowers rates, it will be bc of a recession, not to prevent one. By then, the damage is done.
        PKop 3y ago
        Yea that's why I mentioned unemployment being so low now, nowhere to go but up, and once it does that will exacerbate recession. I do think Fed will lower because of recession yes. The damage will be done yes. It sounds like you do agree.
- jncfhnb 3y ago
  Seems like a terrible bet
  - tigeroil 3y ago
    Indeed. Everyone I've spoken to seems to be convinced that clearly, something has to change, house prices must drop, but the reality is, there's too many people for too few houses, and unless that changes housing will always continue to become more expensive.
    - game_the0ry 3y ago
      > but the reality is, there's too many people for too few houses Not really... There are 2 big things that are skewing the housing market now: 1. In any given market, all-cash investors make up about 20-30% of the demand. [1] They will buy at almost any price. Even though they make a small percent of existing owners (iirc, its like 1-3%), they make an 20-30% portion of demand right now. 2. Inventory (houses that are for sale now, not just total stock) is at historical lows. This is bc of interest rates going higher - nobody who has 3-4% fixed rate locked in will sell (until they have to). The shortage that people refer to is not a shortage in homes that exist, its a shortage of homes for sale. Now imagine those 2 dynamics flipped the other way - what happens to prices then? Also food for thought - every market boom/bust cycle was caused speculative demand. What happens when 20-30% of demand goes away? More food for thought - the folks that feel like they are locked out of the market and have been screwed (the young) are growing increasingly resentful. How will they vote? [1] https://www.corelogic.com/intelligence/us-home-investor-share-reached-new-high-q4-2023/ https://www.corelogic.com/intelligence/us-home-investor-shar... [2] https://tradingeconomics.com/united-states/total-housing-inventory#:~:text=Total%20Housing%20Inventory%20in%20the%20United%20States%20averaged%202263.12%20Thousands,source%3A%20National%20Association%20of%20Realtors https://tradingeconomics.com/united-states/total-housing-inv...
      - jncfhnb 3y ago
        If interest rates plummet and people start purchasing houses that they can only afford due to cheap loans, I would expect home prices to… rise. As they did before.
- acover 3y ago
  It can always get worse. Lots of counties live with price to income ratio of 20. The USA is 6.
  - game_the0ry 3y ago
    Indeed, I see you're point. We americans have been living beyond or means and much better relative to the rest of the world, and the world is starting to equalize. Makes sense.
TexanFeller 3y ago
> The most common sacrifice was taking no or fewer vacations. More than one-third of homeowners and renters (34.5%) who struggle to afford housing indicated that they skipped vacations in the past year in order to afford their monthly costs. Vacations, at least the kind where you travel somewhere, are the definition of luxuries. It's jarring to hear about skipping them adjacent to a paragraph about skipping meals. I went on only a handful of vacations growing up, all of them staycations or domestic road trips with some other reason for going there or with someone else paying.
- swatcoder 3y ago
  Yeah, lifestyle expectations have shifted dramatically and many people have become strongly attached to consumer luxuries and extravagences. If you watch or read older media (fiction or non), or if you lived through it, you regularly see even middle class and professional characters living with sparse conveniences in their home and going on exactly those sort of modest road trips and motel stays you talk about and many of us remember. Trips to faraway lands, were treated as a novelty that you might bucket list once or twice rather than an annual necessity. You didn't buy a new TV until the old one broke. You talked to your neighbors and borrowed each others tools. You ate out as a treat, not because you just didn't feel like cooking that day. You planned your grocery shopping around sales and strove not to deviate from the plan while at the store. And these expectations shifted for everyone, not just incoming generations. It wasn't a generational divide and I don't mean to stir up boomer/zoomer tension -- it was a dramatic cultural shift that almost everybody seems to have adopted without even noticing. Exagerrated consumerism and "we are all middle class on the inside" mentality was how the West distinguished itself from its Cold War villian and now we are where we are. Everybody needs an often-unattainable and generaly-unsustainable amount of money to fulfill a life that few would have taken seriously just a few decades earlier, and the essential dissonance is producing widespread misery and angst.
  - babycheetahbite 3y ago
    Very well put. People simply don't recognize the standard of living they enjoy, because "everybody" has it.
spdustin 3y ago
I respectfully urge any commenters to consider that a good portion of us HN readers are in this 50%, despite living outside of the valley.
pelagicAustral 3y ago
I was on the verge of buying pre-Covid era. I was going to end up paying mortgage for 20/25 years. My plan was a small 2-bedroom bungalow, I was still considering then, that I was going to pay quite a lot for what I wanted... Covid happened, prices went to the roof and beyond... I'm not buying squat right now, no way... Prices remain just the same, it's funny when they go up they go all the way up as high as they can push it, when then come down you can't even feel they did. I'm scratching 40s and I think my new plan is to go somewhere else... save for the next decade and move to Northern Africa, which I love and have ties to... Retire there and work remotely, or teach or a combo of those... I hope it works, even if it doesn't beats the crap out of grinding my whole life for a small pod in the west.
- cpursley 3y ago
  I’d like to check out North Africa. Any suggestions on good cities (safe, clean, fast internet) with ocean access?
  - pelagicAustral 3y ago
    Not going to lie here. It was shocking at first, the cultural clash was intense at first, and I was like a scared child wandering about... But afterwards I felt much more at home than at any other place I've lived before (including where I live now). People are very nice, they are gentle, sincere, humble and welcoming (in general). Just this is enough of a reason for me to move, really... I recommend Morocco or Tunisia. They have some amazing cities, and you will miss none of the fun you get in western countries, the vibe is different but it is far safer, people don't drink to nuke their brains out, and yes, there are pubs, mainly in tourist hubs... In Tunisia you will love Tunis, Nabeul, Djerba, Monastir... All places are living postcards. Cost of living is extremely good. Nice house near the coast is about $300/400 US for rent. Food is amazing.
    - cpursley 3y ago
      Thank you, out of those in Tunisia - what are the most walkable and safe with a young child?
oldpersonintx 3y ago
[dead]
spamizbad 3y ago
We've been underbuilding housing for quite a while in the United States. The GFC in 2008-2009 also spooked a bunch of people and convinced far too many people that another residential real estate crash was right around the corner. COVID happened and many people who were holding out lost their nerve and scrambled for housing, driving prices even higher. First time in my life where asset doomerism actually made something more expensive.
- toomuchtodo 3y ago
  https://www.fanniemae.com/research-and-insights/perspectives/us-housing-shortage https://www.fanniemae.com/research-and-insights/perspectives...
- cma 3y ago
  The US has one of the highest square footage per capita of housing in the world. So maybe less underbuilding and more of a misallocation of the square footage.
CalRobert 3y ago
So long as there are more home seekers than homes people will be in competition with their peers for homes. But maybe that's the idea? If people felt secure in their home then maybe they wouldn't work so hard, perhaps switch to a 4 (or 3!) day work week, maybe get more involved in their community, volunteering, advocacy, etc. And that would, presumably, be a disaster. We apparently need everybody working as hard as possible so that capital owners can take a share of our labour. It is hard not to feel like housing scarcity is the primary tool to keep everybody working at capacity, and all for the benefit of the few. Of course, when people shriek about capitalism they're usually imagining Scrooge McDuck or something, but in this case the beneficiaries are mostly old homeowners. And when it's your grandma saying "that's my nest egg!" about how great high home prices are, it's harder to fix the problem. Grandma wonders why her kids live 5,000 miles away, though. At least my kids' grandma does. For a few years I had a paid off house in the middle of Ireland. (The house was dirt cheap). Sadly it was not a great place for me to live - we did not get on well with the neighbours, among other things - but the feeling that I could tell my boss to go to hell and live for literally multiple years on a single income's worth of savings was powerful. We ended up moving to the Netherlands, which is much better for me overall (I have a lot more in common with the people here, and love biking!) but yet again I need to stress about mortgages, rent, etc. etc. and I miss the freedom I had.
- azinman2 3y ago
  Are you suggesting some great conspiracy with developers and banks to make less money on purpose by fixing supply in order to have a working style that hypothetically benefits a few unrelated people?
  - CalRobert 3y ago
    No, I think that homeowners largely have the ability to make it illegal to build new homes near them, which makes them wealthier. Sometimes it's for reasons like noise, parking, etc. (though I don't really think "it's illegal for you to build a home here because I like free street parking" is moral, but that's another matter), but sometimes it's because new homes - especially apartments - are likely to reduce the cost of housing (aka "bring down my home's value"). If you own a home, you want as many people working as hard as they can to outbid each other when you sell.
the_snooze 3y ago
Is this a trend that's going up? It seems like the norm for the past several years (at least) is for a good chunk of Americans to live paycheck-to-paycheck [1] and not have much of a financial cushion [2]. There's just a lot of precarity out there, whether by choice or by circumstance. [1] https://www.npr.org/2020/12/16/941292021/paycheck-to-paycheck-nation-how-life-in-america-adds-up https://www.npr.org/2020/12/16/941292021/paycheck-to-paychec... [2] https://abcnews.go.com/US/10-americans-struggle-cover-400-emergency-expense-federal/story?id=63253846 https://abcnews.go.com/US/10-americans-struggle-cover-400-em...
- gamepsys 3y ago
  Have you ever noticed you never see anyone plot the percentage of Americans living paycheck-to-paycheck over time? It's because the number is surprising stable, and always too high.
  - westpfelia 3y ago
    citation that it is stable? Considering that pay has been flat since the mid 2000s, mortages/rent has skyrocketed, price of everyday goods has sky rocketed, and the debt bubble is getting bigger and bigger I find it hard to believe that line is flat.
    - gamepsys 3y ago
      2023: 62% of all Americans are living paycheck-to-paycheck https://www.cnbc.com/2023/10/31/62percent-of-americans-still-live-paycheck-to-paycheck-amid-inflation.html https://www.cnbc.com/2023/10/31/62percent-of-americans-still... 2017: 78% of all workers are living paycheck-to-paycheck https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.html https://www.cnbc.com/2017/08/24/most-americans-live-paycheck... 2012: 68% of all Americans are living paycheck-to-paycheck https://www.reuters.com/article/idUSBRE88I1BF/ https://www.reuters.com/article/idUSBRE88I1BF/
- adolph 3y ago
  What's the point of not living paycheck to paycheck if interest rates are low and inflation relatively high? Holding cash just wastes it. (Note: this is not my personal viewpoint and is not financial advice. It is asked to fairly portray a counterpoint which most people must hold, even if only implicitly.)
tocs3 3y ago
In, at least the area I live (Central Texas), property taxes are also a problem with home affordability. I got my tax assessment a couple days ago and it notes that the assessment is up 653.08% since 2019.
- cmmeur01 3y ago
  I mean where do you expect your services to come from if there is no state income tax?
  - ProllyInfamous 3y ago
    GA has both income tax and sales tax (and property taxes way less than Texas'...). A recent statewide proposal is considering capping home assessment increases at a set rate, pegged to inflation — until the house sells to a non-family owner. I think all three ideas are GREAT for Joe Average Georgian.
  - tocs3 3y ago
    Except, I am not getting 653% more service. Traffic is worse, roads are worse (except the brand new ones), crime is higher, schools are more crowded. No public water for me. It is admittedly the price of growth in the area (recently rural area). I understand that government and taxes are good, up to a point. The extra taxes are bringing more people in but not helping those who are already here.
- silverquiet 3y ago
  South Texas here and I have to say that the whole low-tax red state thing seems very oversold. We sure get the culture war stuff good and hard though (and even a few years ago I would have said that Texas was actually governed by the more pragmatic wing of the Republican party, but no more).
tayo42 3y ago
How does that opening quote about rates make sense? Rates go down people can afford bigger loans, prices should go up for the same loan payment.
- deleted 3y ago
  [deleted]
commandlinefan 3y ago
I bought in 2010, when interest rates were low, and my payments are almost comically low by 2024 standards. BUT - the taxes are going up so fast, they've almost caught up with the actual mortgage payment (I pay as much in tax & insurance as I do for the house payment itself), and there's no end in sight.
- taftster 3y ago
  Right, this is such an underappreciated problem. Buying a home doesn't "lock in" your monthly costs. It locks in the mortgage, sure. But it's very easy for your insurance and property tax rates to surpass any growing income. This is particularly bad for fixed-income folks, living in retirement. Congratulations, you've saved and scrimped to get your house paid off by retirement age, but rising property taxes are outstripping your social security income.
  - commandlinefan 3y ago
    Well, at least where I live, property taxes are capped once you hit 65, as long as you stay in one place. I'm a LONG way from 65, though (fortunately).
    - taftster 3y ago
      Oh, that's interesting. I didn't know that was even a thing. I need to look into that for retirement (some day way in the future)!
deleted 3y ago
[deleted]
adolph 3y ago
The most common sacrifice was taking no or fewer vacations. More than one-third of homeowners and renters (34.5%) who struggle to afford housing indicated that they skipped vacations in the past year in order to afford their monthly costs. This makes the headline verb "Struggle" seem overly dramatic.
Izkata 3y ago
For comparison, I think this usually floated around 20-30% in 2019 and earlier.
api 3y ago
I’m a very strong subscriber to the housing theory of everything. To summarize: most of the malaise in developed economies especially among the young is due to housing prices. A lot of the other issues we face including inflation in other areas is downstream of housing prices since expensive housing drives wage inflation. That wage inflation doesn’t end up benefiting the worker much though because it’s all eaten by housing. This bids up housing even more in a vicious cycle. A lot of social problems are also downstream of housing: alarmingly low birth rates, depression to some degree, the decline of in person socialization due to the death of “third spaces” (too expensive), parents and grandparents becoming a burden on the young because they can’t afford to live, etc. Failure to build sufficient housing to meet demand is literally destroying civilization. You can see this most clearly in certain cities like SF that have this disease worst of all, but it’s a problem everywhere.

49 points by okasaki 3y ago

[dead]

It's unfortunate how much people need to sacrifice to afford housing. And I dont know how else to read this except -- home prices will go down.

PKop 3y ago
That and/or rates
- game_the0ry 3y ago
  Why would the fed cut rates?
  - PKop 3y ago
    Short answer for why they would is the economy broadly can't sustain rates this high. But I think it's worth considering there are many that subscribe to the theory the Fed has almost no control over long term rates (mortgage rates being one type of these), which are set by the market alone based on inflation + growth expectations. [0] I think it is inevitable that issues like this thread and others whereby many businesses and individuals cannot cope with debt service (see record high credit card delinquency rates) [1] and inflation, along with near record low unemployment means economy will hit a brick wall and prices and rates will fall, regardless of what the Fed wants or does or says. This is already part of the reason long rates have been underneath short rates, as market has been pricing a slowdown for a while, and Fed wasn't able to set long rates above where they put short. Additionally, to the degree Fed can influence long rates at all, some would argue raising short rates very high very fast (yes of course to counter inflation) itself can depress long term growth thereby beyond some threshold lowering longer term rates if market expects lower growth. [0] https://medium.com/the-investors-handbook/why-the-fed-doesnt-control-long-term-interest-rates-5a132979419 https://medium.com/the-investors-handbook/why-the-fed-doesnt... [1] https://archive.is/s14dY https://archive.is/s14dY
    - game_the0ry 3y ago
      > Short answer for why they would is the economy broadly can't sustain rates this high. I disagree, but... Putting aside the fed and the degree they can set interest rates at the long end of the yield curve - what you are saying is that rates will go down bc the economy can't sustain the debt (in your words - "economy will hit a brick wall and prices and rates will fall"). In other words, there would be a recession bc interest rates are too high. By the time that recession hits, people will be losing job - people sell assets (houses + stocks) when they lose their jobs. In the event that the fed lowers rates, it will be bc of a recession, not to prevent one. By then, the damage is done.
      - PKop 3y ago
        Yea that's why I mentioned unemployment being so low now, nowhere to go but up, and once it does that will exacerbate recession. I do think Fed will lower because of recession yes. The damage will be done yes. It sounds like you do agree.
jncfhnb 3y ago
Seems like a terrible bet
- tigeroil 3y ago
  Indeed. Everyone I've spoken to seems to be convinced that clearly, something has to change, house prices must drop, but the reality is, there's too many people for too few houses, and unless that changes housing will always continue to become more expensive.
  - game_the0ry 3y ago
    > but the reality is, there's too many people for too few houses Not really... There are 2 big things that are skewing the housing market now: 1. In any given market, all-cash investors make up about 20-30% of the demand. [1] They will buy at almost any price. Even though they make a small percent of existing owners (iirc, its like 1-3%), they make an 20-30% portion of demand right now. 2. Inventory (houses that are for sale now, not just total stock) is at historical lows. This is bc of interest rates going higher - nobody who has 3-4% fixed rate locked in will sell (until they have to). The shortage that people refer to is not a shortage in homes that exist, its a shortage of homes for sale. Now imagine those 2 dynamics flipped the other way - what happens to prices then? Also food for thought - every market boom/bust cycle was caused speculative demand. What happens when 20-30% of demand goes away? More food for thought - the folks that feel like they are locked out of the market and have been screwed (the young) are growing increasingly resentful. How will they vote? [1] https://www.corelogic.com/intelligence/us-home-investor-share-reached-new-high-q4-2023/ https://www.corelogic.com/intelligence/us-home-investor-shar... [2] https://tradingeconomics.com/united-states/total-housing-inventory#:~:text=Total%20Housing%20Inventory%20in%20the%20United%20States%20averaged%202263.12%20Thousands,source%3A%20National%20Association%20of%20Realtors https://tradingeconomics.com/united-states/total-housing-inv...
    - jncfhnb 3y ago
      If interest rates plummet and people start purchasing houses that they can only afford due to cheap loans, I would expect home prices to… rise. As they did before.
acover 3y ago
It can always get worse. Lots of counties live with price to income ratio of 20. The USA is 6.
- game_the0ry 3y ago
  Indeed, I see you're point. We americans have been living beyond or means and much better relative to the rest of the world, and the world is starting to equalize. Makes sense.

TexanFeller 3y ago

> The most common sacrifice was taking no or fewer vacations. More than one-third of homeowners and renters (34.5%) who struggle to afford housing indicated that they skipped vacations in the past year in order to afford their monthly costs. Vacations, at least the kind where you travel somewhere, are the definition of luxuries. It's jarring to hear about skipping them adjacent to a paragraph about skipping meals. I went on only a handful of vacations growing up, all of them staycations or domestic road trips with some other reason for going there or with someone else paying.

swatcoder 3y ago
Yeah, lifestyle expectations have shifted dramatically and many people have become strongly attached to consumer luxuries and extravagences. If you watch or read older media (fiction or non), or if you lived through it, you regularly see even middle class and professional characters living with sparse conveniences in their home and going on exactly those sort of modest road trips and motel stays you talk about and many of us remember. Trips to faraway lands, were treated as a novelty that you might bucket list once or twice rather than an annual necessity. You didn't buy a new TV until the old one broke. You talked to your neighbors and borrowed each others tools. You ate out as a treat, not because you just didn't feel like cooking that day. You planned your grocery shopping around sales and strove not to deviate from the plan while at the store. And these expectations shifted for everyone, not just incoming generations. It wasn't a generational divide and I don't mean to stir up boomer/zoomer tension -- it was a dramatic cultural shift that almost everybody seems to have adopted without even noticing. Exagerrated consumerism and "we are all middle class on the inside" mentality was how the West distinguished itself from its Cold War villian and now we are where we are. Everybody needs an often-unattainable and generaly-unsustainable amount of money to fulfill a life that few would have taken seriously just a few decades earlier, and the essential dissonance is producing widespread misery and angst.
- babycheetahbite 3y ago
  Very well put. People simply don't recognize the standard of living they enjoy, because "everybody" has it.

spdustin 3y ago

I respectfully urge any commenters to consider that a good portion of us HN readers are in this 50%, despite living outside of the valley.

pelagicAustral 3y ago

I was on the verge of buying pre-Covid era. I was going to end up paying mortgage for 20/25 years. My plan was a small 2-bedroom bungalow, I was still considering then, that I was going to pay quite a lot for what I wanted... Covid happened, prices went to the roof and beyond... I'm not buying squat right now, no way... Prices remain just the same, it's funny when they go up they go all the way up as high as they can push it, when then come down you can't even feel they did. I'm scratching 40s and I think my new plan is to go somewhere else... save for the next decade and move to Northern Africa, which I love and have ties to... Retire there and work remotely, or teach or a combo of those... I hope it works, even if it doesn't beats the crap out of grinding my whole life for a small pod in the west.

cpursley 3y ago
I’d like to check out North Africa. Any suggestions on good cities (safe, clean, fast internet) with ocean access?
- pelagicAustral 3y ago
  Not going to lie here. It was shocking at first, the cultural clash was intense at first, and I was like a scared child wandering about... But afterwards I felt much more at home than at any other place I've lived before (including where I live now). People are very nice, they are gentle, sincere, humble and welcoming (in general). Just this is enough of a reason for me to move, really... I recommend Morocco or Tunisia. They have some amazing cities, and you will miss none of the fun you get in western countries, the vibe is different but it is far safer, people don't drink to nuke their brains out, and yes, there are pubs, mainly in tourist hubs... In Tunisia you will love Tunis, Nabeul, Djerba, Monastir... All places are living postcards. Cost of living is extremely good. Nice house near the coast is about $300/400 US for rent. Food is amazing.
  - cpursley 3y ago
    Thank you, out of those in Tunisia - what are the most walkable and safe with a young child?

oldpersonintx 3y ago

[dead]

spamizbad 3y ago

We've been underbuilding housing for quite a while in the United States. The GFC in 2008-2009 also spooked a bunch of people and convinced far too many people that another residential real estate crash was right around the corner. COVID happened and many people who were holding out lost their nerve and scrambled for housing, driving prices even higher. First time in my life where asset doomerism actually made something more expensive.

toomuchtodo 3y ago
https://www.fanniemae.com/research-and-insights/perspectives/us-housing-shortage https://www.fanniemae.com/research-and-insights/perspectives...
cma 3y ago
The US has one of the highest square footage per capita of housing in the world. So maybe less underbuilding and more of a misallocation of the square footage.

CalRobert 3y ago

So long as there are more home seekers than homes people will be in competition with their peers for homes. But maybe that's the idea? If people felt secure in their home then maybe they wouldn't work so hard, perhaps switch to a 4 (or 3!) day work week, maybe get more involved in their community, volunteering, advocacy, etc. And that would, presumably, be a disaster. We apparently need everybody working as hard as possible so that capital owners can take a share of our labour. It is hard not to feel like housing scarcity is the primary tool to keep everybody working at capacity, and all for the benefit of the few. Of course, when people shriek about capitalism they're usually imagining Scrooge McDuck or something, but in this case the beneficiaries are mostly old homeowners. And when it's your grandma saying "that's my nest egg!" about how great high home prices are, it's harder to fix the problem. Grandma wonders why her kids live 5,000 miles away, though. At least my kids' grandma does. For a few years I had a paid off house in the middle of Ireland. (The house was dirt cheap). Sadly it was not a great place for me to live - we did not get on well with the neighbours, among other things - but the feeling that I could tell my boss to go to hell and live for literally multiple years on a single income's worth of savings was powerful. We ended up moving to the Netherlands, which is much better for me overall (I have a lot more in common with the people here, and love biking!) but yet again I need to stress about mortgages, rent, etc. etc. and I miss the freedom I had.

azinman2 3y ago
Are you suggesting some great conspiracy with developers and banks to make less money on purpose by fixing supply in order to have a working style that hypothetically benefits a few unrelated people?
- CalRobert 3y ago
  No, I think that homeowners largely have the ability to make it illegal to build new homes near them, which makes them wealthier. Sometimes it's for reasons like noise, parking, etc. (though I don't really think "it's illegal for you to build a home here because I like free street parking" is moral, but that's another matter), but sometimes it's because new homes - especially apartments - are likely to reduce the cost of housing (aka "bring down my home's value"). If you own a home, you want as many people working as hard as they can to outbid each other when you sell.

the_snooze 3y ago

Is this a trend that's going up? It seems like the norm for the past several years (at least) is for a good chunk of Americans to live paycheck-to-paycheck [1] and not have much of a financial cushion [2]. There's just a lot of precarity out there, whether by choice or by circumstance. [1] https://www.npr.org/2020/12/16/941292021/paycheck-to-paycheck-nation-how-life-in-america-adds-up https://www.npr.org/2020/12/16/941292021/paycheck-to-paychec... [2] https://abcnews.go.com/US/10-americans-struggle-cover-400-emergency-expense-federal/story?id=63253846 https://abcnews.go.com/US/10-americans-struggle-cover-400-em...

gamepsys 3y ago
Have you ever noticed you never see anyone plot the percentage of Americans living paycheck-to-paycheck over time? It's because the number is surprising stable, and always too high.
- westpfelia 3y ago
  citation that it is stable? Considering that pay has been flat since the mid 2000s, mortages/rent has skyrocketed, price of everyday goods has sky rocketed, and the debt bubble is getting bigger and bigger I find it hard to believe that line is flat.
  - gamepsys 3y ago
    2023: 62% of all Americans are living paycheck-to-paycheck https://www.cnbc.com/2023/10/31/62percent-of-americans-still-live-paycheck-to-paycheck-amid-inflation.html https://www.cnbc.com/2023/10/31/62percent-of-americans-still... 2017: 78% of all workers are living paycheck-to-paycheck https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.html https://www.cnbc.com/2017/08/24/most-americans-live-paycheck... 2012: 68% of all Americans are living paycheck-to-paycheck https://www.reuters.com/article/idUSBRE88I1BF/ https://www.reuters.com/article/idUSBRE88I1BF/
adolph 3y ago
What's the point of not living paycheck to paycheck if interest rates are low and inflation relatively high? Holding cash just wastes it. (Note: this is not my personal viewpoint and is not financial advice. It is asked to fairly portray a counterpoint which most people must hold, even if only implicitly.)

tocs3 3y ago

In, at least the area I live (Central Texas), property taxes are also a problem with home affordability. I got my tax assessment a couple days ago and it notes that the assessment is up 653.08% since 2019.

cmmeur01 3y ago
I mean where do you expect your services to come from if there is no state income tax?
- ProllyInfamous 3y ago
  GA has both income tax and sales tax (and property taxes way less than Texas'...). A recent statewide proposal is considering capping home assessment increases at a set rate, pegged to inflation — until the house sells to a non-family owner. I think all three ideas are GREAT for Joe Average Georgian.
- tocs3 3y ago
  Except, I am not getting 653% more service. Traffic is worse, roads are worse (except the brand new ones), crime is higher, schools are more crowded. No public water for me. It is admittedly the price of growth in the area (recently rural area). I understand that government and taxes are good, up to a point. The extra taxes are bringing more people in but not helping those who are already here.
silverquiet 3y ago
South Texas here and I have to say that the whole low-tax red state thing seems very oversold. We sure get the culture war stuff good and hard though (and even a few years ago I would have said that Texas was actually governed by the more pragmatic wing of the Republican party, but no more).

tayo42 3y ago

How does that opening quote about rates make sense? Rates go down people can afford bigger loans, prices should go up for the same loan payment.

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commandlinefan 3y ago

I bought in 2010, when interest rates were low, and my payments are almost comically low by 2024 standards. BUT - the taxes are going up so fast, they've almost caught up with the actual mortgage payment (I pay as much in tax & insurance as I do for the house payment itself), and there's no end in sight.

taftster 3y ago
Right, this is such an underappreciated problem. Buying a home doesn't "lock in" your monthly costs. It locks in the mortgage, sure. But it's very easy for your insurance and property tax rates to surpass any growing income. This is particularly bad for fixed-income folks, living in retirement. Congratulations, you've saved and scrimped to get your house paid off by retirement age, but rising property taxes are outstripping your social security income.
- commandlinefan 3y ago
  Well, at least where I live, property taxes are capped once you hit 65, as long as you stay in one place. I'm a LONG way from 65, though (fortunately).
  - taftster 3y ago
    Oh, that's interesting. I didn't know that was even a thing. I need to look into that for retirement (some day way in the future)!

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adolph 3y ago

The most common sacrifice was taking no or fewer vacations. More than one-third of homeowners and renters (34.5%) who struggle to afford housing indicated that they skipped vacations in the past year in order to afford their monthly costs. This makes the headline verb "Struggle" seem overly dramatic.

Izkata 3y ago

For comparison, I think this usually floated around 20-30% in 2019 and earlier.

api 3y ago

I’m a very strong subscriber to the housing theory of everything. To summarize: most of the malaise in developed economies especially among the young is due to housing prices. A lot of the other issues we face including inflation in other areas is downstream of housing prices since expensive housing drives wage inflation. That wage inflation doesn’t end up benefiting the worker much though because it’s all eaten by housing. This bids up housing even more in a vicious cycle. A lot of social problems are also downstream of housing: alarmingly low birth rates, depression to some degree, the decline of in person socialization due to the death of “third spaces” (too expensive), parents and grandparents becoming a burden on the young because they can’t afford to live, etc. Failure to build sufficient housing to meet demand is literally destroying civilization. You can see this most clearly in certain cities like SF that have this disease worst of all, but it’s a problem everywhere.