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the housing/income ratio of the US is at an all time high: https://www.longtermtrends.net/home-price-median-annual-income-ratio/ https://www.longtermtrends.net

the housing/income ratio of the US is at an all time high: https://www.longtermtrends.net/home-price-median-annual-income-ratio/ https://www.longtermtrends.net/home-price-median-annual-inco...

randomdata 2y ago
Fairly low with respect to average personal income, though.
- DHPersonal 2y ago
  Average personal income of the entire population of the country, millionaires and billionaires included? If so, wouldn't that deeply skew the results?
  - randomdata 2y ago
    Skew in what way?
    - DHPersonal 2y ago
      > Skew in what way? https://introductorystats.wordpress.com/2011/09/04/when-bill-gates-walks-into-a-bar/ https://introductorystats.wordpress.com/2011/09/04/when-bill...
      - randomdata 2y ago
        Implying that Bill Gates buys a lot of real estate? That's probably true – he does have nearly 300,000 acres of farmland after all – but I'm not sure really answers the question.
  - nairboon 2y ago
    The chart says it's median income.
    - randomdata 2y ago
      The first chart is median household income, but the second chart is average personal income.
- recursivedoubts 2y ago
  second highest in history after the 2008 bubble?
  - randomdata 2y ago
    If you squint hard enough and believe there is no history before 1975, then sure, I guess.
bumby 2y ago
Now do it adjusted for housing size. Part of my point is that we want much much larger houses on average now than in the past, which skews the comparison. If the average car was a manual hatchback 40 years ago and now the average is a huge SUV, comparing the absolute costs neglects the impact that the change in preference has on the cost. It assumes preferences are constant but the data shows they are not.
- rchaud 2y ago
  Housing size is irrelevant because home builders aren't going to go below a minimum amount of square footage as a lot of the costs are fixed.
  - bumby 2y ago
    It's not irrelevant if housing size is a driver of cost. Material is still one of the primary costs, generally above labor. But again, in more rare areas like SV, that general rule is distorted which is why it's not a good comparison for the nation as a whole. Even conceding that there is minimum size for a builder, why is that minimum size increasing when manufacturability is also increasing? If home building is getting more efficient, you'd expect that minimum viable size to go down. Maybe labor costs have gone up? If so, I don't know if that is a net negative for society.
    - recursivedoubts 2y ago
      What data would convince you that housing is too expensive relative to income to the point of being a social negative?
      - bumby 2y ago
        I would like to see it as a proportion of overall necessities (e.g., compared to percentage of income for food, healthcare, etc.) and controlled for relevant variables like size. E.g., if housing in 1960 was 25% of median household income and averaged 1500 sqft and housing in 2024 was 40% and averaged 3000 sqft, that doesn't immediately appear to me that the problem is housing affordability, but rather housing expectations. In other words, a change in preference leads the change in cost. Similarly if housing went up 10% of total income, but food went down 15% of total income, it doesn't necessarily mean the overall situation is less affordable. The main aspect that's "new" now seems (at a casual glance) to be the amount of student debt being carried now compared to previous generations. Even with that, if you look at real disposable income per capita, it seems to be going up over the last few decades (ignoring the anomalous COVID years).

the housing/income ratio of the US is at an all time high: https://www.longtermtrends.net/home-price-median-annual-income-ratio/ https://www.longtermtrends.net/home-price-median-annual-inco...

randomdata 2y ago

Fairly low with respect to average personal income, though.

DHPersonal 2y ago
Average personal income of the entire population of the country, millionaires and billionaires included? If so, wouldn't that deeply skew the results?
- randomdata 2y ago
  Skew in what way?
  - DHPersonal 2y ago
    > Skew in what way? https://introductorystats.wordpress.com/2011/09/04/when-bill-gates-walks-into-a-bar/ https://introductorystats.wordpress.com/2011/09/04/when-bill...
    - randomdata 2y ago
      Implying that Bill Gates buys a lot of real estate? That's probably true – he does have nearly 300,000 acres of farmland after all – but I'm not sure really answers the question.
- nairboon 2y ago
  The chart says it's median income.
  - randomdata 2y ago
    The first chart is median household income, but the second chart is average personal income.
recursivedoubts 2y ago
second highest in history after the 2008 bubble?
- randomdata 2y ago
  If you squint hard enough and believe there is no history before 1975, then sure, I guess.

bumby 2y ago

Now do it adjusted for housing size. Part of my point is that we want much much larger houses on average now than in the past, which skews the comparison. If the average car was a manual hatchback 40 years ago and now the average is a huge SUV, comparing the absolute costs neglects the impact that the change in preference has on the cost. It assumes preferences are constant but the data shows they are not.

rchaud 2y ago
Housing size is irrelevant because home builders aren't going to go below a minimum amount of square footage as a lot of the costs are fixed.
- bumby 2y ago
  It's not irrelevant if housing size is a driver of cost. Material is still one of the primary costs, generally above labor. But again, in more rare areas like SV, that general rule is distorted which is why it's not a good comparison for the nation as a whole. Even conceding that there is minimum size for a builder, why is that minimum size increasing when manufacturability is also increasing? If home building is getting more efficient, you'd expect that minimum viable size to go down. Maybe labor costs have gone up? If so, I don't know if that is a net negative for society.
  - recursivedoubts 2y ago
    What data would convince you that housing is too expensive relative to income to the point of being a social negative?
    - bumby 2y ago
      I would like to see it as a proportion of overall necessities (e.g., compared to percentage of income for food, healthcare, etc.) and controlled for relevant variables like size. E.g., if housing in 1960 was 25% of median household income and averaged 1500 sqft and housing in 2024 was 40% and averaged 3000 sqft, that doesn't immediately appear to me that the problem is housing affordability, but rather housing expectations. In other words, a change in preference leads the change in cost. Similarly if housing went up 10% of total income, but food went down 15% of total income, it doesn't necessarily mean the overall situation is less affordable. The main aspect that's "new" now seems (at a casual glance) to be the amount of student debt being carried now compared to previous generations. Even with that, if you look at real disposable income per capita, it seems to be going up over the last few decades (ignoring the anomalous COVID years).