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The current housing costs (price + interest rate) just seem so out of line with the average household income it boggles my mind it hasn't cooled alot more alrea

The current housing costs (price + interest rate) just seem so out of line with the average household income it boggles my mind it hasn't cooled alot more already. At $84k average household income, assuming 1/3 going to a mortgage would give you $2.3k a month to work with. At 6% interest rate, assuming 20% down payment of $70k, you can just manage a $350k home and that is ignoring taxes, not adding other closing costs, not considering utilities, assuming an interest rate on the lower side and assuming a 20% deposit. Add tax and that gives you around $1.7k to work with. Assume only putting down 10% and adding in $400 a month to cover utilities then you can manage around $175k home. That rules out buying a house in alot of the US. And yes, households in more expensive areas make more but if you are buying the average house, that costs $410k you need to be making like double the national average income to stick to the 1/3 rule. How many households are earning $170k where houses are $410k? Are people just devoting 50%+ of their income to housing? Everyone buying a house with the help of mom and dad? I just really don't get it.

ninininino 10mo ago
Look up the median age of a home buyer in 2025: It's 59 years old lol. Boomers and institutional money are doing the home buying. https://www.apolloacademy.com/median-age-of-all-us-homebuyers-59-years/ https://www.apolloacademy.com/median-age-of-all-us-homebuyer... In 2009 the same chart shows that the median age was 39. In the early 80s it was early 30s. Look at congress, we live in a boomer gerontocracy. Not every boomer is wealthy and powerful, but the majority of people who are wealthy and powerful are either descendants of elites/wealthy, boomers, or a very small fraction of younger tech/finance/business owners. The good news is - assuming there's not a big change in immigration rates - if you can rent cheaply enough for 10-20 years the boomers will start dying in sufficient numbers that if there is somehow no reversion on home prices in the mean time there should be insufficient buyers at that point and prices will eventually fall.
- dragonwriter 10mo ago
  59 year olds were born in 1966, so the average homebuyer is from Gen X, not a Boomer.
  - rpcope1 10mo ago
    I wonder if the distribution of ages for home buyers is not a normal distribution and maybe the median and standard deviations might tell us something more here. Regardless it's concerning that the average and likely median age has shot up that much.
    - dragonwriter 10mo ago
      Well, since 1980, the median age in the population has also increased by about a decade, which is a significant (but not a majority) contributor to this.
  - motbus3 10mo ago
    I'm sure Ol' John is no player when we compare how much investment funds have being pushing to buy homes. Around here, you can't even bid for a small apartment. They get sold to the folks before they start. Paying flat taxes on hundreds of properties doesnt make sense. They don't contribute to generate more jobs. They just replace the buyer and charge extra money that could have be reverted to other expenses that would create a healthier economy by diversity.
- ramesh31 10mo ago
  >"if you can rent cheaply enough for 10-20 years the boomers will start dying in sufficient numbers that if there is somehow no reversion on home prices in the mean time there should be insufficient buyers at that point and prices will eventually fall" But that "10-20 years" is your life, and there's no getting it back. Millennials (the largest generation in US history) have entered into our prime family starting age, and the fact that most are priced out of the housing market right now and stuck renting apartments is a complete tragedy. At a 90th percentile income, I can just barely be able to afford a home and provide for a family of 3-4 like our parents and grandparents did on a highschool education with no higher skills.
  - rpcope1 10mo ago
    Yeah, it definitely feels like the TFR crisis where the actual problems won't show up until it's too late and we're basically turbofucked.
  - brailsafe 10mo ago
    > most are priced out of the housing market right now and stuck renting apartments is a complete tragedy It absolutely is, but as one of those myself, I just refuse to even attempt to pay their prices and will make the best of life while renting and doing other things, not having kids, not owning property unless the ratio changes dramatically. Owning at most a tiny condo for half a million where I live, or moving to the boonies to own marginally more for less is simply not appealing to me, it doesn't unlock anything but a vague sense of security and a shit ton of liability. I hope more people choose the same until the working age tranch of purchasing power isn't as available as they'd like and prices have to drop. It's a major issue, but maybe I should be thankful I never adopted the boomer/genx dreams of owning a place and having a family or whatever. It's something I'm morbidly watching from the sidelines for now (in my early-mid thirties), but there are no circumstances except a miracle side hustle that could create the circumstances for me to actually pursue a mortgage on a place in my city.
    - ramesh31 10mo ago
      >"I hope more people choose the same until the working age tranch of purchasing power isn't as available as they'd like and prices have to drop." You just have to remember and keep in mind that the game is rigged. Housing is far from being a completely free market in this country. The structural political forces entrenched in maintaining home prices is second to none, from the top federal level all the way down to city councils, in a completely bipartisan way. The crisis of '08 was a generational event that we're not likely to see again in our lifetimes. Flattening and dips for sure, but a crash will not be allowed to happen; they'll just print enough to fix it, and leave the burden of inflation to anyone not owning assets.
- zeroonetwothree 10mo ago
  This is all home buyers not first time home buyers. So it’s not clear what we can conclude. It could be that more retirees are buying a house to retire to rather than renting. I imagine age of first time home buyers has also gone up but there’s no way it’s that high.
  - darth_avocado 10mo ago
    First time home buyers is up to 40. Not as bad as 59 but not great either. https://www.nar.realtor/newsroom/first-time-home-buyer-share-falls-to-historic-low-of-21-median-age-rises-to-40 https://www.nar.realtor/newsroom/first-time-home-buyer-share...
- nitwit005 10mo ago
  > The good news is - assuming there's not a big change in immigration rates There has been a big change in projected immigration rates: https://www.cbo.gov/publication/61735 https://www.cbo.gov/publication/61735
  - ethbr1 10mo ago
    That looks great, for everyone who knows how the US is funded.
- lisbbb 10mo ago
  59 is really early Gen-X. The Boomers are all in their 60s and 70s now. They're downsizing.
  - potato3732842 10mo ago
    They're not downsizing. They're buying smaller houses and renting their current ones.
- bdavisx 10mo ago
  >if you can rent cheaply enough for 10-20 years the boomers will start dying in sufficient numbers that if there is somehow no reversion on home prices in the mean time there should be insufficient buyers at that point and prices will eventually fall. You may be missing something - there's so much money flowing upwards in society that the rich/ultra-rich will simply be able to buy ALL of that real estate as it becomes available. If not ALL, then everything that's desirable.
sharpy 10mo ago
Probably a lot of private equity buying up homes to generate rental income? Usually, I am more pro market, but I think there needs to be some regulations on this. Although if you are an existing homeowner with low interest rate locked in, you probably want more private equity investments to drive up your property value...
- bojangleslover 10mo ago
  This myth needs to die. PE does not own that many homes. There was a small period in early COVID where interest rates were lower than cap rates. During this time PE, along with the investment market in general, invested in real estate including SFRs. That is no longer the case. It's a great boogeyman but trust me, having worked in the industry, institutional investors own less than 5% of SFRs. Real estate investing in general went bananas during COVID (plenty of non-PE buyers as well) because it's one of the only ways the average citizen can access that amount of leverage.
  - impossiblefork 10mo ago
    They might not own that many, but in 2025 it was 1/3 of the sold residencies. You only need a little bit of extra demand to have an enormous effect on prices.
    - bojangleslover 10mo ago
      Where did you read that?
- loglog 10mo ago
  "Private equity generating rental income" is a lie fed you by the rich lobby. The real reason (everywhere in US and Europe) is zoning, which is a subsidy to the owners of existing buildings at the cost of everyone else.
  - ambicapter 10mo ago
    And who owns those buildings?
JoeOfTexas 10mo ago
Internet + Natural Gas + Light + Water + Home Insurance + Auto Insurance + Property Tax + Phone + Home Security + Car Gas + Credit Cards A $350k mortgage with bills, is expensive. Will eat up a whole check if you don't make more than $140k/year.
- motbus3 10mo ago
  You'll own nothing. And you will be happy (using pills and medicines) They were quite serious about destroying society as-is. Nobody took them serious
  - Etheryte 10mo ago
    Who is "they" in this context?
    - phendrenad2 10mo ago
      It's a big club and you ain't in it.
    - johnny-g-tyler 10mo ago
      [flagged]
    - matthewrobertso 10mo ago
      The World Economic Forum is famous for saying people will own nothing by 2030 and be happy. https://en.wikipedia.org/wiki/You%27ll_own_nothing_and_be_happy https://en.wikipedia.org/wiki/You%27ll_own_nothing_and_be_ha...
      - Nursie 10mo ago
        The essay was a thought experiment based around the popularity of the so-called "sharing economy" at the time, not a WEF strategy document and certainly no government's policy. Even the author of the piece said it was not a description of her vision of the future, but intended to start a discussion about technology. But it's been picked up by wackaloons around the world as part of some overarching conspiracy theory.
bdcravens 10mo ago
While $84k is the average household income in the US, the average among home owners is a bit higher, around $100k-$120k. Also, very high prices really skew averages. Many "starter homes" are closer to $200k. I bought new 3 years ago, and the rent home I lived in prior, which was in an older middle class neighborhood in a Houston suburb, sold for $224k (and this included some basic renovations like new flooring)
- ashtonianthedev 10mo ago
  Just want to comment, I think if you were to overlay where people work vs live, most people probably do not have reasonable access to housing @ 225k. Also I think much of this problem is zoning, which coincidentally Houston has none and has some of the lowest housing costs in the nation, especially for a city of its size. I suspect much of the housing crisis on the west coast is because of poor zoning laws and could be fixed with a stroke of a pen, at the expense of the local housing market value.
  - ethbr1 10mo ago
    On the location vs price front, I think that's a bit of a red herring. Because people generally want to live close to their jobs. If cities have a lot of demand, it's partly because they have a lot of jobs, which means that the price of housing in cities relative to income is still an important metric. Viewed by holding more of those things constant, the urban medianHousePrice : medianIncome is how much of people's lives we're requiring they dedicate in order to have a roof over their heads.
- jghn 10mo ago
  We should be using medians, not means for bot hate income and house prices.
zeroonetwothree 10mo ago
The average homeowner household makes more than the average. Many people are not homeowners. For example if you are 22 and just started your first job you are included in the statistics but I think we wouldn’t really expect it to be affordable to become a homeowner (nor would it be desirable from a labor mobility standpoint). And many people prefer renting somewhere like Manhattan to buying in Topeka. So it doesn’t make sense to assume everyone wants to buy a house. I know several millionaires that rent. It would be better to compare overall cost of housing to income.
darth_avocado 10mo ago
> assuming 1/3 going to a mortgage would give you $2.3k a month to work with That’s the problem right there. Even if you’re locked in on the historically low sub 3% mortgages, there is a chance you’re spending more than 1/3 of your income on housing. People with higher rates and people who are renting, spend a lot more than 1/3 of their income on housing. I know finance influencers and older generations keep talking about 1/3 income on housing, but that hasn’t been a thing for a while now. Even before the pandemic surge in housing costs, 1/3 on housing was dream in most cities across the country.
- FireBeyond 10mo ago
  Sure but also I believe that the upper limit for most mortgage servicers is around 41, maybe 43% (one of those two, cannot remember which, or at least it was 4y ago).
  - darth_avocado 10mo ago
    There’s no limits per se. 43% is what they “prefer”. More recently with the low demand for mortgages, that number is more flexible. And all of this is on Gross Income and not net. So you could in theory be spending more than 50% of your net income on mortgage alone. If you want to consider “housing” costs, the number would be lot higher.
  - toshinoriyagi 10mo ago
    I bought a year ago and my max lending amounts were around 45-50% of my gross salary.
- Swizec 10mo ago
  > there is a chance you’re spending more than 1/3 of your income on housing. People with higher rates and people who are renting, spend a lot more than 1/3 of their income on housing. We live in San Francisco and pay rent at about 15% of combined gross income. I think people really underestimate the value of renting.
  - 10mo ago
averageRoyalty 10mo ago
$1700 per month pays off a $350k loan in 17 years, does it not? That's assuming that the household income stays static over that time. That is very reasonable. In Australia, 35 year mortgages are normal, and 25-30 year mortgages were normal 20 years ago. Why would your household income need to be 1/4 of the cost of the house to make it work?
- zdragnar 10mo ago
  The payment is set up such that the interest is amortized over the life of the loan, so your earliest payments are almost all going to interest and the latest payments are mostly the principle. This looks like a standard 30 year loan. If 100% of the 1700 went to principle and the was no interest then yeah, your 17 years works out, but then the bank makes no money.
- c22 10mo ago
  Do mortgages in Australia not have interest?
- jlokier 10mo ago
  > $1700 per month pays off a $350k loan in 17 years, does it not? No, it does not. You forgot the interest. Let's call it 6%, close to the current US average. The interest by itself comes to more than $1700 a month! Paying $1700 per month, you'll never pay off $350k, even with a 1000 year mortgage. To pay in 17 years, you'd need to pay $2741 (plus fees) per month. Most of that will be interest at first, but it tapers down. If you want to start out not paying mostly interest, you'll need to pay at least $3500 (plus fees) per month.
  - klipklop 10mo ago
    It's scary that you even have to explain this to another adult.
    - ethbr1 10mo ago
      Yes and no. A lot of people have gaps in their financial education. That said, mortgages aren't rocket science. 1. Assume at the end of the day you want the homeowner to be paying a stable monthly amount*. 2. In order to get there, you have {loan term}, {interest rate}, and {loan amount} as primary variables. 3. Assuming {loan term} and {interest rate} are constant (in a given mortgage market, at a given time), that leaves {loan amount} as the only variable. So how do you get a constant monthly payment for a variety of {loan amounts}? 4. You add up all the interest that would be owed over the entire {loan term}, using {interest rate}, then divide each monthly payment into some proportion of {interest payment} and {principle payment}. 5. You also front-weight the interest payments, because at that time there's more outstanding total loan (versus at the end of the loan term, when only a little principle remains to be paid back).* * Not super complicated. Yes, there's compound math, but conceptually simple. * For some definition of stable, even if it readjusts on some schedule * * Point in time interest pricing like this also makes future recalculation for over/underpayments easier, as you're essentially trued-up on interest payments at all times
mikestew 10mo ago
...to stick to the 1/3 rule. When did that become the rule? Why, back in my day, 25% was the max amount recommended to spend on housing. Though that was also back when no one would even think of taking out a 72 month car loan. Maybe one of those new 60 month loans, if you just don't have the money, otherwise stick to 36 months. And like you, I just don't get it. 1/3 on the house, whatever percentage comes out for the $40K car @ 72 months (granted, one doesn't need to buy new), where's this money coming from? We live in Redmond (WA), and I'm at a loss as to how there are so many newer Teslas parked in >$1MM houses. C'mon, there's only so many of those $500K total comp jobs to go around.
- lisbbb 10mo ago
  New car prices are now simply outrageous. Auto makers need to start ditching features and get their unit costs back down.
  - omosubi 10mo ago
    what features in entry level cars do you suggest they get rid of?
    - ethbr1 10mo ago
      Ultrasonics, eye monitors, electronic locks, self-contained infotainment systems (just a screen and the interfaces for a phone would be fine), lane keeping, auto-braking
      - dzhiurgis 10mo ago
        All of these are required by law
        RandomBacon 10mo ago
        Source? Considering that not all cars for sale have all of those features, I'm pretty confident in saying that you're wrong. Back-up cameras are required by law, so that requires a screen, but the law does not require that screen do double-duty as an infotainment screen.
crooked-v 10mo ago
Housing costs in the US can be out of line with average income because there isn't enough housing. Sellers only have to compete for the top X% of incomes.
jimnotgym 10mo ago
In the UK it seems more about the super wealthy buying up houses to rent them out. Incomes don't appear to be the biggest factor at all, more about concentration of wealth
hedora 10mo ago
We’re paying Cal FAIR about 10% the value of our house per year, despite having best possible fire safety for come construction and the area surrounding the house. So, in your example, thats 175/10/12 = 1.5K per month, leaving $200 for the mortgage. So, $175K is unrealistic. In related news, Cal FAIR is lobbying for a 60% increase in rates this year, because, apparently 16% of rural houses in California burn down each year (it’s either that, or they’re unbelievably corrupt/incompetent, since they’re somehow losing money). Note that people in flood planes (much of the cities) have similar issues.
missedthecue 10mo ago
A lot of people get help from mom and dad, but if you're already a homeowner, the home youre sitting on has appreciated too, so you can role equity into your next purchase. Not everyone is starting from zero. There are so many homeowners who would not be able to afford the home they're currently in, but are sitting on $500k of equity they can role into their next place.
aidenn0 10mo ago
If there are N houses available in the bay area and FAANG hires a total of more than N people from outside the bay area at a median $X/year, then the median cost of a house will be more than the most house that someone making $X/year can afford.
nunez 10mo ago
The taxes are important though. You'll "pay" for that monthly through your escrow account (or you'll save up for it in a HYSA or something, though personally I'd rather have my lender deal with the city and estimating next year's increases). With taxes included, that $1800 mortgage can easily become $2600-$2800/month --- $33,600/year --- in a high-property tax state (like many of the states that don't have income tax, which are where many of the cheap homes are). For that to be 30% of your _net_ income, you'll need to clear $112k/year _post-tax_, which is $373k/yr HHI pre-tax assuming 35% of those go to federal, state and FICA. You'll "only" need $112k/yr HHI if, like lenders, you're assuming that this will be 30% of your gross income. However, if we assume net is 65% of gross, then this mortgage is 46% of your net income. I know that a lot of people carry that risk, but that's a little high for my comfort level. As for: > Are people just devoting 50%+ of their income to housing? Everyone buying a house with the help of mom and dad? I just really don't get it. Like almost everyone else that didn't have Mom and Dad angel investors, we got insanely lucky. I had two really good years financially during which time I was able to save enough to hit our 20% down and then some. We were also lucky with our current situation, as our landlord was willing to extend our lease without increasing the rent and the place we were renting was pretty sweet.
LandR 10mo ago
1/3 to mortgage is crazy to me. My mortgage is around 6% of my gross, and just under 10% of my net and I feel that's high / stressful to me. I want to get it paid off ASAP.
- solumunus 10mo ago
  You’re certainly unusually hyper anxious about this.
  - LandR 10mo ago
    Probably. I did find it quite tough for a lot of years to treat myself, as I would try to save as much as I can to have a safety net. But even now with a safety net in the bank, I still have in the back of my head if I purchase something that is x mortgage payments, and I could save that instead to have in the bank in case I lose my job.
altairprime 10mo ago
If you think of it as a homeowner debt subsidy, that forces a higher percentage of the country into recurring-revenue rentals, that provides an adverse incentive against correcting home prices for income. Right now the consumer debt that’s substituting for wage increases hinges on the middle class being able to access lines of credit; one very popular LOC is home mortgages. If home values are allowed to fall to the level predicted by median wages, that could trigger a massive wave of defaults and bankruptcies as existing loans go underwater, homeowners have their lines of credit shorn, and then start missing mortgage payments and file for bankruptcy. U.S. mortgage loans for 1-4 bedroom properties are currently $14.5 trillion USD; for comparison, U.S. GDP is around $31 trillion USD. So if 10% of homeowners default or discharge their mortgage debts due to home prices collapsing to realistic levels, U.S. GDP drops 5% that year (not accounting for the loss of interest the banks would’ve recorded to GDP as production output for up to decades). Median household wages for homeowners is $86k, well below the $120-140k threshold recently discussed, supporting the government estimates that 30% of homeowners have difficulty making payments on their homes. So, if those 30% went bankrupt over a home prices crash, there’s a plausible threat of a 15% collapse in GDP (compared to Covid, which was around 10%). Relative to that, I don’t think economic policy is likely to prioritize new home ownership, not when a catastrophic reversal of years of GDP gain is a material risk. It would be a different story in a first world country, I expect, but here trying to reset home prices would just result in a massive rent costs spike (the U.S. free market tends not to build median-wages housing if it can avoid it) and a notable fraction of those households becoming homeless, while they watch as other families benefit from the price correction’s devastation by buying up their home at auction. The best that policy can do with the restrictions the U.S. government places on itself is to issue federal funding to regional governments to build median-price housing — and since much of that funding would go to regions explicitly hostile to current U.S. leadership, that is extremely unlikely to be passed by Congress.
tedggh 10mo ago
Usually you don’t buy a whole house when you are 25. You start with a small unit. My first condo was 700 sf which I sold for a good profit and use the money to pay for a bigger condo, about double the size. I then combined the profit of the second home with my wife’s profit from her house which was also small and together we got our first nice house just outside the city, about 15 min commute. We paid around 220 $/sf compared to 600 $/sf for a similar home in the city. Our house is 3X the size of the house I grew up in with my parents and 3 siblings, which was standard size for a middle income American family in the 80s. Not to mention the quality and amenities of our house is so much better than a house from the 80s. Yes houses are a lot more expensive today but only if you are buying in busy urban areas. If you dare to look in the suburbs you’ll find great homes which by square footage have not increased that much in the past 30-40 years after adjusting for inflation. In the city you are competing with everyone else wanting to be able to walk to their favorite brunch place. Cities also have crazy regulations that prevent building affordable homes.

ninininino 10mo ago

Look up the median age of a home buyer in 2025: It's 59 years old lol. Boomers and institutional money are doing the home buying. https://www.apolloacademy.com/median-age-of-all-us-homebuyers-59-years/ https://www.apolloacademy.com/median-age-of-all-us-homebuyer... In 2009 the same chart shows that the median age was 39. In the early 80s it was early 30s. Look at congress, we live in a boomer gerontocracy. Not every boomer is wealthy and powerful, but the majority of people who are wealthy and powerful are either descendants of elites/wealthy, boomers, or a very small fraction of younger tech/finance/business owners. The good news is - assuming there's not a big change in immigration rates - if you can rent cheaply enough for 10-20 years the boomers will start dying in sufficient numbers that if there is somehow no reversion on home prices in the mean time there should be insufficient buyers at that point and prices will eventually fall.

dragonwriter 10mo ago
59 year olds were born in 1966, so the average homebuyer is from Gen X, not a Boomer.
- rpcope1 10mo ago
  I wonder if the distribution of ages for home buyers is not a normal distribution and maybe the median and standard deviations might tell us something more here. Regardless it's concerning that the average and likely median age has shot up that much.
  - dragonwriter 10mo ago
    Well, since 1980, the median age in the population has also increased by about a decade, which is a significant (but not a majority) contributor to this.
- motbus3 10mo ago
  I'm sure Ol' John is no player when we compare how much investment funds have being pushing to buy homes. Around here, you can't even bid for a small apartment. They get sold to the folks before they start. Paying flat taxes on hundreds of properties doesnt make sense. They don't contribute to generate more jobs. They just replace the buyer and charge extra money that could have be reverted to other expenses that would create a healthier economy by diversity.
ramesh31 10mo ago
>"if you can rent cheaply enough for 10-20 years the boomers will start dying in sufficient numbers that if there is somehow no reversion on home prices in the mean time there should be insufficient buyers at that point and prices will eventually fall" But that "10-20 years" is your life, and there's no getting it back. Millennials (the largest generation in US history) have entered into our prime family starting age, and the fact that most are priced out of the housing market right now and stuck renting apartments is a complete tragedy. At a 90th percentile income, I can just barely be able to afford a home and provide for a family of 3-4 like our parents and grandparents did on a highschool education with no higher skills.
- rpcope1 10mo ago
  Yeah, it definitely feels like the TFR crisis where the actual problems won't show up until it's too late and we're basically turbofucked.
- brailsafe 10mo ago
  > most are priced out of the housing market right now and stuck renting apartments is a complete tragedy It absolutely is, but as one of those myself, I just refuse to even attempt to pay their prices and will make the best of life while renting and doing other things, not having kids, not owning property unless the ratio changes dramatically. Owning at most a tiny condo for half a million where I live, or moving to the boonies to own marginally more for less is simply not appealing to me, it doesn't unlock anything but a vague sense of security and a shit ton of liability. I hope more people choose the same until the working age tranch of purchasing power isn't as available as they'd like and prices have to drop. It's a major issue, but maybe I should be thankful I never adopted the boomer/genx dreams of owning a place and having a family or whatever. It's something I'm morbidly watching from the sidelines for now (in my early-mid thirties), but there are no circumstances except a miracle side hustle that could create the circumstances for me to actually pursue a mortgage on a place in my city.
  - ramesh31 10mo ago
    >"I hope more people choose the same until the working age tranch of purchasing power isn't as available as they'd like and prices have to drop." You just have to remember and keep in mind that the game is rigged. Housing is far from being a completely free market in this country. The structural political forces entrenched in maintaining home prices is second to none, from the top federal level all the way down to city councils, in a completely bipartisan way. The crisis of '08 was a generational event that we're not likely to see again in our lifetimes. Flattening and dips for sure, but a crash will not be allowed to happen; they'll just print enough to fix it, and leave the burden of inflation to anyone not owning assets.
zeroonetwothree 10mo ago
This is all home buyers not first time home buyers. So it’s not clear what we can conclude. It could be that more retirees are buying a house to retire to rather than renting. I imagine age of first time home buyers has also gone up but there’s no way it’s that high.
- darth_avocado 10mo ago
  First time home buyers is up to 40. Not as bad as 59 but not great either. https://www.nar.realtor/newsroom/first-time-home-buyer-share-falls-to-historic-low-of-21-median-age-rises-to-40 https://www.nar.realtor/newsroom/first-time-home-buyer-share...
nitwit005 10mo ago
> The good news is - assuming there's not a big change in immigration rates There has been a big change in projected immigration rates: https://www.cbo.gov/publication/61735 https://www.cbo.gov/publication/61735
- ethbr1 10mo ago
  That looks great, for everyone who knows how the US is funded.
lisbbb 10mo ago
59 is really early Gen-X. The Boomers are all in their 60s and 70s now. They're downsizing.
- potato3732842 10mo ago
  They're not downsizing. They're buying smaller houses and renting their current ones.
bdavisx 10mo ago
>if you can rent cheaply enough for 10-20 years the boomers will start dying in sufficient numbers that if there is somehow no reversion on home prices in the mean time there should be insufficient buyers at that point and prices will eventually fall. You may be missing something - there's so much money flowing upwards in society that the rich/ultra-rich will simply be able to buy ALL of that real estate as it becomes available. If not ALL, then everything that's desirable.

sharpy 10mo ago

Probably a lot of private equity buying up homes to generate rental income? Usually, I am more pro market, but I think there needs to be some regulations on this. Although if you are an existing homeowner with low interest rate locked in, you probably want more private equity investments to drive up your property value...

bojangleslover 10mo ago
This myth needs to die. PE does not own that many homes. There was a small period in early COVID where interest rates were lower than cap rates. During this time PE, along with the investment market in general, invested in real estate including SFRs. That is no longer the case. It's a great boogeyman but trust me, having worked in the industry, institutional investors own less than 5% of SFRs. Real estate investing in general went bananas during COVID (plenty of non-PE buyers as well) because it's one of the only ways the average citizen can access that amount of leverage.
- impossiblefork 10mo ago
  They might not own that many, but in 2025 it was 1/3 of the sold residencies. You only need a little bit of extra demand to have an enormous effect on prices.
  - bojangleslover 10mo ago
    Where did you read that?
loglog 10mo ago
"Private equity generating rental income" is a lie fed you by the rich lobby. The real reason (everywhere in US and Europe) is zoning, which is a subsidy to the owners of existing buildings at the cost of everyone else.
- ambicapter 10mo ago
  And who owns those buildings?

JoeOfTexas 10mo ago

Internet + Natural Gas + Light + Water + Home Insurance + Auto Insurance + Property Tax + Phone + Home Security + Car Gas + Credit Cards A $350k mortgage with bills, is expensive. Will eat up a whole check if you don't make more than $140k/year.

motbus3 10mo ago
You'll own nothing. And you will be happy (using pills and medicines) They were quite serious about destroying society as-is. Nobody took them serious
- Etheryte 10mo ago
  Who is "they" in this context?
  - phendrenad2 10mo ago
    It's a big club and you ain't in it.
  - johnny-g-tyler 10mo ago
    [flagged]
  - matthewrobertso 10mo ago
    The World Economic Forum is famous for saying people will own nothing by 2030 and be happy. https://en.wikipedia.org/wiki/You%27ll_own_nothing_and_be_happy https://en.wikipedia.org/wiki/You%27ll_own_nothing_and_be_ha...
    - Nursie 10mo ago
      The essay was a thought experiment based around the popularity of the so-called "sharing economy" at the time, not a WEF strategy document and certainly no government's policy. Even the author of the piece said it was not a description of her vision of the future, but intended to start a discussion about technology. But it's been picked up by wackaloons around the world as part of some overarching conspiracy theory.

bdcravens 10mo ago

While $84k is the average household income in the US, the average among home owners is a bit higher, around $100k-$120k. Also, very high prices really skew averages. Many "starter homes" are closer to $200k. I bought new 3 years ago, and the rent home I lived in prior, which was in an older middle class neighborhood in a Houston suburb, sold for $224k (and this included some basic renovations like new flooring)

ashtonianthedev 10mo ago
Just want to comment, I think if you were to overlay where people work vs live, most people probably do not have reasonable access to housing @ 225k. Also I think much of this problem is zoning, which coincidentally Houston has none and has some of the lowest housing costs in the nation, especially for a city of its size. I suspect much of the housing crisis on the west coast is because of poor zoning laws and could be fixed with a stroke of a pen, at the expense of the local housing market value.
- ethbr1 10mo ago
  On the location vs price front, I think that's a bit of a red herring. Because people generally want to live close to their jobs. If cities have a lot of demand, it's partly because they have a lot of jobs, which means that the price of housing in cities relative to income is still an important metric. Viewed by holding more of those things constant, the urban medianHousePrice : medianIncome is how much of people's lives we're requiring they dedicate in order to have a roof over their heads.
jghn 10mo ago
We should be using medians, not means for bot hate income and house prices.

zeroonetwothree 10mo ago

The average homeowner household makes more than the average. Many people are not homeowners. For example if you are 22 and just started your first job you are included in the statistics but I think we wouldn’t really expect it to be affordable to become a homeowner (nor would it be desirable from a labor mobility standpoint). And many people prefer renting somewhere like Manhattan to buying in Topeka. So it doesn’t make sense to assume everyone wants to buy a house. I know several millionaires that rent. It would be better to compare overall cost of housing to income.

darth_avocado 10mo ago

> assuming 1/3 going to a mortgage would give you $2.3k a month to work with That’s the problem right there. Even if you’re locked in on the historically low sub 3% mortgages, there is a chance you’re spending more than 1/3 of your income on housing. People with higher rates and people who are renting, spend a lot more than 1/3 of their income on housing. I know finance influencers and older generations keep talking about 1/3 income on housing, but that hasn’t been a thing for a while now. Even before the pandemic surge in housing costs, 1/3 on housing was dream in most cities across the country.

FireBeyond 10mo ago
Sure but also I believe that the upper limit for most mortgage servicers is around 41, maybe 43% (one of those two, cannot remember which, or at least it was 4y ago).
- darth_avocado 10mo ago
  There’s no limits per se. 43% is what they “prefer”. More recently with the low demand for mortgages, that number is more flexible. And all of this is on Gross Income and not net. So you could in theory be spending more than 50% of your net income on mortgage alone. If you want to consider “housing” costs, the number would be lot higher.
- toshinoriyagi 10mo ago
  I bought a year ago and my max lending amounts were around 45-50% of my gross salary.
Swizec 10mo ago
> there is a chance you’re spending more than 1/3 of your income on housing. People with higher rates and people who are renting, spend a lot more than 1/3 of their income on housing. We live in San Francisco and pay rent at about 15% of combined gross income. I think people really underestimate the value of renting.
- 10mo ago

averageRoyalty 10mo ago

$1700 per month pays off a $350k loan in 17 years, does it not? That's assuming that the household income stays static over that time. That is very reasonable. In Australia, 35 year mortgages are normal, and 25-30 year mortgages were normal 20 years ago. Why would your household income need to be 1/4 of the cost of the house to make it work?

zdragnar 10mo ago
The payment is set up such that the interest is amortized over the life of the loan, so your earliest payments are almost all going to interest and the latest payments are mostly the principle. This looks like a standard 30 year loan. If 100% of the 1700 went to principle and the was no interest then yeah, your 17 years works out, but then the bank makes no money.
c22 10mo ago
Do mortgages in Australia not have interest?
jlokier 10mo ago
> $1700 per month pays off a $350k loan in 17 years, does it not? No, it does not. You forgot the interest. Let's call it 6%, close to the current US average. The interest by itself comes to more than $1700 a month! Paying $1700 per month, you'll never pay off $350k, even with a 1000 year mortgage. To pay in 17 years, you'd need to pay $2741 (plus fees) per month. Most of that will be interest at first, but it tapers down. If you want to start out not paying mostly interest, you'll need to pay at least $3500 (plus fees) per month.
- klipklop 10mo ago
  It's scary that you even have to explain this to another adult.
  - ethbr1 10mo ago
    Yes and no. A lot of people have gaps in their financial education. That said, mortgages aren't rocket science. 1. Assume at the end of the day you want the homeowner to be paying a stable monthly amount*. 2. In order to get there, you have {loan term}, {interest rate}, and {loan amount} as primary variables. 3. Assuming {loan term} and {interest rate} are constant (in a given mortgage market, at a given time), that leaves {loan amount} as the only variable. So how do you get a constant monthly payment for a variety of {loan amounts}? 4. You add up all the interest that would be owed over the entire {loan term}, using {interest rate}, then divide each monthly payment into some proportion of {interest payment} and {principle payment}. 5. You also front-weight the interest payments, because at that time there's more outstanding total loan (versus at the end of the loan term, when only a little principle remains to be paid back).* * Not super complicated. Yes, there's compound math, but conceptually simple. * For some definition of stable, even if it readjusts on some schedule * * Point in time interest pricing like this also makes future recalculation for over/underpayments easier, as you're essentially trued-up on interest payments at all times

mikestew 10mo ago

...to stick to the 1/3 rule. When did that become the rule? Why, back in my day, 25% was the max amount recommended to spend on housing. Though that was also back when no one would even think of taking out a 72 month car loan. Maybe one of those new 60 month loans, if you just don't have the money, otherwise stick to 36 months. And like you, I just don't get it. 1/3 on the house, whatever percentage comes out for the $40K car @ 72 months (granted, one doesn't need to buy new), where's this money coming from? We live in Redmond (WA), and I'm at a loss as to how there are so many newer Teslas parked in >$1MM houses. C'mon, there's only so many of those $500K total comp jobs to go around.

lisbbb 10mo ago
New car prices are now simply outrageous. Auto makers need to start ditching features and get their unit costs back down.
- omosubi 10mo ago
  what features in entry level cars do you suggest they get rid of?
  - ethbr1 10mo ago
    Ultrasonics, eye monitors, electronic locks, self-contained infotainment systems (just a screen and the interfaces for a phone would be fine), lane keeping, auto-braking
    - dzhiurgis 10mo ago
      All of these are required by law
      - RandomBacon 10mo ago
        Source? Considering that not all cars for sale have all of those features, I'm pretty confident in saying that you're wrong. Back-up cameras are required by law, so that requires a screen, but the law does not require that screen do double-duty as an infotainment screen.

crooked-v 10mo ago

Housing costs in the US can be out of line with average income because there isn't enough housing. Sellers only have to compete for the top X% of incomes.

jimnotgym 10mo ago

In the UK it seems more about the super wealthy buying up houses to rent them out. Incomes don't appear to be the biggest factor at all, more about concentration of wealth

hedora 10mo ago

We’re paying Cal FAIR about 10% the value of our house per year, despite having best possible fire safety for come construction and the area surrounding the house. So, in your example, thats 175/10/12 = 1.5K per month, leaving $200 for the mortgage. So, $175K is unrealistic. In related news, Cal FAIR is lobbying for a 60% increase in rates this year, because, apparently 16% of rural houses in California burn down each year (it’s either that, or they’re unbelievably corrupt/incompetent, since they’re somehow losing money). Note that people in flood planes (much of the cities) have similar issues.

missedthecue 10mo ago

A lot of people get help from mom and dad, but if you're already a homeowner, the home youre sitting on has appreciated too, so you can role equity into your next purchase. Not everyone is starting from zero. There are so many homeowners who would not be able to afford the home they're currently in, but are sitting on $500k of equity they can role into their next place.

aidenn0 10mo ago

If there are N houses available in the bay area and FAANG hires a total of more than N people from outside the bay area at a median $X/year, then the median cost of a house will be more than the most house that someone making $X/year can afford.

nunez 10mo ago

The taxes are important though. You'll "pay" for that monthly through your escrow account (or you'll save up for it in a HYSA or something, though personally I'd rather have my lender deal with the city and estimating next year's increases). With taxes included, that $1800 mortgage can easily become $2600-$2800/month --- $33,600/year --- in a high-property tax state (like many of the states that don't have income tax, which are where many of the cheap homes are). For that to be 30% of your _net_ income, you'll need to clear $112k/year _post-tax_, which is $373k/yr HHI pre-tax assuming 35% of those go to federal, state and FICA. You'll "only" need $112k/yr HHI if, like lenders, you're assuming that this will be 30% of your gross income. However, if we assume net is 65% of gross, then this mortgage is 46% of your net income. I know that a lot of people carry that risk, but that's a little high for my comfort level. As for: > Are people just devoting 50%+ of their income to housing? Everyone buying a house with the help of mom and dad? I just really don't get it. Like almost everyone else that didn't have Mom and Dad angel investors, we got insanely lucky. I had two really good years financially during which time I was able to save enough to hit our 20% down and then some. We were also lucky with our current situation, as our landlord was willing to extend our lease without increasing the rent and the place we were renting was pretty sweet.

LandR 10mo ago

1/3 to mortgage is crazy to me. My mortgage is around 6% of my gross, and just under 10% of my net and I feel that's high / stressful to me. I want to get it paid off ASAP.

solumunus 10mo ago
You’re certainly unusually hyper anxious about this.
- LandR 10mo ago
  Probably. I did find it quite tough for a lot of years to treat myself, as I would try to save as much as I can to have a safety net. But even now with a safety net in the bank, I still have in the back of my head if I purchase something that is x mortgage payments, and I could save that instead to have in the bank in case I lose my job.

altairprime 10mo ago

If you think of it as a homeowner debt subsidy, that forces a higher percentage of the country into recurring-revenue rentals, that provides an adverse incentive against correcting home prices for income. Right now the consumer debt that’s substituting for wage increases hinges on the middle class being able to access lines of credit; one very popular LOC is home mortgages. If home values are allowed to fall to the level predicted by median wages, that could trigger a massive wave of defaults and bankruptcies as existing loans go underwater, homeowners have their lines of credit shorn, and then start missing mortgage payments and file for bankruptcy. U.S. mortgage loans for 1-4 bedroom properties are currently $14.5 trillion USD; for comparison, U.S. GDP is around $31 trillion USD. So if 10% of homeowners default or discharge their mortgage debts due to home prices collapsing to realistic levels, U.S. GDP drops 5% that year (not accounting for the loss of interest the banks would’ve recorded to GDP as production output for up to decades). Median household wages for homeowners is $86k, well below the $120-140k threshold recently discussed, supporting the government estimates that 30% of homeowners have difficulty making payments on their homes. So, if those 30% went bankrupt over a home prices crash, there’s a plausible threat of a 15% collapse in GDP (compared to Covid, which was around 10%). Relative to that, I don’t think economic policy is likely to prioritize new home ownership, not when a catastrophic reversal of years of GDP gain is a material risk. It would be a different story in a first world country, I expect, but here trying to reset home prices would just result in a massive rent costs spike (the U.S. free market tends not to build median-wages housing if it can avoid it) and a notable fraction of those households becoming homeless, while they watch as other families benefit from the price correction’s devastation by buying up their home at auction. The best that policy can do with the restrictions the U.S. government places on itself is to issue federal funding to regional governments to build median-price housing — and since much of that funding would go to regions explicitly hostile to current U.S. leadership, that is extremely unlikely to be passed by Congress.

tedggh 10mo ago

Usually you don’t buy a whole house when you are 25. You start with a small unit. My first condo was 700 sf which I sold for a good profit and use the money to pay for a bigger condo, about double the size. I then combined the profit of the second home with my wife’s profit from her house which was also small and together we got our first nice house just outside the city, about 15 min commute. We paid around 220 $/sf compared to 600 $/sf for a similar home in the city. Our house is 3X the size of the house I grew up in with my parents and 3 siblings, which was standard size for a middle income American family in the 80s. Not to mention the quality and amenities of our house is so much better than a house from the 80s. Yes houses are a lot more expensive today but only if you are buying in busy urban areas. If you dare to look in the suburbs you’ll find great homes which by square footage have not increased that much in the past 30-40 years after adjusting for inflation. In the city you are competing with everyone else wanting to be able to walk to their favorite brunch place. Cities also have crazy regulations that prevent building affordable homes.