The big flip…

[Tim]

My point is, if it’s so much better for everyone how does a person making an average salary buy a comparable home for his/her family?

This affects everyone, not just one demographic.

 

[Tim]

I think most Americans are poorer than people were 70 years ago. Back then a man with no college could support a family, pay his mortgage and buy a car with no loan. Now it takes 2 workers for most families. Technology and outsourcing masks all of this.

All good points.

My wife and I both work so we have to have 2 cars. Neither were paid for with cash. In general, people now are financed way more than our parents ever were.

 

[Captain Brainstorm]

There are 2 other factors to this huge increase in home prices.

1. Women joined the workforce. This meant families had more money to spend on a home and prices got bid up higher. The modern carpenter affords his house because his wife is paying for it too.

2. Mortgage rates used to be much higher. Higher interest rates keep downs down the sale price of a home. If someone can afford $500/month in mortgage payments it doesn't matter what percentage is interest and what is principal. People like your dad and my dad probably bought homes at the best time in history. The high interest rates kept the prices lower and then a decade later they could refinance to a low rate and watch their home value skyrocket and have huge amounts of home equity to borrow from.

I think most Americans are poorer than people were 70 years ago. Back then a man with no college could support a family, pay his mortgage and buy a car with no loan. Now it takes 2 workers for most families. Technology and outsourcing masks all of this.

Poor is also a relative term here. We’re the only country in the world where the poor are fat, drive cars, and have phones. You should see how the poor live in some other countries.

 

[Bike N Gear]

People today also spend their salary on numerous other "necessities" that didn't even exist when our parents were buying a house.

Cable TV, plus a half dozen subscription channels. Cell phones for the entire family. Internet, nevermind the computers they require. Subscriptions for the music in your car, your doorbell camera, your cloud storage. All this shit adds up.

That hypothetical carpenter now earning $140k would be ok if he only needed to pay for a car and a house.

 

[rick81721]

Poor is also a relative term here. We’re the only country in the world where the poor are fat, drive cars, and have phones. You should see how the poor live in some other countries.

This. Go to a country like India to see real poor.

 

[Santapez]

This. Go to a country like India to see real poor.

We have it here too. But if you're in a wealthier area you're not going to see it.

 

[serviceguy]

We have it here too. But if you're in a wealthier area you're not going to see it.

Ever been to India? I think not. I mean, there’s real poor here no doubt, but India takes it up a notch or two.

 

[Johnny Utah]

We have it here too. But if you're in a wealthier area you're not going to see it.

No way. I suggest you travel out if the US or at least do some research. Not on the same level at all.

In addition we have a support system to help people with shelter, food/water.

 

[Fire Lord Jim]

There are 2 other factors to this huge increase in home prices.

1. Women joined the workforce. This meant families had more money to spend on a home and prices got bid up higher. The modern carpenter affords his house because his wife is paying for it too.

2. Mortgage rates used to be much higher. Higher interest rates keep downs down the sale price of a home. If someone can afford $500/month in mortgage payments it doesn't matter what percentage is interest and what is principal. People like your dad and my dad probably bought homes at the best time in history. The high interest rates kept the prices lower and then a decade later they could refinance to a low rate and watch their home value skyrocket and have huge amounts of home equity to borrow from.

I think most Americans are poorer than people were 70 years ago. Back then a man with no college could support a family, pay his mortgage and buy a car with no loan. Now it takes 2 workers for most families. Technology and outsourcing masks all of this.

This right here. Let me add one more factor. We buy much more house than prior generations did.

 

[rick81721]

We have it here too. But if you're in a wealthier area you're not going to see it.

Not even close. Try living on less than $2/day. India has almost the entire population of the US at this level of extreme poverty. It is heart-wrenching to see.

https://www.upayasv.org/why-jobs

 

[Steve Vai]

Poor is also a relative term here. We’re the only country in the world where the poor are fat, drive cars, and have phones. You should see how the poor live in some other countries.

Poor people in the US drive $100,000 lifted pick up trucks.

 

[jShort]

 

[SmooveP]

This right here. Let me add one more factor. We buy much more house than prior generations did.

And maybe the biggest factor: the transition of real estate from being a utilitarian thing (shelter) to yet another "investment" commodity. The American Way: pick any mundane thing, feed it into the hype machine and get everyone to bet on (or against) it. You know, like crypto or pickleball.

 

[Dave Taylor]

This affects everyone, not just one demographic.

Wrong. It affects the lower wage people more and first timw home buyers.

 

[Dave Taylor]

There are 2 other factors to this huge increase in home prices.

1. Women joined the workforce. This meant families had more money to spend on a home and prices got bid up higher. The modern carpenter affords his house because his wife is paying for it too.

2. Mortgage rates used to be much higher. Higher interest rates keep downs down the sale price of a home. If someone can afford $500/month in mortgage payments it doesn't matter what percentage is interest and what is principal. People like your dad and my dad probably bought homes at the best time in history. The high interest rates kept the prices lower and then a decade later they could refinance to a low rate and watch their home value skyrocket and have huge amounts of home equity to borrow from.

I think most Americans are poorer than people were 70 years ago. Back then a man with no college could support a family, pay his mortgage and buy a car with no loan. Now it takes 2 workers for most families. Technology and outsourcing masks all of this.

I get the two incomes but maths still don’t add up. Interesting that rates are pretty high but home prices haven’t budged in my new area or old.

 

[Dave Taylor]

And maybe the biggest factor: the transition of real estate from being a utilitarian thing (shelter) to yet another "investment" commodity. The American Way: pick any mundane thing, feed it into the hype machine and get everyone to bet on (or against) it. You know, like crypto or pickleball.

This, it makes me laugh that google’s AI bit screwed up on stage and erased $100 billion from it’s value lol. Merica.