If 66% of households are in owner-occupied housing, how small is this middle class that can’t afford homes?
Is the median (or even 40th percentile) household not middle class?
Americans don't believe middle class can afford homes
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Re: Americans don't believe middle class can afford homes
#12Feedback systems with long delays are going to be easier to destabilize than systems with short feedback cycles.
There's a lot of "memory" in housing prices.
Houses are just about the hardest item to build in America today. You need land, and you cannot make them in a factory. All cost cutting measures have been in materials (to the point where quality is degrading).
Regulations push new players out of the market - increasing prices.
Housing is a social prestige item like health care and education - so that will drive costs up too.
The US will have 100m more people in the coming decades no matter what - so demand will always be high.
Solution? There is none. It's how the power elite want it.
Re: Americans don't believe middle class can afford homes
#13We spent 40 years believing that house prices were fine because the debt load didn't matter because interest rates would go down forever. Prices are based on the seller extracting the maximum ability to pay from the buyer, so payments were effectively fixed, and every drop in interest rates was perfectly offset by an increase in the purchase price. Then we hit interest zero, there was nowhere left to go. Now we're fi…
> Then we hit interest zero, there was nowhere left to go.
Not really. We just had impetus to raise them.
Re: Americans don't believe middle class can afford homes
#14It's because they can't, the value has been extracted up
Re: Americans don't believe middle class can afford homes
#15I've been saving up for the past 8 years and have got a pretty decent deposit built up but the costs of houses in my area are just so expensive that the deposit barely makes a scratch in the overall mortgage costs and I wouldn't be able to afford the mortgage, seems like the more I save up the higher the housing prices go. It absolutely amazes (and infuriates) me that some of the houses I see going for 400-500k now went for 150-200k 10 years ago.
Re: Americans don't believe middle class can afford homes
#16Because they can't as a result of private equity firms and hedge funds buying houses for investment purposes. Without legislation, people are going to be renting for the rest of their lives like modern day serfs.
Re: Americans don't believe middle class can afford homes
#17There's a recent Redfin analysis on this. On average, only 16% of homes were affordable for households earning a median income [1]. It's wild how broadly these affordability numbers vary, and just how much less affordable homes are today than they were just 2 years ago.
Ohio must either be a very undesirable state to live in, or they're doing something right to keep house prices relatively reasonable: 3 of the top 5 most affordable cities are in Ohio!
[1] https://www.redfin.com/news/share-of-homes-affordable-new-20...
Re: Americans don't believe middle class can afford homes
#18People jump to interest rates but also forget to include skyrocketing property tax and insurance rates.
You need at least another 200k on top of the home value to have recurring income to pay those bills annually.
Re: Americans don't believe middle class can afford homes
#19We can barely agree on what the definition of middle class is. A quick search shows one source quoting anywhere between $48,500 to $145,500 a year which is a very broad range. Part of this is cost of living varies significantly in different parts of the US. With the current average salary, average home price, and current interest rates, people aren't wrong that housing is very unaffordable in most places.
Middle class is anybody who is not poor and not rich.
So it is clear from this definition that the lower bound for it is income of $48,500 from what you are not considered poor anymore and upper bound is income of $145,500 from what you are considered rich.
Now the most important consideration is - if a person can't afford a home, then can they really considered to be not poor?
Re: Americans don't believe middle class can afford homes
#20I can afford to buy a house, and I'm middle class.
The trouble is, that house would be in the middle of nowhere, with Starlink being the only viable internet option. Nowhere else is going to have house prices under $200k for something family-livable.