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Americans don't believe middle class can afford homes

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Re: Americans don't believe middle class can afford homes

#131

Post by Wildliferanger »

brianwawok wrote: post #34
atourgates wrote: post #10

They're not wrong. Check out the graphs on this page: https://www.longtermtrends.net/home-price-median-annual-inco... The Home Price to Median Household Income Ratio is higher than it's been in 70 years. Between 1965 and the year 2000, it fluctuated between 3.5 and 4.5. At the top of the housing bubble in 2008, it hit 6.8. Right now it's at 7.6. And I don't believe the housing price data this index uses (from S&P Cor…

Also look at these graphs https://www.statista.com/statistics/529371/floor-area-size-n... The average new construction house size changes from 1500 square feet in 1975 to 2500 square feet in 2022. So yes, some of the higher cost of housing is simply that buyers want more house. I know my personal house is nearly double the size of house I grew up with, despite only having 3 kids vs my parents 2.

Same thing happened with trucks and the auto market in general as well, There is more profit margins in bigger stuff so thats what companies focus on making and stop making the low end rendering everything unafforadable. Also the cheap base models went from majority to mostly nonexistant.

Re: Americans don't believe middle class can afford homes

#132

Post by brianwawok »

sofixa wrote: post #87
brianwawok wrote: post #34

Earlier quoted context omitted.

Also look at these graphs https://www.statista.com/statistics/529371/floor-area-size-n... The average new construction house size changes from 1500 square feet in 1975 to 2500 square feet in 2022. So yes, some of the higher cost of housing is simply that buyers want more house. I know my personal house is nearly double the size of house I grew up with, despite only having 3 kids vs my parents 2.

> that buyers want more house Is it that buyers are wanting more house or that builders make more profit selling more house due to red tape and zoning?

At least by me, 100% buyers wanting more space.

Each kid gets their own bedroom. A home office. Maybe a movie room.

Compare that to the 1950s boomer house, that has 2 kids in 1 bedroom, and no "extra" rooms.

Re: Americans don't believe middle class can afford homes

#133

Post by dugAwt »

bugglebeetle wrote: post #127
financypants wrote: post #118

Earlier quoted context omitted.

Is this landlord savior complex common? I’ve never come across it. It’s a silly perspective even at face value.

It’s how liberals resolve the cognitive dissonance of getting someone poorer than them to pay for their mortgage, without seeing themselves as greedy or parasitic.

[dead]

Re: Americans don't believe middle class can afford homes

#134

Post by Sohcahtoa82 »

chmod600 wrote: post #128
Sohcahtoa82 wrote: post #83

Earlier quoted context omitted.

For a stock, maybe not. But for a house? It is absolutely beyond ridiculous for a house to double in 10 years. Are you kidding me? That's far beyond the rate of inflation. Unless there are significant improvements to the house or the surrounding area, the value of house should not rise faster than inflation, at least not by some significant margin.

"the value of house should not rise faster than inflation, at least not by some significant margin" What does "should" even mean here?

I think the meaning is clear given the full context of my comment.

It is ridiculous for a home owner to expect the value of their home to rise faster than inflation by a significant margin without there being massive improvements to either the home itself or the neighborhood.

And skyrocketing housing prices means the rich get richer while utterly fucking over the young generation and locking them out of home ownership as prices rise significantly faster than wages.

Re: Americans don't believe middle class can afford homes

#135

Post by willis936 »

rco8786 wrote: post #8
SubiculumCode wrote: post #2

Well...they are kinda right. 3k a month mortgage when the interest rate was low, now I imagine it would be closer to 4k per month. Housing prices might not be growing as fast but I haven't seen them dropping.

A 4k payment is a ~$580k house at 7.5%. Median home price is $387,600 as of November '23, for a payment of $2716. Not to say things aren't tough out there. Just that a $4k mortgage is still 30%+ more than what people can expect to pay at the median. This ignores taxes and insurance of course.

I pay more than $4000 / month in rent. In order to reduce this my SO or I would have to leave a respective dream job or spend 3-4 hours a day commuting.

Even if we thought ditching dream jobs was something worth doing, we would only be trading into lower income / less fulfilling jobs to enter a historically awful housing market.

Re: Americans don't believe middle class can afford homes

#136

Post by erik_seaberg »

Analemma_ wrote: post #23
burlesona wrote: post #6

We 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…

> We're going to have to have a cultural shift towards housing as shelter, not investment. We can't have this, because a huge fraction of household wealth is tied up in people's houses. If you stop protecting them as investment accounts, you nuke the retirement accounts of 100 million people. To be clear, I completely agree with you that this system has to be dismantled before it gets worse, and a lot of this suppose…

Counterparty risk. If housing craters broadly, you don’t want to bet on reliable payments from banks holding the bag.

Re: Americans don't believe middle class can afford homes

#138

Post by [deleted] »

sokoloff wrote: post #101
weberer wrote: post #42

Earlier quoted context omitted.

Note that the survey is about perception, not whether or not they actually can afford it.

Sure. If we surveyed a bunch of Americans who perceived the world was flat, I expect that we'd augment that perceptual survey with additional data and context.

[deleted]

Re: Americans don't believe middle class can afford homes

#139

Post by ryandrake »

benreesman wrote: post #75
betterprojects wrote: post #4

We 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.

When I was young in the days of yore, “middle class” was something like “median household income”, maybe a bit more but not double, which got you a 30-year fixed in a part of town that was safe but not swanky, and was easily had by a worker with a college education or trade, or a hard worker, great saver, without. “Upper middle class” was your doctors and lawyers, but the typical kind (the 100-week partner guy was fu…

I always thought all that numerous stratification into "upper middle class" and "lower middle class" and "upper lower middle class" and "lower middle upper middle class" and so on was kind of pointless and only serves to either 1. satisfy people who feel the need to precisely identify their own position on the totem pole or 2. pits people against each other who are actually in the same class and should be fighting together.

Most of us are N missed paychecks away from being broke. For some, that N is 1 or 2, for some it's 5, for retirees, the number may be even larger; but we all inevitably need money from our labor to come in in order to live. And this is true regardless of the dollar amount on that paycheck. We're all in the same boat.

For a very few lucky people, that N is infinite because their money grows faster than they can spend it. They get richer just by existing.

To me, these are really the only two meaningful economic classes. Do you have to work for your living or not?

Re: Americans don't believe middle class can afford homes

#140

Post by WarOnPrivacy »

ta1243 wrote: post #62
atourgates wrote: post #10

They're not wrong. Check out the graphs on this page: https://www.longtermtrends.net/home-price-median-annual-inco... The Home Price to Median Household Income Ratio is higher than it's been in 70 years. Between 1965 and the year 2000, it fluctuated between 3.5 and 4.5. At the top of the housing bubble in 2008, it hit 6.8. Right now it's at 7.6. And I don't believe the housing price data this index uses (from S&P Cor…

Aren't rates in the US lower now than they were at the top of the 2008 bubble? Certainly are in the UK

> Aren't rates in the US lower now than they were at the top of the 2008 bubble?

No. Fed is currently at 8.5%. Highest bubble rate was 8.25% in Q4 2007. In 2008 rates started at 7.76% and ended at 5%.

ref: https://www.ferc.gov/interest-calculation-rates-and-methodol...

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