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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

#141

Post by WarOnPrivacy »

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.

> buyers want more house

Builders want more house. Buyers can't buy what isn't built.

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

#142

Post by ryandrake »

NDizzle wrote: post #104
whatindaheck wrote: post #99

I just turned 30. If I can’t afford a house in the next 10 years I’m going to be a lifelong renter. Why get a 30 year mortgage at 40, to only pay it off at 70 and then die in two decades? It feels like the wrong thing to do but…I really don’t know how else to look at it. Sure. I could afford a house today where I grew up. But I’d have to surround myself with the highly undesirable culture (in my opinion) in those pla…

> Why get a 30 year mortgage at 40, to only pay it off at 70 and then die in two decades? 1) Inflation hedge. 2) At some point in the next 30 years, you will be able to sell your home at / above what you paid for it, just due to the cyclical nature of things. I'm not saying real estate always goes up... but for example, I bought at age 41. $515k. Current estimated value, $900k. When the kids are all graduated and out…

There's also the tax benefit of mortgage interest vs. rent payments. Granted, not everyone itemizes, but it's there.

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

#143

Post by WarOnPrivacy »

brianwawok wrote: post #132
sofixa wrote: post #87

Earlier quoted context omitted.

> 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.

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

Perhaps you have them all.

Everywhere else, buyers can only buy what exists. Affordable home buyers buy nothing because there is nothing within reach.

The notion that people would choose detrimental living because they couldn't get a house that was 3x their need seems absurd.

The more likely cause is the reality that new houses cost more than double what they were in the 1980s - adjusting for inflation and comparing for size, amenities and market.

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

#144

Post by ryandrake »

hasty_pudding wrote: post #33
skepticATX wrote: post #9

In most ways the lives of middle class Americans are better than that of their counterparts 30 years. We have an idealized view of what prior generations’ middle class looked like. Home ownership is the one exception. We need to build denser, and we need to build actual communities that are livable without needing to drive 30 minutes to go to the grocery store. The middle class of today has every right to be infuriat…

Health care, automobile price, groceries, education . we can buy a TV cheaper than ever but anything important has massive inflation

Yea, well... but besides the costs of health care, automobiles, groceries, education, and homes (I'd also add gas and energy), things are totally better than 30 years ago! In other words, I'd trade lifestyles with my "parents of 30 years ago" any day.

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

#145

Post by seanmcdirmid »

dragontamer wrote: post #110
quickslowdown wrote: post #85

Earlier quoted context omitted.

Seems like financypants lives in a beautiful world where corporations aren't greedy shitbags engaged in price gouging

Well, the real problem with regards to housing is that we just didn't build enough houses IMO. Cheap houses in particular get voted off of most city councils or other local politics. It only costs $20k per trailer in a trailerpark IIRC, and so trailer parks can build hundreds of housing units for under 10-million invested. Or various apartment buildings can be built with similar cost-efficiencies. Or Row-homes, or mu…

The real problem is that there isn't enough housing where everyone wants to live. There is a shortage in a few popular cities while the rest of the country can have a surplus of housing to live in.

Yes, Seattle could use more trailer parks, but there is absolutely nowhere to put them. We build lots of multiplexes, row homes, town homes, apartment buildings, but we still have a net influx of a 30k/year into the area, so its a losing battle.

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

#146

Post by WarOnPrivacy »

seanmcdirmid wrote: post #145
dragontamer wrote: post #110

Earlier quoted context omitted.

Well, the real problem with regards to housing is that we just didn't build enough houses IMO. Cheap houses in particular get voted off of most city councils or other local politics. It only costs $20k per trailer in a trailerpark IIRC, and so trailer parks can build hundreds of housing units for under 10-million invested. Or various apartment buildings can be built with similar cost-efficiencies. Or Row-homes, or mu…

The real problem is that there isn't enough housing where everyone wants to live. There is a shortage in a few popular cities while the rest of the country can have a surplus of housing to live in. Yes, Seattle could use more trailer parks, but there is absolutely nowhere to put them. We build lots of multiplexes, row homes, town homes, apartment buildings, but we still have a net influx of a 30k/year into the area,…

> The real problem is that there isn't enough housing

Because too little has been built and little of that fits widespread need.

> where everyone wants to live.

Wants to live infers worthwhile choices. The reality is that people live anywhere they can survive. Worthwhile choices don't include locations that are likely to lead to homelessness.

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

#147

Post by WarOnPrivacy »

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…

> If you stop protecting them as investment accounts, you nuke the retirement accounts of 100 million people.

A similar argument is advanced to protect shareholders who facilitate the degradation of quality of life across society.

Perhaps retirement options should come with complete and crystal clear disclosure of actual consequences - and that those consequences needed to be vocally repeated by the buyer prior to acceptance. Recorded and witnessed, of course.

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

#148

Post by nradov »

ryandrake wrote: post #142
NDizzle wrote: post #104

Earlier quoted context omitted.

> Why get a 30 year mortgage at 40, to only pay it off at 70 and then die in two decades? 1) Inflation hedge. 2) At some point in the next 30 years, you will be able to sell your home at / above what you paid for it, just due to the cyclical nature of things. I'm not saying real estate always goes up... but for example, I bought at age 41. $515k. Current estimated value, $900k. When the kids are all graduated and out…

There's also the tax benefit of mortgage interest vs. rent payments. Granted, not everyone itemizes, but it's there.

The increased standard deduction in the most recent federal tax overhaul made it pointless for a large chunk of middle-class homeowners to itemize.

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

#149

Post by seanmcdirmid »

WarOnPrivacy wrote: post #146
seanmcdirmid wrote: post #145

Earlier quoted context omitted.

The real problem is that there isn't enough housing where everyone wants to live. There is a shortage in a few popular cities while the rest of the country can have a surplus of housing to live in. Yes, Seattle could use more trailer parks, but there is absolutely nowhere to put them. We build lots of multiplexes, row homes, town homes, apartment buildings, but we still have a net influx of a 30k/year into the area,…

> The real problem is that there isn't enough housing Because too little has been built and little of that fits widespread need. > where everyone wants to live. Wants to live infers worthwhile choices. The reality is that people live anywhere they can survive. Worthwhile choices don't include locations that are likely to lead to homelessness.

> Because too little has been built and little of that fits widespread need.

But housing has been built and is being built. We leave it to the market, so its mostly higher end housing that gets built (more money to be made), but plenty of well to do techies are moving to the city that there isn't a shortage of people who want to live in that.

> Wants to live infers worthwhile choices. The reality is that people live anywhere they can survive. Worthwhile choices don't include locations that are likely to lead to homelessness.

Actually, cites with nice weather but expensive weather attract the chronic homeless in droves. They don't care about the high cost of housing (they couldn't afford to live in Detroit either, so what does it matter?), and the nicer more mild weather works better for sleeping rough and not dying.

I'm not really sure what is your point. If all American residents wanted to live in San Francisco, should we fit 380 million people in that small area?

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

#150

Post by dragontamer »

seanmcdirmid wrote: post #149
WarOnPrivacy wrote: post #146

Earlier quoted context omitted.

> The real problem is that there isn't enough housing Because too little has been built and little of that fits widespread need. > where everyone wants to live. Wants to live infers worthwhile choices. The reality is that people live anywhere they can survive. Worthwhile choices don't include locations that are likely to lead to homelessness.

> Because too little has been built and little of that fits widespread need. But housing has been built and is being built. We leave it to the market, so its mostly higher end housing that gets built (more money to be made), but plenty of well to do techies are moving to the city that there isn't a shortage of people who want to live in that. > Wants to live infers worthwhile choices. The reality is that people live…

> But housing has been built and is being built.

We dramatically slowed-down homebuilding after 2007, and have *NEVER* recovered.

https://www.census.gov/econ/currentdata/?programCode=RESCONS...

Note that our population has been growing at much faster rates than housing. So the overall trend is inevitable: fewer housing units than our population growth means that we will just have more expensive houses.

There's simply not enough houses for everyone.

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