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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

#61

Post by ToucanLoucan »

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…

We have to start somewhere. We have people who say that we can't demolish houses as investments because it's one of the few remaining holds of generational, familial wealth left. And that's true. But we also don't have enough housing, and building more housing will naturally devalue the housing that exists. That's also true. But we can't simply let this keep going. There are people who can afford those homes: private equity firms, and they're buying more than they ever have to rent them out. While we bicker about which way to go about it is best while ensuring we harm as few people as possible, the people already in charge right now are teeing up to not only destroy them as investment vehicles for the people who own them, but ensure that no people will ever own them again, that we'll all just be little rent-paying serfs in their various fiefdoms.

These issues are complicated, and any action taken will have ripple effects across centuries, much like the practices of redlining have led to generations of impoverished minorities and over-policed communities. But at some point we have to begin solving the damn problems instead of just arguing and debating ad-infinitum while the system already in place is making all of it objectively, factually worse.

And frankly, my inner cynic sees the drumbeat of the neoliberal establishment, the ones most likely to have the most valuable "investment accounts" in the form of homes, constantly saying "well we need to make thoughtful considerations about this before we do anything" over and over and over, for years on end, while their investments continue to gain value year over year, and the societal harms inflicted on others continue to not be their problem, as frankly, not positioned or well incentivized to actually fix it since they directly profit from the problem they're being asked to solve. I don't want to believe none of you are capable of empathy, but incentives are much, much stronger than feelings, and none of the establishment middle-class has any solid, incentivized reason to wind down the profit machines that are continuing to make them insanely rich. That worries me.

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

#62

Post by ta1243 »

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

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

#63

Post by rockinghigh »

sokoloff wrote: post #11

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? https://fred.stlouisfed.org/series/RHORUSQ156N

Someone may live in an owner-occupied home and not own it--e.g.: adult children living with their parents, cohabitating adults.

> The share of young adults ages 18 to 34 who have formed an independent household has declined since 2010, while the share living with their parents has increased sharply. In 2010, less than one-third (32 percent) of young adults ages 18 to 34 were living with their parent(s), but this share jumped to 35 percent by 2017. The increase was sharpest among 25- to 29-year-olds, rising from 21 percent in 2010 to 26 percent in 2017. The share of 30- to 34-year-olds living with their parent(s) also increased by 4 percentage points across this period.

https://www.prb.org/resources/u-s-household-composition-shif...

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

#64

Post by dragontamer »

Analemma_ wrote: post #60
dragontamer wrote: post #30

Earlier quoted context omitted.

> 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. So the question is if the wealthy can remain wealthy, or if the poor can get houses? I'm sorry, but... as a Catholic the choice is obvious to me. Blessed are the poor, etc. etc. We should favor those who don't have…

I mean I agree with you. But what I'm trying to convey is, if you go to voters and say, "here's a policy update that will fix the housing crisis and secure a future for the next generation, but it will also subtract $400K from your total wealth", they're going to not just say no, but fight you to their last breath. Proposed policies need to account for this if they're going to have a realistic hope of success. And no…

The wealthy throughout history have often made sacrifices when wealth was obviously unfair. Or when wealth was needed to move society forward.

What a wealthy person wants isn't necessarily greed, and we need to stop thinking like that. Even in Roman times, wealthy got together to fund various projects for the greater good.

What the wealthy want most of all, is if you take their wealth, that it truly does go towards a greater good. And "building more houses" takes wealth through free-market capitalist systems in any case (ie: its not a direct wealth taking we're talking about, but a steady change as zoning laws allow more houses to be built).

------------

Most of these "wealthy retirees" are looking aghast at their children's opportunities. My brother-in-law's parents may own 3 houses, but they were complaining to me about their daughter's inability to find a house in this current market.

They care far, far more about their daughter finding a good house and starting her family, than the value of their 3 houses. And I bet many, many, many other families are in the same situation. (Rich/Wealthy retirees scared for their children / grandchildren).

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

#65

Post by skywhopper »

bovermyer wrote: post #20

I 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.

Not true at all, there are plenty of small-to-mid-sized cities with good Internet (fiber even!) where you can buy a 3 bedroom home in good shape for well than that. Topeka, Dayton, Peoria, Paducah...

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

#66

Post by ta1243 »

dragontamer wrote: post #30
Analemma_ wrote: post #23

Earlier quoted context omitted.

> 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…

> 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. So the question is if the wealthy can remain wealthy, or if the poor can get houses? I'm sorry, but... as a Catholic the choice is obvious to me. Blessed are the poor, etc. etc. We should favor those who don't have…

> I'm sorry, but... as a Catholic the choice is obvious to me

In the UK the 13th largest landowner is the church. If it used its lands to build at average density of Hackney it could house 2.5 million people.

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

#67

Post by ta1243 »

ToucanLoucan wrote: post #61
Analemma_ wrote: post #23

Earlier quoted context omitted.

> 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…

We have to start somewhere. We have people who say that we can't demolish houses as investments because it's one of the few remaining holds of generational, familial wealth left. And that's true. But we also don't have enough housing, and building more housing will naturally devalue the housing that exists. That's also true. But we can't simply let this keep going. There are people who can afford those homes: private…

> We have to start somewhere. We have people who say that we can't demolish houses as investments because it's one of the few remaining holds of generational, familial wealth left.

Why would we want that? My great great grandfather was luckier than yours, and that's why I live like a king and you clean my shoes?

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

#68

Post by skywhopper »

chmod600 wrote: post #48
soggybread wrote: post #15

I'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 w…

Doubling or even tripling in ten years is not a ridiculous rate of growth.

That’s 7-10% price growth per year. How is that not ridiculous?

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

#69

Post by lucidguppy »

soco wrote: post #29
lucidguppy wrote: post #12

Feedback 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 - i…

Healthcare and education are prestige items around there? Did I get this correctly?

Yep: Read it in here https://en.wikipedia.org/wiki/The_Elephant_in_the_Brain

Medicine shows that others are going to bat for you to keep you alive.

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

#70

Post by hotpotamus »

willis936 wrote: post #50
Analemma_ wrote: post #23

Earlier quoted context omitted.

> 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…

>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. As someone staring down never having the ability to get into that club: that's a price I'm willing to pay. In fact I'm willing to pay much more than that. This is the issue that dictates my vote.

I don't think I follow - which club are you not getting into, retirement or home ownership? Because if you don't have a home, then you aren't the one paying if the value decreases.
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