Americans don't believe middle class can afford homes

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.

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.

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 finally back to more historically normal and healthy interest rates, and it has broken the housing market.

We're going to have to have a cultural shift towards housing as shelter, not investment. We have to increase supply to meet demand. And we're going to have to pay more attention to driving down the actual dollar cost of homes, not just the monthly payment.

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.

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 CoreLogic Case-Shiller U.S. National Home Price Index) considers the cost mortgage interest rates, so the actual cost of ownership is even higher (relative to a low interest rate environment) than this data shows.

The Home Price to Personal Average Income Ratio is a bit different, but tells the same broad picture.