Ah I love that last paragraph. The good news is you can always move to Mono County, a place with no economy or population to speak of. Simply move to Bridgeport.
People who own houses in expensive coastal markets can't easily be dislodged. We can't force them to put their houses on the market or adopt reasonable prices. The rental market, however, is a quite different thing. I track the rental market in Berkeley very closely and while rents have been steadily declining since 2019, in the past few months they have been plummeting. Current market price for older 1-bedroom apartments has fallen back to 2009 levels. Almost sort of affordable.
I have a feeling that a lot of small-time landlords who thought they were signing up for a lifetime of "passive income" are getting kicked in the teeth right now.
This is great. If you update or do more like this in the future it would be great to have 2 additional things: n counts, and variance/sd. I might worry that for example the high water mark in 2020-2021 had a much smaller n count and if the stats were more people weighted the decline would be less meaningful. In other words if only one tenant rented at the peak year in some very outlier luxury unit, and then next year 1000 tenants came along and rented more typical lower priced units, it would look like a decline. But it’s not a real decline, if that makes sense? I also wonder if (strongly suspect) the temporary eviction ban could be considered a temporary price increase that has now been removed, so the decline you note is not a real decline for that reason, but a reversion of public policy that directly impacted prices for a year or two then vanished. Thank you for doing this!
People love to shit on Texas (often rightfully, IMO) for their nutty laws, but I think TX got it right here. TX has no state income tax but very high property taxes (e.g. 2.5% in some jurisdictions).
A thing people object to in that regime is the tax burden of a median family is pretty high. The California state income taxes of a median household are about zero. Under a high property tax rate, everyone owes an amount that seems significant to them.
Or better, land value tax. Improving the property is great and we should incentivize that! Benefiting from everyone around you improving their property while you do nothing, not so much!
Eh, not really. Every single housing issue is because of real estate speculation. Turning housing into an investment vehicle vs. a depreciating asset that people live in is where all the problems arise from, including Proposition 13.
Funnily enough, one of the biggest problems this state has is Prop 13. It's hard to repeal, although we've had 40~ years to fix it.
> Passage of the initiative presaged a "taxpayer revolt" throughout the country that is sometimes thought to have contributed to the election of Ronald Reagan to the presidency during 1980.
Prop 13 was an effect, not the cause. The cause was and remains a lack of housing supply. Prop 13 was a knee jerk reaction to skyrocketing property values in the 70s caused by (among other things) policy (largely NEPA and CEQA) that was weaponized to make it ever more difficult to build.
Yes, I wouldn't say it's the biggest problem. But it has created a serious block against housing liquidity. Something that protects seniors and those on fixed incomes from losing their homes is good - lots of states have laws like that - but prop 13 is fatally flawed.
I’ve seen quotes that something like 40% of all California politics revolve around prop 13. The promise your parents aren’t going to lose their house from arbitrary reassessments is a strong one (instead it will because they can’t afford medical bills). Prop 19 (2020) at least put a dent when it came to multi-home ownership and inheritance.
https://www.youtube.com/watch?v=ExgxwKnH8y4
If only Californians didn't actively try to stop construction. If you want to build housing and that will cast a shadow on a nearby playground, that's no good.
California is literally the worst and most expensive place to develop anything.
Title is misrepresents what the report says. The report says that 15% can afford the *median* priced home, not "afford a home". 15% isn't good, not is bad as the article suggests.
It’s even more deceptive as it’s quoting for a single family detached home. Condos are nearly twice that affordability metric. Again, the median, meaning half the condos available are more affordable than that median.
I think when most people, especially urban dwellers, think of as a “home” as a primary residence, and don’t constrain it to single family detached housing.
It depends on the condo how much. But usually millage and values for tax purposes are often less than houses. I’ve not done the fully loaded math, but I would expect including maintenance and other expenses condos are less per month than an equivalent priced house.
I don’t think it’s unfair to expect that a person making the median income can afford a Single Family detached home.
This is the definition of the American Dream.
The USA has an abundance of space and natural resources. California is a big place. There’s no technical reason homeownership should be out of reach. If you want to live and die in an apartment, that’s great, but it should be a choice.
A dream and fairness don’t have a lot to do with each other? Maybe a noble goal, but the goal may not be attainable.
You can buy land for cheap in rural areas of California and build a house there for less than this quoted median (substantially so). But where will you work? Your kids, where do they go to school? Want a latte? Learn to make your own I guess, and appreciate the hour drive to the store.
California has many reasons not market related for its situation. But people want to live in the cities because they offer services hard to literally impossible to get in the rural areas (like high speed internet?).
If population keeps growing the American dream will be a memory. That’s sad, I admit. I don’t like this. But it’s the reality of limited space proximate to desired services.
Ok lets pretend we run the universe instead of having to deal with inconveinient things like organic choice. Can't we take some pressure off cities by requiring jobs that can be done remotely to be able to be done remotely and requiring employers to equally consider remote workers located anywhere? Furthermore lets imagine we are looking at 10% more people is it absolutely necessary that they be distributed the same way they are now? Wouldn't it make sense for some smaller cities to expand and become worthwhile competition to our present largest cities?
There are many rural and suburban schools far from CA population centers that dramatically outperform schools in denser population areas. I live in one such area.
As for lattes, I don’t know what to say. If access to overpriced bean-milk is actually a driving factor in one’s choice of where to live, that’s a problem I’m not going to try to solve on HN.
So you are planning on deciding ahead of time where to put folks and you have a small city of Smallville with lots of room to expand and 100k people and Megalopolis with 5M with water on all sides and nowhere to go up save bulldoze the already tall buildings and build taller ones.
You don't think that one could theoretically with 1M people's taxable income produce good enough schools to educate folks in the plethora of land available near Smallville.
Logically this isn't the sims what actually happens is that Megalopolis gets relatively much more expensive to live in than Smallville driving investment and folks who can't afford $5000 a month in rent to locate themselves there. Note I'm talking about other metro areas not in the woods in rural Idaho.
The relative availability of remote work, government locating offices outside of existing metros, tax breaks, major public works could all be factors in making this easier rather than harder but the process is all but inevitable given that current metros seem unlikely to be able to expand indefinitely
It is the second lowest number in the country, but I always find articles like these a bit of a contrast compared to the actual home ownership statistics.
I wonder if there’s some measure to forecast this, though: if the median age of a homeowner is x years (and the trend is aging), then in y years, half the currently owned houses will have changed owners. What are the values of x and y?
The thing we want to measure and address is affordability for new buyers, not current ownership. Addressing the former will increase the latter, because the latter is a lagging indicator of affordability (which, again, is what we want to measure)
50% of Californians live in an owner-occupied home. That's what the weirdly named "home ownership rate" measures.
Move back in with your parents? Rent a room from a live-in-landlord because you can't afford your own place? Congrats, you are a "home owner" according to that number!
> We define an owner as someone who3 A TERNER CENTER RESEARCH PAPER - MAY 2023both (1) lives in an owned home and (2) is the householder or spouse of the householder
In short in 2021 California's homeownership rate was 44.7%
At the age of 25-35 when one at one point might have been expected to get a cheap "starter home" It's actually 15.5% 35-45 when people are well into the prime of their earning years its 39%.
Most of us are stuck renting apartments owned by giant greedy corps or houses owned by older people who bought in when it was still possible for more average folks to do so. As prices go up look to see that growth in income sustained by renting out more properties by the room instead of by the building something already evident in higher priced markets like urban settings.
I for one look forward to 70 year olds try to justify why a singular house is pulling in 45% of the income of each of the 5 residents renting rooms there by pointing at the medical industry which is busy siphoning off most of that money which everyone is super excited about since it now is projected to help them live to 90 despite their bad and unhealthy lifestyle.
Helping the young people get started will mean the family gets money together to cover the room deposit so they can move down the hall. It will I'm sure be lovely.
What that means is that significantly more Californians are trying to buy a home compared to what is available as inventory. If you somehow "reset" the price to some arbitrarily "low" level, it would immediately get bid back up to what it is today.
On the other hand, if you somehow flooded the market with thousands of homes and there were fewer buyers than that, the price would plummet.
We need to continue to build more, affordable housing in desirable areas near public transit, and break the current cycle of the same companies buying as building.
People act like this is some wild new idea rather than the way every city in human history worked until around 1970 when Americans realized blocking new housing was a way around the Supreme Court’s then-recent ban on overtly discriminatory housing policy.
Vertical is the answer. California needs to get over it's aversion to high rise apartments and invest a in flourishing downtown residential system instead of relying on a 1950's mindset of home ownership.
The current system is deliberately exclusionary and self preserving, but it will also fail the state in the long run. That, sadly, seems fine to many people.
People also need to learn that vertical doesn't mean high rise apartments. There's a big gap between single story detached houses and high rise apartments. Townhomes, condos, row houses, and so on can all fill that gap.
Vertical still means “close proximity to neighbors” which is what a lot of people object to when it comes to urban living. I will never again voluntarily live in a building with a shared wall or ceiling.
Same here. This is exactly what I don't want. Sure you can cram a lot more people into a smaller space and make it cheap if you want, but it causes more problems than it solves. Maybe in some futuristic utopia this would work, but not in this reality.
I do not see that happening in California without some virtually magical building material. California is wary of earthquakes, noise, toxics, fire, and crime. Perhaps other states will create cheap high density paradises to suck the population away.
It’s true that space is limited but there’s no reason to believe that we have used up so much of it that there’s no more left and we have to reduce our existing land use.
Every human and human created thing on the planet undoubtedly takes up a tiny fraction of the earth’s surface, even if you exclude oceans.
I am, of course, open to seeing any facts that you have that demonstrate there is no more room left on the planet for additional housing.
It’s not just about housing. It’s also about other resources like food, wood, etc. Animals species are going extinct, deforestation, etc. All because there are too many people on this planet. Proof is everywhere.
> Ahh… planet earth has limited amount of space. We need less people instead.
We have plenty of space. Plenty of resources to support some multiple of our current population. We really need to just be more efficient and less impactful on ecosystems. Totally possible, but difficult.
The problem specifically is that people like living in cities because that's where all the opportunity is. And cities are still growing.
If that isn't addressed, fine, then that means the only solution is to plan and zone for higher density.
If the qualities that make large metros pleasant places to live are distributed more evenly across the whole of a country, such that places in the "middle of nowhere" are desirable, then the current affordability crisis wouldn't be so dire and we wouldn't need to be forced to make drastic changes in policy.
The thing that makes it more desirable IS other people and the inherent economy in being able to reach so many more of them in the same area. These areas tend towards being areas that are presently near hubs of travel and transportation something that has been true for thousands of years. None of this is going to change.
House prices are definitely not dropping in my city, even though housing supply is going up about 2.5% per year (urban sprawl in outer areas, plus some densification). Christchurch, New Zealand.
I think because immigration grows NZ population fast enough to absorb the new housing.
No. Just put the houses somewhere in California away from SF/LA, and you wouldn’t need too many to satisfy demand for people willing to live away from those two areas.
Or, if you adjusted demand, prices you fall. The 30 yr mortgage was supposed to make homes more affordable. Instead, like higher edu, cheap and easy loans have driven prices up, up, up.
I'm not sure what the solution is at this point. But it seems to be a bit of both...more inventory, and less demand.
You can't really reduce housing demand in any way that would be good. People would effectively need to be poorer. It's always been a supply issue. It's always been hard to solve because the supply is controlled locally and no single area can put a dent in the actual problem. It's the reverse of the tragedy of the commons. And it can't be solved until zoning is done at a state/national level.
> You can't really reduce housing demand in any way that would be good.
You can, especially locally. For instance, if you normalize remote work in society to the extent that a significant portion of people won't feel any strong need to cram into massive metropolises just to be able to get a job with which to support themselves, you'll reduce the housing demand in those metropolises somewhat and distribute that demand over the nearly endless rural areas and small towns of $YOUR_COUNTRY instead, where the supply of land on which to build on massively overshadows that of metropolises.
Well, you can't really increase demand in a way that's good either. We're seeing that. But the only way to fix the Ponzi Scheme is...more Ponzi Scheme?
40 year mortgages? 50 year mortgages? The promise that these make homes more affordable is a lie.
The root problem is, "leadership" (i.e., politicians and financial institutions) have sold people the idea that a home is an investment first, and a place to live second. When you buy into this paradigm - and *many* have - then the system is all but obligated to act in ways to drive up prices. If we *really* want "affordable housing", we're not going to get that from the current lie. What part of this insanity don't people understand?
Everyone being richer is a way that is good. Imagine everyone woke up tomorrow 50% more productive. Think through the bundle of goods people tend to buy, which ones are quite elastic over a reasonable amount of time (and those that are quite inelastic), and you'll come to the conclusion it's better, overall.
This would actually be economically devastating both in the short and long term. Lets say you could Thanos snap them out of existence. millions of jobs would go unfilled instantly and for a very long term. Industries and companies relying on such labor in whole or in part collapse. The economic ripples of collapsing demand make up for the lack of jobs as we dip into a depression.
Contrary to what people imagine such individuals both create economic value and create demand for goods. They also render tenable things like social security which work best with a slowly expanding population and completely implode with a collapsing population which we would in fact have at present birth rate.
It's also foolhardy to imagine that America is somehow "full" when our population density is actually a tiny fraction of actually densely populated countries.
What you are saying is that without a lot of activity that the USA has made illegal, the USA cannot function properly. Like there is a shadow economy that you cannot live without. Is there a partially blinded eye turned to this by the government then?
More people per house can often be a clusterfuck. Even people who are very amenable to each other are liable to develop friction in a small space. Then then there are people's inherently divergent plans depending on family, life, and jobs. The need for people who you would share space with to also pass credit/background checks. Then there is the increasing chance of economic challenges that comes from combining what would normally be multiple households.
Instead of the stereotypical 50s where you worry about one person losing a relatively stable job you now have 4-5 unstable incomes where the lose of one may endanger the economic stability of the household. Like a raid0 with increasing number of drives.
A famous trope in comedic premises is the friction between in-laws and spouse but this has absolutely obvious deep roots in real dynamics. Life is infinitely easier when your family and spouse just have to care about one another not live with each-other day to day.
Furthermore most of the apartment stocks aren't suitable in size for such arrangements and most of the single family housing is presently owner occupied or very expensive and or disinterested in renting to a crowd.
This doesn't seem on net a very tenable direction logistically or culturally in the US.
You also decrease demand by making mortgages less easy to get. Again, look what cheap and easy loans did to the cost of higher edu.
The market was manipulated and it responded in kind. The current system is leading to sociopolitical situations that are also undesirable. And yet our only answer is, "Thank you sirs and madames, can we have another?" That's not sustainable.
p.s. Prices can also be lowered by building smaller homes. The problem there is, the larger the home the more furnishings, etc. Larger homes help increase consumption which is good for the status quo.
That doesn't decrease human demand. It will change the price point though. It might make it cheaper and encourage less debt, which is a good thing. But if there is a town with 4 houses and 5 families, then the price of a house could be $100 or $1bn, but there are still 4 houses, and 5 families.
Building smaller homes is good. If you make the small, and put them close together, and sometimes on top of each other you can increase the chance of having a walkable city rather than a drive-only one.
No, it means that interest rates have recently doubled. That's the primary driver of affordability. Typically a house is least affordable when it is first purchased, because it is obtained with a 30 year fixed interest rate mortgage. So, over time, the income of the owner goes up with inflation, but the cost of the house remains the same, making it more affordable over time. Older generations can easily afford their houses, but younger generations need to scrimp for a time.
Is anyone skilled enough with FRED to link to cost of home / annual income since like 1950 to understand what's going on here
Also can you explain how the definition of household income has changed? Was it ever more multigenerational than now (I know it's moved from man to man+woman, but I'm wondering if the idyllic households of the 1950s is actually an unrepresentative sample).
Intuitively the average age of first child was close to 20 in the 1950s which meant you'd have say, 25/45 generational pairs as opposed to today when it's much closer to beginning/end career pairings and certainly in many cultures generational cohabitation is much more the norm than the exception.
Essentially I want to understand the trend of affordability with the context of the conflating social factors
wow! The growth after 2019 is outlandish! I'd like to conclude this is not merely "greedy AUM groups buying up all the housing stock" because that's the X factor but I can't for the life of me think of a social factor which can normalize that trend (such as say, increasing longevity, net migration, etc.)
> In 1995, my dad bought a house in Southern California for $550k. He was able to afford that on a $150K salary and my mom did not work.
> Today, that house is just under $3M. In order for me to afford that house today, I would have to make around $600K.
So, a house that you could afford on a 95th percentile household income (about 5× median) in 1995 takes about a 98th percentile household income (about 8× median) today?
Not seeing a lot of significance here.
> Housing "market" is not a market.
Some things having demand increaae more than supply doesn't make then “not a market”.
$150K in 1995 is ~$300K in 2023 dollars. See the significance now?
> Some things having demand increaae more than supply doesn't make then “not a market”.
A market that benefitted from the downtrend of interest rates to ZIRP, PPP "loans" (more like grants), investors (which make up 20-30% of buyers, though they make like 1% of owners), and a Fed with $8.2 Trillion on balance sheet, is not what I would call a functioning market.
Questions worth contemplating - if all the post covid stimulus did not happen, what would have happened to the housing market? And what would have happened to the economy? Shouldn't the rate of increase in income track with rate of increase in house prices?
108 comments
[ 2.7 ms ] story [ 179 ms ] threadOh that's interesting.... What year came after 2007?
I have a feeling that a lot of small-time landlords who thought they were signing up for a lifetime of "passive income" are getting kicked in the teeth right now.
The key graph is https://observablehq.com/@jwb/berkeley-rent-board-data#cell-...
At the very least we could stop sinking tens of billions of dollars every year into tax cuts that essentially force them to never sell.
Every single California housing issue is because of Prop 13.
They also have an incentive to drive up their own property values via NIMBYism.
Maybe prop 13 should be repealed so that all of these greedy people can pay their fair share of property taxes on their inflated property values
> Passage of the initiative presaged a "taxpayer revolt" throughout the country that is sometimes thought to have contributed to the election of Ronald Reagan to the presidency during 1980.
The things we do to make housing expensive goes on and on...!
I think when most people, especially urban dwellers, think of as a “home” as a primary residence, and don’t constrain it to single family detached housing.
This is the definition of the American Dream.
The USA has an abundance of space and natural resources. California is a big place. There’s no technical reason homeownership should be out of reach. If you want to live and die in an apartment, that’s great, but it should be a choice.
You can buy land for cheap in rural areas of California and build a house there for less than this quoted median (substantially so). But where will you work? Your kids, where do they go to school? Want a latte? Learn to make your own I guess, and appreciate the hour drive to the store.
California has many reasons not market related for its situation. But people want to live in the cities because they offer services hard to literally impossible to get in the rural areas (like high speed internet?).
If population keeps growing the American dream will be a memory. That’s sad, I admit. I don’t like this. But it’s the reality of limited space proximate to desired services.
As for lattes, I don’t know what to say. If access to overpriced bean-milk is actually a driving factor in one’s choice of where to live, that’s a problem I’m not going to try to solve on HN.
You don't think that one could theoretically with 1M people's taxable income produce good enough schools to educate folks in the plethora of land available near Smallville.
Logically this isn't the sims what actually happens is that Megalopolis gets relatively much more expensive to live in than Smallville driving investment and folks who can't afford $5000 a month in rent to locate themselves there. Note I'm talking about other metro areas not in the woods in rural Idaho.
The relative availability of remote work, government locating offices outside of existing metros, tax breaks, major public works could all be factors in making this easier rather than harder but the process is all but inevitable given that current metros seem unlikely to be able to expand indefinitely
https://ipropertymanagement.com/research/homeownership-rate-...
It is the second lowest number in the country, but I always find articles like these a bit of a contrast compared to the actual home ownership statistics.
Many people in California own their homes because they bought them a long time ago and held on.
Home ownership is the present indicator of home ownership.
Move back in with your parents? Rent a room from a live-in-landlord because you can't afford your own place? Congrats, you are a "home owner" according to that number!
https://ternercenter.berkeley.edu/wp-content/uploads/2023/05...
> We define an owner as someone who3 A TERNER CENTER RESEARCH PAPER - MAY 2023both (1) lives in an owned home and (2) is the householder or spouse of the householder
In short in 2021 California's homeownership rate was 44.7%
At the age of 25-35 when one at one point might have been expected to get a cheap "starter home" It's actually 15.5% 35-45 when people are well into the prime of their earning years its 39%.
Most of us are stuck renting apartments owned by giant greedy corps or houses owned by older people who bought in when it was still possible for more average folks to do so. As prices go up look to see that growth in income sustained by renting out more properties by the room instead of by the building something already evident in higher priced markets like urban settings.
I for one look forward to 70 year olds try to justify why a singular house is pulling in 45% of the income of each of the 5 residents renting rooms there by pointing at the medical industry which is busy siphoning off most of that money which everyone is super excited about since it now is projected to help them live to 90 despite their bad and unhealthy lifestyle.
Helping the young people get started will mean the family gets money together to cover the room deposit so they can move down the hall. It will I'm sure be lovely.
On the other hand, if you somehow flooded the market with thousands of homes and there were fewer buyers than that, the price would plummet.
Demand is so much greater than supply almost everywhere in the US.
I’m not familiar with an builders who are interested in holding properties any longer than necessary.
Yes. It would. And we need to build them.
If need to build then we need to build vertically.
The current system is deliberately exclusionary and self preserving, but it will also fail the state in the long run. That, sadly, seems fine to many people.
https://en.wikipedia.org/wiki/List_of_tallest_structures_in_...
Every human and human created thing on the planet undoubtedly takes up a tiny fraction of the earth’s surface, even if you exclude oceans.
I am, of course, open to seeing any facts that you have that demonstrate there is no more room left on the planet for additional housing.
We have plenty of space. Plenty of resources to support some multiple of our current population. We really need to just be more efficient and less impactful on ecosystems. Totally possible, but difficult.
If that isn't addressed, fine, then that means the only solution is to plan and zone for higher density.
If the qualities that make large metros pleasant places to live are distributed more evenly across the whole of a country, such that places in the "middle of nowhere" are desirable, then the current affordability crisis wouldn't be so dire and we wouldn't need to be forced to make drastic changes in policy.
It really isn't.
Demand is so much greater than supply in the places you want to live, not in the places I want to live.
On the other hand, if you want to move to Detroit or Philly…
I think because immigration grows NZ population fast enough to absorb the new housing.
I'm not sure what the solution is at this point. But it seems to be a bit of both...more inventory, and less demand.
You can, especially locally. For instance, if you normalize remote work in society to the extent that a significant portion of people won't feel any strong need to cram into massive metropolises just to be able to get a job with which to support themselves, you'll reduce the housing demand in those metropolises somewhat and distribute that demand over the nearly endless rural areas and small towns of $YOUR_COUNTRY instead, where the supply of land on which to build on massively overshadows that of metropolises.
40 year mortgages? 50 year mortgages? The promise that these make homes more affordable is a lie.
The root problem is, "leadership" (i.e., politicians and financial institutions) have sold people the idea that a home is an investment first, and a place to live second. When you buy into this paradigm - and *many* have - then the system is all but obligated to act in ways to drive up prices. If we *really* want "affordable housing", we're not going to get that from the current lie. What part of this insanity don't people understand?
* More people per house
* People leaving the state
* More homeless
* Long term: lower the birth rate
* Increased death rate
None of which are desirable. The first might be OK because it might bring families together and make people more social.
* Stopping illegal immigration and repatriating all illegal residents within the U.S.
which is highly desirable.
Contrary to what people imagine such individuals both create economic value and create demand for goods. They also render tenable things like social security which work best with a slowly expanding population and completely implode with a collapsing population which we would in fact have at present birth rate.
It's also foolhardy to imagine that America is somehow "full" when our population density is actually a tiny fraction of actually densely populated countries.
Instead of the stereotypical 50s where you worry about one person losing a relatively stable job you now have 4-5 unstable incomes where the lose of one may endanger the economic stability of the household. Like a raid0 with increasing number of drives.
A famous trope in comedic premises is the friction between in-laws and spouse but this has absolutely obvious deep roots in real dynamics. Life is infinitely easier when your family and spouse just have to care about one another not live with each-other day to day.
Furthermore most of the apartment stocks aren't suitable in size for such arrangements and most of the single family housing is presently owner occupied or very expensive and or disinterested in renting to a crowd.
This doesn't seem on net a very tenable direction logistically or culturally in the US.
The market was manipulated and it responded in kind. The current system is leading to sociopolitical situations that are also undesirable. And yet our only answer is, "Thank you sirs and madames, can we have another?" That's not sustainable.
p.s. Prices can also be lowered by building smaller homes. The problem there is, the larger the home the more furnishings, etc. Larger homes help increase consumption which is good for the status quo.
Building smaller homes is good. If you make the small, and put them close together, and sometimes on top of each other you can increase the chance of having a walkable city rather than a drive-only one.
Also can you explain how the definition of household income has changed? Was it ever more multigenerational than now (I know it's moved from man to man+woman, but I'm wondering if the idyllic households of the 1950s is actually an unrepresentative sample).
Intuitively the average age of first child was close to 20 in the 1950s which meant you'd have say, 25/45 generational pairs as opposed to today when it's much closer to beginning/end career pairings and certainly in many cultures generational cohabitation is much more the norm than the exception.
Essentially I want to understand the trend of affordability with the context of the conflating social factors
In 1995, my dad bought a house in Southern California for $550k. He was able to afford that on a $150K salary and my mom did not work.
Today, that house is just under $3M. In order for me to afford that house today, I would have to make around $600K.
Housing "market" is not a market.
> Today, that house is just under $3M. In order for me to afford that house today, I would have to make around $600K.
So, a house that you could afford on a 95th percentile household income (about 5× median) in 1995 takes about a 98th percentile household income (about 8× median) today?
Not seeing a lot of significance here.
> Housing "market" is not a market.
Some things having demand increaae more than supply doesn't make then “not a market”.
$150K in 1995 is ~$300K in 2023 dollars. See the significance now?
> Some things having demand increaae more than supply doesn't make then “not a market”.
A market that benefitted from the downtrend of interest rates to ZIRP, PPP "loans" (more like grants), investors (which make up 20-30% of buyers, though they make like 1% of owners), and a Fed with $8.2 Trillion on balance sheet, is not what I would call a functioning market.
Questions worth contemplating - if all the post covid stimulus did not happen, what would have happened to the housing market? And what would have happened to the economy? Shouldn't the rate of increase in income track with rate of increase in house prices?