lawtig02
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Spoken like someone who watches Fox News 24/7.
Meanwhile on Fox News … and other right wing media
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Without knowing the makeup of the survey respondents, I’d think the urban/rural divide likely impacts the results. Young urbanites have exposure to a broader, more diverse, dynamic and expensive lifestyle.
This statistic isn't as damning as it seems. At market equilibrium, one would expect that 50% of Americans couldn't afford the median price of a home. The fact that the cutoff is 70% indicates that the subset of potential homeowners likely eliminates lower income households, which has been true for generations.
In fact, I doubt that this statistic has moved much over the years. What has moved is that the middle class is spending way more of their income on housing than ever before, which is a function of the rental market as much as the homebuying market.
lawtig02
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One of the great mysteries of the 2025-2030 time frame, when the histories are written, will be why Republicans decided to fuck black and brown Americans in the ass as soon as those communities started showing interest in the Republican Party.
The answer, of course, will be systemic racism, but in my more optimistic moments, I look forward to the reckoning of Republicans such as Ram on these types of things.
The answer, of course, will be systemic racism, but in my more optimistic moments, I look forward to the reckoning of Republicans such as Ram on these types of things.
Mulberry Heel
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The article also mentions that the average age at which people buy homes is now 38, when in the 1980s it was 29 and just a few years ago it was 35. I think that's a pretty clear sign that there are some real problems going on with home affordability for younger people right now. No doubt cultural changes have played a part, but I think it's just whistling past the graveyard to pretend that there are not serious affordability problems for many younger people in buying a home or even renting an apartment right now. There are also articles on some people choosing to live at home longer with parents due to affordability issues with renting or buying a home as well.
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Why would one expect that 50% of Americans couldn’t afford the median price of a home at market equilibrium?
I agree with you, but the statistic you quote doesn't make the point.
In an even distribution of home prices, the fact that the median house price was affordable to 50% of the market would indicate pricing efficiency.
I think the problems are more caused by (a) an increase in housing prices means that down payments have to be larger, which delays home buying until you are older (b) interest rate increases over the past three years have increased housing costs while also diminishing supply and (c) the rental market has risen dramatically, making it harder to save to buy a new home.
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I think a big part of housing affordability is young people carrying huge college debt. A generation ago (or maybe two generations....I'm old) young people could afford to take on a mortgage because there weren't saddled with a mountain of college loans.
But I also think young people today have become accustomed to a more expensive lifestyle, and are unwilling to cut back on their social lives to get into a house. They have very specific neighborhoods in which they want to live and surprise!...they can't afford them. Most people forever (or maybe actually since WWII) were not able to afford a house in their neighborhood of choice for their starter home. So you compromised. You bought a house 30 miles out of town and put up with a 45 minute commute to start building equity and begin to climb the housing ladder.
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It wouldn't mean that at all. There's nothing to suggest that with an even distribution of home prices that the top half of the market wouldn't be affordable in an absolute sense to only half the potential market.
Extend that same idea to any other mass-purchased good and you'll see why it isn't accurate. We'd never think that the median price of a car (or an iPhone or a cupcake) would only be affordable in an absolute sense to half the potential market.
And it's even worse when you realize that 70% (rather than 50%) cant afford such a house, which certainly shows that the housing market is significantly out of equilibrium. (There is a little concern in the statistics shown about average vs median home prices and the time period surveyed, but I'll gloss over those for now.)
You can't compare housing to other consumer goods. It is typically a household's largest purchase and doubles as both an investment and consumption. Households typically buy up to what they can afford to maximize their investment.
I don't own a Mercedes not because I can't afford one but because I don't want one - yet when we purchase our first homes, we often buy the one at the highest price we can reasonably afford.
And for purposes of this discussion, median vs. average is the right metric.
I don't own a Mercedes not because I can't afford one but because I don't want one - yet when we purchase our first homes, we often buy the one at the highest price we can reasonably afford.
And for purposes of this discussion, median vs. average is the right metric.
Upon further reflection, I stand corrected on my earlier comment. 70% unaffordability for a median home is only price-efficient if you exclude the bottom 38% of households. Most of us would agree that the benefits of homeownership kick in way below that 38% figure. Therefore I'm incorrect when I claim the statistic doesn't prove your point.
superrific
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What is the basis for this statement? 50% of Americans will earn less than the median income but that isn't the same thing. How is this different from saying at equilibrium, 50% of Americans can't afford a case of beer?
superrific
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I think this is unlikely to be true. I think it is more of a question of values and fears. If you live in rural America, what the fuck you gonna do besides have kids? If you live in urban America, having kids can cramp a lifestyle. Younger liberals live in cities. And liberals are more likely to fear the future, thus disinclining themselves to spend their prime years changing diapers
superrific
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This is not remotely true. Even if it was, though, it wouldn't tell you anything about the skew of the price distribution, which impacts your claim (i.e. you're assuming a symmetric distribution around a median, likely with a bell-shape in mind)
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I agree that college debt is a huge issue for one segment of younger folks looking to purchase housing, but it's not enough of an issue with housing overall or you'd see young folks who don't go to college being able to purchase houses at the same younger ages we saw for past generations.
I also don't think that the biggest issues with housing affordability are either "lifestyle choices" or only being willing to live in specific neighborhoods. What we know is that when you look at income vs inflation over time, the cost of living based on essentials (the basics of life) has gone up (and, perhaps, to some extent, what is considered the basics as also increased). So that is one input into the issue. But younger folks deciding to move out to the suburbs wouldn't solve the housing crisis as all that would do is increase prices for those homes and then the folks who live there now would be pushed out of housing that they can afford, it wouldn't solve the housing issue it would merely swap out who owns and who does not.
There is an issue with availability of housing based on location, but it is more about being able to build enough housing (and the needed accompanying infrastructure, like roads) close enough to urban centers for commutes to be reasonable to where suitable jobs are located, not about specific neighborhoods being desirable or not. You can certainly build a lot of housing at an affordable price out in the Middle of Nowhere, NC; but very few people will want to live there if there aren't good jobs in sufficient numbers to accompany those houses.
The biggest issue with housing right now is (1) a lack of available housing altogether within the housing system, (2) the difficulty in creating new housing in significant numbers near urban areas where the majority of folks have available jobs, and (3) the lack of affordable housing within those areas due to market incentives for builders (namely, that when you know that nearly every new house built in a halfway desirable area will sell, it makes sense to push up the price with add-ons that are highly profitable).
Note: I'm choosing to ignore real estate investing that pulls available housing from buyer-oriented to rental-oriented, but that's also a problem in many areas.
Housing availability is a systemic issue, it's not - on a mass scale - an issue of buyer choice.
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Sounds pretty rational, to me.
Part of the "Do as I say, not as I do" crowd.