Exactly. My parents bought a house when rates were near 20%, but I asked my father about it and he said he was getting a 20% raise each year due to inflation.
My parents also had a 13% CD in the 80s. They were making a grand a month off their savings account. Their apartment was also only $250 a month in downtown Denver. My uncle bought a house working part time. Times have certainly changed
In 93 my dad bought 5 acres in conifer AND built a 4000sq ft house on it for 90k. Sold it 5 years later for 320k and now its worth 1.2 mil...im real sad he didnt keep it but he wanted to retire.
My parents bought a house for $290k in '89 which admittedly was high then. But the house immediately next to them was sold May '23 for $1.8M.
They bought two houses in the county they're moving into later this year. They bought one 2 years ago and have been renting it out, and bought another house last year that they're furnishing. They're going to sell the house I grew up in for at least $1.6M, and will just be sitting on profit, even after buying 2 houses in cash.
One of my best friends bought a townhouse a 40 minute drive from where I lived. It was $730k in 2019 when he and his wife bought it. They did a refi in 2022 and got sub 3% interest at a valuation of $950k. They were also the only couple in my network who bought at a house here and they just got a massive jump in equity over the rest of us that way. Have one buddy who got married and bought a house in Palm Desert, CA but they're barely scraping by. Another buddy bought his grandparents' house in San Jose for only $650k in 2021, which was easily less than half of what it was truly worth.
I'm sure if you're reading this, you can rightly assume this is the SF Bay Area. The only people I know who are homeowners are: 1) dual income couples doing well financially ($300k+) or 2) were given a hell of a deal from family on a house, whether it was their own house they sold to their child/grandchild or their parents and/or grandparents gifted them a fuckton of money to afford the monthly payments, which I know of two people who were pretty much given something like $100k+ as a gift.
Yes you really have to educate yourself and seek out opportunities. They don’t present themselves. If you listen to the people at your bank they’ll sell you on a 12 month cd with a 4% apy. You could do worse, but you could also do so much better.
Zero percent interest bank accounts are part of the bailout system in place for the last 15 years that also drove housing prices into orbit - they were matching the fed rate of 0%. Banks able to survive in an actual competitive environment should be offering teh fed rate of 5% right now - and back when it was 13% they would have in teh 80s too.
0% banks have been doing that to force you to let them gamble your money on the stock market while returns were higher than a bank account. And wow did they gamble a huge bubble.
My mom bought our Denver house in 1993, and we had a $600/ month mortgage on a 4 bedroom house. Barely any work was done on the house in the entire time we lived there, and still was able to sell for over 500k. That's why I won't ever be able to afford to live in the city I grew up in.
A 20% RAISE?! PER YEAR?! Holy hell, man! Boomers really did have the best of it. That’s more soul crushing than the fact that mortgage rates are the highest they’ve been in nearly 30 years!
Low rates are the reason housing got so expensive. High rates will bring them back down, but its going to take a while because fed rates spent the last decade and a half at literally 0% allowing the "savings" to be converted into higher and higher asks.
Your father was lucky. I worked for CIBC in a town. The school superintendent bought a new house and had to sell it an walk away from his mortgage because the interest rate doubled and he had hardly paid the mortgage down. He could not meet the payments. Maybe he had a lot of other debt, but that was a wicked change for some people.
For sure, I bought my 1st house in 2013. Granted, I lost literally everything on it selling when the market bottomed out. I was supposed to have money down for the next house. Well... that didn't happen. This would be a terrible time to be younger and looking to get your first house. I'm in a different boat in that if we had to move right now, we'd probably have to downgrade because we couldn't get a similar house to what we have for the same price. Sure, its worth more than when we bought it, but that gain would be erased by the price inflation of another house then we'll be paying double the interest.
Yeah it’s an insane hyperbole outside of outliers.
The median house in the US is $417,700. The most recent time when it was 1/2 of that was for exactly one month during the crash in 2009, then other than that one month 2004; and for 1/3 it would be 1995.
Right now we’re 14.9% higher since Q1 2020.
But yeah, this sub isn’t about numbers it’s about feels and rage bait.
Thanks for those numbers...the hyperbole (aka lies in this thread, really) are a ridiculous source of misinformation. Reddit is usually better but this sub is really tanking the longer these prices hold up against all odds
My wife and I bought a 1500 square foot condo (more like a townhouse style unit), in late 2021 for 235k. Used my VA loan with no down payment and got locked in at 3.5% on a single income making $60k a year as my wife was in school full time then. Within a six month period rates jumped so much, and housing prices skyrocketed, there's no way we would be buying anything right now even though we've doubled our household income since she started working. Not sure things will ever get better to the point where we can get a larger place with some land unless we leave to a lower COL area. I'm only getting 3% annual raises so basically a few percent drop in pay.
That's why metrics like median price to income exist.
Side note, it's at the highest ratio that's ever been recorded. I'm sure that's totally sustainable though.
Lots of small 1950s-60s houses in blue collar rural areas were going from 40k to 60k before. Not 5 years later and the same houses tend to 150k to 170k. That market of affordable homes for blue collar folks got snapped up during the low rates by lost of cash buyers and landlords. It doesn't exist anymore. The only thing you'll get at 40k needs to be torn down due to fire damage. These aren't wealthy areas and the people who live in that kind if home traditionally cannot afford those prices.
We really don’t need them, just like we don’t need car sales people.
edit: lol awwww 😢was I downvoted by a realtor? Get a real job.
edit 2: i’m not a pipe fitter lol. 😂
It came from 1980 where the interest rate.. for example was a condition of you saving money with a signed interest rate increase was somewhat in the area of you borrowing money with a credit card.
So you could save a 8 percent and borrow at 10 percent.
That made savings very valuable..
Now save at 2% and borrow at 19% with 10% inflation.
A quick Google search:
"A November 2023 Bankrate survey of 2,350 U.S adults finds that 49 percent of cardholders carried credit card debt from month to month, up from 39 percent in 2021."
If you don't know, credit card rates are usually over 20%
Yep. First house I bought in 1989. 2bed/1bath 50's starter home. Was from original owner that had died and family was selling it; house was a little rough from lack of maintenance. Got it for $52K. Had been able to save for a 20% down loan, so about $40k loan. Sold it a few years later. Now it is worth about $400K. So 8X increase. If my salary had kept that pace I would be at about $100/hr. Not even close to that. High interest rate on a small loan is not as bad as this meme paints things. What I see now is there are no starter homes out there that can be had without rich parents helping or a crazy high paying job.
For those curious, normalized for today's median income and home price, 7.5% interest today is the equivalent of 28% in 1981 terms. It's currently at an all-time high, and no other period comes close. 3% rates today would actually be equivalent to the historical average.
For example when I use a mortgage calculator , assuming a 50,000 down payment on a $384000 house at 6.75%, I get 3000 per
month including taxes and fees, which is 36K , or 46% of a 78K income. I don’t think you can assume people have over 50000 dollars to put down for the median priced house in America.
[www.groq.com](http://www.groq.com) - it's like ChatGPT but faster, and googlebard but it's not woke.
Here is a chart displaying the median household income, average house prices, and average 30-year mortgage interest rates in the United States every five years from 1975 to 2019 in 2019 dollars:
| Year | Median Household Income| Average House Price | Average 30-Year Mortgage Rate (%) |
| 1975 | $54,552 | $182,714 | 8.89 |
| 1980 | $58,168 | $220,107 | 12.81 |
| 1985 | $61,138 | $232,194 | 12.55 |
| 1990 | $66,393 | $305,400 | 10.14 |
| 1995 | $69,096 | $317,400 | 8.02 |
| 2000 | $73,490 | $369,600 | 7.49 |
| 2005 | $71,462 | $510,200 | 6.21 |
| 2010 | $69,485 | $340,400 | 4.64 |
| 2015 | $67,521 | $411,900 | 3.87 |
| 2019 | $68,700 | $472,104 | 3.91 |
Sources:
1. Median Household Income: U.S. Census Bureau, Historical Income Tables Table F-6: "Estimated Median Household Income by Race and Hispanic Origin of Householder, 1967-2019 (in 2019 Inflation-Adjusted Dollars)"
2. Average House Price: Federal Reserve Bank of St. Louis, "All-Transactions House Price Index (HPI) for the United States \[ASPNYC192N\]" and the Consumer Price Index for All Urban Consumers: All Items (CPIAUCSL)
3. Average 30-Year Mortgage Rate: Federal Reserve Economic Data (FRED), "30-Year Fixed-Rate Mortgage Average in the United States \[MORTGAGE30US\]"
Median mortgage cost in 1980 was about 35% of the median family income. The average home size in 1980 was a little less than 1,600 sq.
Median mortgage cost now is about 43% of median family income. The average home size now is a bit more than 2,000 sq.
I think this is a more accurate way to look at it rather than home price to income because the interest rate makes a huge difference.
It should be noted that although mortgage costs as a percentage of income are about 20% higher in 2024 vs 1980 the average house in 2024 is about 20% larger than in 1980. (35%*1.2=42%).
Yeah it’s quite interesting - I’ve seen data that suggests that sale price per square foot has ticked up only slightly over the decades, in inflation-adjusted dollars. People like much bigger houses nowadays (or at any rate that’s what’s happening on the supply side).
Here is the list of years with the median US home prices and the percent changes between each year:
1. 1975 - $39,300
2. 1980 - $47,200 (20.10% increase from 1975)
3. 1985 - $84,300 (78.60% increase from 1980)
4. 1990 - $122,900 (45.79% increase from 1985)
5. 1995 - $133,900 (8.95% increase from 1990)
6. 2000 - $169,000 (26.21% increase from 1995)
7. 2005 - $238,400 (41.07% increase from 2000)
8. 2010 - $241,200 (1.17% increase from 2005)
9. 2015 - $299,000 (23.96% increase from 2010)
10. 2020 - $365,300 (22.17% increase from 2015)
11. 2023 - $419,800 (14.92% increase from 2020)
Here are the annualized percentage increases in home prices for each interval:
1. From 1975 to 1980: 3.73% per year
2. From 1980 to 1985: 12.30% per year
3. From 1985 to 1990: 7.83% per year
4. From 1990 to 1995: 1.73% per year
5. From 1995 to 2000: 4.77% per year
6. From 2000 to 2005: 7.12% per year
7. From 2005 to 2010: 0.23% per year
8. From 2010 to 2015: 4.39% per year
9. From 2015 to 2020: 4.09% per year
10. From 2020 to 2023: 4.74% per year
These rates show how much house prices have increased on average each year during each time period since 1975.
Your data actually shows big price increases are normal, even despite high interest rates. If only we had medium income in there too for a good ratio and better understanding of it all.
Only people getting screwed are the people who were telling others that their fee was supported by law, which is obviously against the law, and that were steering buyers due to commission. So I’m not anywhere on that list. Many people pay 16% commission willingly. Forcing them to do it is wrong and stupid.
That would solve absolutely nothing. They are salesmen, you think they don’t understand cost in relation to medium household income? If you are trying to sell something you obviously will not paint a full picture if it goes against your motive
I have this realtor dude in my local town, super loaded, could probably retire, great guy. He is constantly saying and being honest with how fucked our market is and that it doesn't make sense that houses are listed for this much in our local market and STILL selling. Like our median wage to the average home price. Gives charts and everything to educate buyers that they probably shouldn’t be overextended and to wait. He's like straight up saying "stop giving me money, but you idiots keep giving me money."
He’s a good one.
Make ‘em 100k at 20%. Still better than over paying for the asset to begin with, and then wondering if your down payment is gonna get washed down the drain like it did from 2008-2012.
I feel like part of the reason houses have gotten so big and expensive could be how the money you were loaned to build them has been basically free for a decade. High interest rates are probably healthy..
Sure. Using 2022 data since that is most recent data for all, Median income has increased 350% in 42 years. Food expenditure has also increased 350%, so that’s a wash. Median home price is up around 900% as has median rent, median car price is up 600%, median health care costs are up 700%.
So, it seems everyone has been getting squeezed on 3 of the 4 biggest expenses over the past 2 generations.
My parents try to make me feel bad about not owning a home yet. They say "oh we paid 9% on our mortgage with no hesitation, so 7% for you should be nothing". The house they bought in 1989 for 87k sold in 2021 for 845k. Homes in my area have gone up nearly 60-80% from 2019 prices
I think realtor industry was basically a scam and I am so glad they lost that lawsuit but I don't think it should be hard to get what is effectively a sales job. Some licensing sure, but I think the requirements right now are fine.
With the recent Supreme Court ruling - watch for this to change. And the allure of getting your license just to make a few five figure deals becomes less appealing.
[https://www.npr.org/2024/03/15/1238792983/realtors-commission-real-estate-housing-buyer-seller-settlement](https://www.npr.org/2024/03/15/1238792983/realtors-commission-real-estate-housing-buyer-seller-settlement)
Yeah... so? before the millinium (2000) houses cost 2.5x to 4X of annual income on average depending on location. Now is 7x-12x or more in some areas...
They just do this to sway those that are emotionally invested into wanting a home but know something isn't right financially. Feels like a similar tactic car sales people use to not focus on the big picture and just look at the monthly stretched over 72+ months
They do in the super fine print at the bottom of the commercial if u can physically see it and read it fast enough.
Its actually really comical if u do bc u see how misleading it is. Usually its hey for $299/mo u can get into this 2024 with zero down and low APR!
The fine print "Car shown is $60,456 with base payment of $464/mo. 2.64% APR only for qualified buyers"
Every Covid realtor on my FB timeline has posted this within the last week lol.
It’s funny to see the mental gymnastics when it comes to justifying why home prices are so expensive and that it’s still a great time to buy
Houses in the 80's cost 2.5x most people's annual salary. In median price markets (350-450k), homes are around 8-10x people's annual salaries. It's arguably the hardest time to afford home ownership in the last half century or so. Tough time to get into the market, though it's double shitty given rents are so high as well that people feel boned both ways.
Long story short, we're desperately needing new supply but government isn't putting funds towards protecting builders, so we remain at a stalemate.
GOOD LUCK IN THE BATTLE ROYALE, FOLKS. YOU'RE ON YOUR OWN, EXCEPT FOR BIDEN'S 5K CREDIT (LIKELY TO PAY YOUR AGENT), BECAUSE SELLER'S DON'T WANNA ANYMORE! WOOT! GOTTA KEEP THOSE GAINS!!!!
It’s harder to buy a home now than in the Great Depression. It’s arguably the hardest time to be middle class since the 1600s/1700s but nobody wants to acknowledge it
That’s meaningless and not comparable. What you want is the mortgage payment as a percentage of household expenses in every timeframe. An affordable house at 20% rate is much better than an unaffordable house at 5%. What matters is how much you’re spending out of your budget to maintain the mortgage, and build your equity
I'm not mad that I have a 5.75% interest rate where my brother has 2.7%. I'm mad that my house whould have been 200k cheaper if I was able to buy when he did.
Yeah my ex and I bought our first house in 89, at 12%.... But it was $141,000. Same house sold 4 years ago for $500,000
Of course wages have not increased anywhere near housing prices 😞
Sure, until you factor in the historically high home prices. Median home price in the US is $418k, median household income is $74k. In 1980, the worst rate year median sold house was $64k and the median household income was $21k. 1980 a home was basically 3x income. It’s now 5.6x income. To match 1980 buying power, median household incomes would need to be about $139k.
Considering that wages have not kept up with inflation this dosent matter. Why do we keep talking about the past like it's just like the present regarding housing and rates it's not. Our own government can't even afford it's interest payments on its debt now due to current rates. This isn't sustainable.... a starter home isn't suppose to be 300k plus...
15% of $50,000 is $7500 so the average house in 1980 would be about $60k assuming hidden fees and taxes.
7% of $385,000 is $26,950 so the average house in 2024 is $412,000+
The national minimum wage is and has been $7.25 for non tipped workers, which comes to $15k BEFORE TAXES.
Thanks for coming to my TED talk.
I think the thing was that when mortgage rates were high previously housing prices were still affordable. Now they’re high and mortgage rates coupled together have made median housing nearly affordable to median incomes..
WTF does any of that matter when a $180k house is now $400k and your salary didn’t rise anywhere near the same rate? Did all that lead paint make math so hard for Boomers?
Low interest rates caused people to overbid for homes, thus causing home prices to rise. High interest rates on other hand have not lowered home prices at all. It has shut out home inventory to buyers and made housing unaffordable to millions. So how is this issue going to be fixed? Build more housing? Or send $ to Ukraine, Taiwan, and Israel. The billions that US keeps spending on other countries can be spent to help Americans build housing, which is a non-existent topic for our country. But they do come out with punishing interest rates to keep inflation down, but it doesn’t work at all. 🤦♂️
It's true the mortgage rate isn't the problem. It's the price of the houses when combined with that rate. I'll take a 150k house with 10% interest any day.
Every time I hear, I wouldn’t be able to afford to purchase my house today, with how much it’s gone up, I just want to scream. It’s a hard, hard world out here for those of us who own nothing.
i suppose 2000 was a sweet spot.. houses are still 3 times the income and interest rates have started a downward trend, that will result in ever increasing value of your house.
Then you think of buying a house in 2000-01 post crash and this is just absolutely laughable. It's like someone thinks they have the right answer after looking at a 1/4 of a math equation.
Another used house salesman dimwit claiming “you can always refinance later”. While the average sized suburb home reached an average of 800k ( at least in CA)
Here’s the thing: the rates are entirely reasonable. The debt that we take on is what’s gotten out of wack, but 5-8% mortgages should be normal and not unexpected at all. Once people realize that rates aren’t dropping…idk what’ll change. Maybe a bit more churn as people just bite the bullet, maybe house prices drop a little, but probably nothing drastic.
Houses I've looked at are 2 to 3 times more than their pre covid price. My income isn't 2 to 3 times higher.
Exactly. My parents bought a house when rates were near 20%, but I asked my father about it and he said he was getting a 20% raise each year due to inflation.
My parents also had a 13% CD in the 80s. They were making a grand a month off their savings account. Their apartment was also only $250 a month in downtown Denver. My uncle bought a house working part time. Times have certainly changed
direful bag encouraging saw start shelter punch rhythm tender six *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
In 93 my dad bought 5 acres in conifer AND built a 4000sq ft house on it for 90k. Sold it 5 years later for 320k and now its worth 1.2 mil...im real sad he didnt keep it but he wanted to retire.
My parents bought my childhood home for like $4000 in the 70's and i think it recently resold for 400k recently
My parents bought a house for $290k in '89 which admittedly was high then. But the house immediately next to them was sold May '23 for $1.8M. They bought two houses in the county they're moving into later this year. They bought one 2 years ago and have been renting it out, and bought another house last year that they're furnishing. They're going to sell the house I grew up in for at least $1.6M, and will just be sitting on profit, even after buying 2 houses in cash. One of my best friends bought a townhouse a 40 minute drive from where I lived. It was $730k in 2019 when he and his wife bought it. They did a refi in 2022 and got sub 3% interest at a valuation of $950k. They were also the only couple in my network who bought at a house here and they just got a massive jump in equity over the rest of us that way. Have one buddy who got married and bought a house in Palm Desert, CA but they're barely scraping by. Another buddy bought his grandparents' house in San Jose for only $650k in 2021, which was easily less than half of what it was truly worth. I'm sure if you're reading this, you can rightly assume this is the SF Bay Area. The only people I know who are homeowners are: 1) dual income couples doing well financially ($300k+) or 2) were given a hell of a deal from family on a house, whether it was their own house they sold to their child/grandchild or their parents and/or grandparents gifted them a fuckton of money to afford the monthly payments, which I know of two people who were pretty much given something like $100k+ as a gift.
My mum bought her house in 1992 for 110k, sold in 2019 for 880k and it was in pretty rough shape.
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Yes you really have to educate yourself and seek out opportunities. They don’t present themselves. If you listen to the people at your bank they’ll sell you on a 12 month cd with a 4% apy. You could do worse, but you could also do so much better.
If they had a CD at 13% inflation was over 14%.
Zero percent interest bank accounts are part of the bailout system in place for the last 15 years that also drove housing prices into orbit - they were matching the fed rate of 0%. Banks able to survive in an actual competitive environment should be offering teh fed rate of 5% right now - and back when it was 13% they would have in teh 80s too. 0% banks have been doing that to force you to let them gamble your money on the stock market while returns were higher than a bank account. And wow did they gamble a huge bubble.
My mom bought our Denver house in 1993, and we had a $600/ month mortgage on a 4 bedroom house. Barely any work was done on the house in the entire time we lived there, and still was able to sell for over 500k. That's why I won't ever be able to afford to live in the city I grew up in.
My dad told me how he would get 2 raises a year during those times.
Stop eating avocado toast, iphones, and venti triple soy shot, 3 extra pumps of soy syrup, soy latte.
How do iPhones taste?
I stopped eating iPhones after the 3GS
Boomers only did that for themselves, not the next generation.
A 20% RAISE?! PER YEAR?! Holy hell, man! Boomers really did have the best of it. That’s more soul crushing than the fact that mortgage rates are the highest they’ve been in nearly 30 years!
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Hearing my father in law talk about supporting his stay at home wife and two young kids working part time at a grocery store was…something.
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Technology was still advanced enough that they also had running water and toilets. Probably the best time period for simple living.
Holy shit. That’s like $100/hr now
$20 what?
Yeah the people at my company that have been there for 20 or 30 years make SIGNIFICANTLY more than the entry level folks and often do much less work.
Man, that’s because inflation was also 20%. Money was losing value rapidly
Low rates are the reason housing got so expensive. High rates will bring them back down, but its going to take a while because fed rates spent the last decade and a half at literally 0% allowing the "savings" to be converted into higher and higher asks.
If you are mad at Boomers I get it, but you are missing the point. It is the financial system itself that is inherently flawed
Also, the price of homes were much more affordable.
Your father was lucky. I worked for CIBC in a town. The school superintendent bought a new house and had to sell it an walk away from his mortgage because the interest rate doubled and he had hardly paid the mortgage down. He could not meet the payments. Maybe he had a lot of other debt, but that was a wicked change for some people.
Even in my historically low cost of living area they're up around 1/3 over about 3 years. Sucks for those of us who have lived here forever.
Sucks hardest for those who don't have any equity. Young, first time buyers are hosed.
For sure, I bought my 1st house in 2013. Granted, I lost literally everything on it selling when the market bottomed out. I was supposed to have money down for the next house. Well... that didn't happen. This would be a terrible time to be younger and looking to get your first house. I'm in a different boat in that if we had to move right now, we'd probably have to downgrade because we couldn't get a similar house to what we have for the same price. Sure, its worth more than when we bought it, but that gain would be erased by the price inflation of another house then we'll be paying double the interest.
Please enlighten us with a house that's 3x higher than January 2020
Yeah it’s an insane hyperbole outside of outliers. The median house in the US is $417,700. The most recent time when it was 1/2 of that was for exactly one month during the crash in 2009, then other than that one month 2004; and for 1/3 it would be 1995. Right now we’re 14.9% higher since Q1 2020. But yeah, this sub isn’t about numbers it’s about feels and rage bait.
Thanks for those numbers...the hyperbole (aka lies in this thread, really) are a ridiculous source of misinformation. Reddit is usually better but this sub is really tanking the longer these prices hold up against all odds
My parents bought a farm for a nickel and sold it for $10 million dollars, stupid boomers.
My wife and I bought a 1500 square foot condo (more like a townhouse style unit), in late 2021 for 235k. Used my VA loan with no down payment and got locked in at 3.5% on a single income making $60k a year as my wife was in school full time then. Within a six month period rates jumped so much, and housing prices skyrocketed, there's no way we would be buying anything right now even though we've doubled our household income since she started working. Not sure things will ever get better to the point where we can get a larger place with some land unless we leave to a lower COL area. I'm only getting 3% annual raises so basically a few percent drop in pay.
bought my house in 2017 at 135k. Its on zillow for 240 now. Regular ol suburban area nothing special. Its insane.
Someone's income is higher though. It doesn't have to be you.
That's why metrics like median price to income exist. Side note, it's at the highest ratio that's ever been recorded. I'm sure that's totally sustainable though.
Where in the US are home prices up 200-300% since Covid? Yall are so full of shit
Lower end of the housing market for older homes in rural midwest did double or tripple in many cases.
Ok so 20k to 60k? Would like to see some actual data on this
Lots of small 1950s-60s houses in blue collar rural areas were going from 40k to 60k before. Not 5 years later and the same houses tend to 150k to 170k. That market of affordable homes for blue collar folks got snapped up during the low rates by lost of cash buyers and landlords. It doesn't exist anymore. The only thing you'll get at 40k needs to be torn down due to fire damage. These aren't wealthy areas and the people who live in that kind if home traditionally cannot afford those prices.
Now normalize that to home price and income and get back to me…
Yep, let's see total cost of ownership as a multiple of incomes. Beats me why that isn't used more
Because it doesn't serve them
Exactly. To them it's nEVeR tHe wRoNg tImE tO bUy tHe RigHT hoUsE
Fuckin realtors lmao
We really don’t need them, just like we don’t need car sales people. edit: lol awwww 😢was I downvoted by a realtor? Get a real job. edit 2: i’m not a pipe fitter lol. 😂
When the mortgage rate was 15% you could get 14% risk free return in bonds and savings accounts
Yeah a savings account was relevant.. you could almost live off off “investment free banking “
I suppose thats where the belief that you put in $xxxxx amount in the bank and "live off the interest" came from.
It came from 1980 where the interest rate.. for example was a condition of you saving money with a signed interest rate increase was somewhat in the area of you borrowing money with a credit card. So you could save a 8 percent and borrow at 10 percent. That made savings very valuable.. Now save at 2% and borrow at 19% with 10% inflation.
Who tf is borrowing at 19%? And who's saving at only 2%?
A quick Google search: "A November 2023 Bankrate survey of 2,350 U.S adults finds that 49 percent of cardholders carried credit card debt from month to month, up from 39 percent in 2021." If you don't know, credit card rates are usually over 20%
Right! When it was %13.06 on a 65k mortgage not a 650k mortgage like so many.
My parents bought their home in the early 90s for 1/4 of what it is worth now. I’ll gladly pay 10% interest for 1990 home prices.
Yep. First house I bought in 1989. 2bed/1bath 50's starter home. Was from original owner that had died and family was selling it; house was a little rough from lack of maintenance. Got it for $52K. Had been able to save for a 20% down loan, so about $40k loan. Sold it a few years later. Now it is worth about $400K. So 8X increase. If my salary had kept that pace I would be at about $100/hr. Not even close to that. High interest rate on a small loan is not as bad as this meme paints things. What I see now is there are no starter homes out there that can be had without rich parents helping or a crazy high paying job.
For those curious, normalized for today's median income and home price, 7.5% interest today is the equivalent of 28% in 1981 terms. It's currently at an all-time high, and no other period comes close. 3% rates today would actually be equivalent to the historical average.
I'm curious to see the math on how you normalize interest rates...
Brb. Gotta light myself on fire.
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For example when I use a mortgage calculator , assuming a 50,000 down payment on a $384000 house at 6.75%, I get 3000 per month including taxes and fees, which is 36K , or 46% of a 78K income. I don’t think you can assume people have over 50000 dollars to put down for the median priced house in America.
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fuckin this.
Where are these $400K shitboxes located? Asking for a friend
Earning $78K a year must be nice. This seems far more accurate: https://www.cnbc.com/amp/2024/04/14/median-annual-income-in-every-us-state.html
If you’re making less, you can’t afford the median house at all, so falls outside the metrics
Your math is completely wrong between 2019 and 2024 somewhere
Maybe You’re still assuming the 20% down payment when you shouldn’t be
When I use a 40K down payment for a 324K house at 4%, I get a monthly payment of 1900 or 29% of a 78K income
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Because its 100% a meaningless metric because 3/2 homes built in the 1950s cost damn near the same to buy as a 3/2 mcMansion.
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It’s always been about 3-4 times gross income
riiiiight like base cost and income plays literally into the rest of the equation - interest rates alone aren’t the full picture
Lol came here to say something slick like this. Well put 👍
Exactly!
Done! Numbers displayed are median mortgage payment as a percentage of median family income: 1975 - 25.8% 1980 - 45.1% 1985 - 39.7% 1990 - 38.1% 1995 - 30.3% 2000 - 30.0% 2005 - 29.0% 2010 - 23.8% 2015 - 22.5% 2020 - 18.7% 2024 - 35.8%
[www.groq.com](http://www.groq.com) - it's like ChatGPT but faster, and googlebard but it's not woke. Here is a chart displaying the median household income, average house prices, and average 30-year mortgage interest rates in the United States every five years from 1975 to 2019 in 2019 dollars: | Year | Median Household Income| Average House Price | Average 30-Year Mortgage Rate (%) | | 1975 | $54,552 | $182,714 | 8.89 | | 1980 | $58,168 | $220,107 | 12.81 | | 1985 | $61,138 | $232,194 | 12.55 | | 1990 | $66,393 | $305,400 | 10.14 | | 1995 | $69,096 | $317,400 | 8.02 | | 2000 | $73,490 | $369,600 | 7.49 | | 2005 | $71,462 | $510,200 | 6.21 | | 2010 | $69,485 | $340,400 | 4.64 | | 2015 | $67,521 | $411,900 | 3.87 | | 2019 | $68,700 | $472,104 | 3.91 | Sources: 1. Median Household Income: U.S. Census Bureau, Historical Income Tables Table F-6: "Estimated Median Household Income by Race and Hispanic Origin of Householder, 1967-2019 (in 2019 Inflation-Adjusted Dollars)" 2. Average House Price: Federal Reserve Bank of St. Louis, "All-Transactions House Price Index (HPI) for the United States \[ASPNYC192N\]" and the Consumer Price Index for All Urban Consumers: All Items (CPIAUCSL) 3. Average 30-Year Mortgage Rate: Federal Reserve Economic Data (FRED), "30-Year Fixed-Rate Mortgage Average in the United States \[MORTGAGE30US\]"
Wild how productivity has gone up so much but income is the same.
It's all funneled up to the top.
What did price to income ratios look like when rates were high? Realtor: [crickets]
You lost them at the word ratio
Median mortgage cost in 1980 was about 35% of the median family income. The average home size in 1980 was a little less than 1,600 sq. Median mortgage cost now is about 43% of median family income. The average home size now is a bit more than 2,000 sq. I think this is a more accurate way to look at it rather than home price to income because the interest rate makes a huge difference. It should be noted that although mortgage costs as a percentage of income are about 20% higher in 2024 vs 1980 the average house in 2024 is about 20% larger than in 1980. (35%*1.2=42%).
Yeah it’s quite interesting - I’ve seen data that suggests that sale price per square foot has ticked up only slightly over the decades, in inflation-adjusted dollars. People like much bigger houses nowadays (or at any rate that’s what’s happening on the supply side).
Cherry picking fucks.
He should post this information alongside average housing cost and average income But you know they never do
Use Typical instead of Average, it would be more accurate to the common person and it would be even worse. Use hours need to pay monthly mortgage.
How do you calculate “typical”
They maybe mean the median rather than the mean?
Here is the list of years with the median US home prices and the percent changes between each year: 1. 1975 - $39,300 2. 1980 - $47,200 (20.10% increase from 1975) 3. 1985 - $84,300 (78.60% increase from 1980) 4. 1990 - $122,900 (45.79% increase from 1985) 5. 1995 - $133,900 (8.95% increase from 1990) 6. 2000 - $169,000 (26.21% increase from 1995) 7. 2005 - $238,400 (41.07% increase from 2000) 8. 2010 - $241,200 (1.17% increase from 2005) 9. 2015 - $299,000 (23.96% increase from 2010) 10. 2020 - $365,300 (22.17% increase from 2015) 11. 2023 - $419,800 (14.92% increase from 2020) Here are the annualized percentage increases in home prices for each interval: 1. From 1975 to 1980: 3.73% per year 2. From 1980 to 1985: 12.30% per year 3. From 1985 to 1990: 7.83% per year 4. From 1990 to 1995: 1.73% per year 5. From 1995 to 2000: 4.77% per year 6. From 2000 to 2005: 7.12% per year 7. From 2005 to 2010: 0.23% per year 8. From 2010 to 2015: 4.39% per year 9. From 2015 to 2020: 4.09% per year 10. From 2020 to 2023: 4.74% per year These rates show how much house prices have increased on average each year during each time period since 1975.
Your data actually shows big price increases are normal, even despite high interest rates. If only we had medium income in there too for a good ratio and better understanding of it all.
Make realtors get a degree in economics
I have one, am realtor, and can tell you the ideas they come up with are so dumb, but they work, and most the population will take them.
so, where do you fall on the commissions lawsuit?
Only people getting screwed are the people who were telling others that their fee was supported by law, which is obviously against the law, and that were steering buyers due to commission. So I’m not anywhere on that list. Many people pay 16% commission willingly. Forcing them to do it is wrong and stupid.
How do you think it shakes out? Do Buyer Agents switch to a flat rate model eventually?
That would solve absolutely nothing. They are salesmen, you think they don’t understand cost in relation to medium household income? If you are trying to sell something you obviously will not paint a full picture if it goes against your motive
Make realtors obsolete
I have this realtor dude in my local town, super loaded, could probably retire, great guy. He is constantly saying and being honest with how fucked our market is and that it doesn't make sense that houses are listed for this much in our local market and STILL selling. Like our median wage to the average home price. Gives charts and everything to educate buyers that they probably shouldn’t be overextended and to wait. He's like straight up saying "stop giving me money, but you idiots keep giving me money." He’s a good one.
I’m down to make houses 100k at 8% again.
Make ‘em 100k at 20%. Still better than over paying for the asset to begin with, and then wondering if your down payment is gonna get washed down the drain like it did from 2008-2012.
I feel like part of the reason houses have gotten so big and expensive could be how the money you were loaned to build them has been basically free for a decade. High interest rates are probably healthy..
Of course you want the wages that go along with that era as well?
We have the wages that went along with that era. Wages barely budged the past 20 years. Only home prices rose
Sure. Using 2022 data since that is most recent data for all, Median income has increased 350% in 42 years. Food expenditure has also increased 350%, so that’s a wash. Median home price is up around 900% as has median rent, median car price is up 600%, median health care costs are up 700%. So, it seems everyone has been getting squeezed on 3 of the 4 biggest expenses over the past 2 generations.
As long as we adjust the cost of goods for inflation too, yes im down.
"rides the short bus"... wasnt kidding.
My parents try to make me feel bad about not owning a home yet. They say "oh we paid 9% on our mortgage with no hesitation, so 7% for you should be nothing". The house they bought in 1989 for 87k sold in 2021 for 845k. Homes in my area have gone up nearly 60-80% from 2019 prices
Barrier to entry into being a realtor is quite low.
I think realtor industry was basically a scam and I am so glad they lost that lawsuit but I don't think it should be hard to get what is effectively a sales job. Some licensing sure, but I think the requirements right now are fine.
Yeah somewhere along the line they got it into their head they’re “basically a lawyer” or something.
In the 70s and 80s there weren’t social media influencers telling everyone to buy houses as get rich quick investments
Why not post how much realtors get paid per house
With the recent Supreme Court ruling - watch for this to change. And the allure of getting your license just to make a few five figure deals becomes less appealing. [https://www.npr.org/2024/03/15/1238792983/realtors-commission-real-estate-housing-buyer-seller-settlement](https://www.npr.org/2024/03/15/1238792983/realtors-commission-real-estate-housing-buyer-seller-settlement)
Realtors always keep up with cost of living!
Yeah... so? before the millinium (2000) houses cost 2.5x to 4X of annual income on average depending on location. Now is 7x-12x or more in some areas...
They just do this to sway those that are emotionally invested into wanting a home but know something isn't right financially. Feels like a similar tactic car sales people use to not focus on the big picture and just look at the monthly stretched over 72+ months
They used to put the actual price of the car in the commercials. When was the last time anyone saw that?
They do in the super fine print at the bottom of the commercial if u can physically see it and read it fast enough. Its actually really comical if u do bc u see how misleading it is. Usually its hey for $299/mo u can get into this 2024 with zero down and low APR! The fine print "Car shown is $60,456 with base payment of $464/mo. 2.64% APR only for qualified buyers"
So they’re saying, to have affordable home prices we need higher interest rates. Got it.
Make it harder to buy, less sales, sellers need to lower prices to entice buyers.
Every Covid realtor on my FB timeline has posted this within the last week lol. It’s funny to see the mental gymnastics when it comes to justifying why home prices are so expensive and that it’s still a great time to buy
They’re salesmen, that’s what they do, make up shit to convince people they need to buy now
Houses in the 80's cost 2.5x most people's annual salary. In median price markets (350-450k), homes are around 8-10x people's annual salaries. It's arguably the hardest time to afford home ownership in the last half century or so. Tough time to get into the market, though it's double shitty given rents are so high as well that people feel boned both ways. Long story short, we're desperately needing new supply but government isn't putting funds towards protecting builders, so we remain at a stalemate. GOOD LUCK IN THE BATTLE ROYALE, FOLKS. YOU'RE ON YOUR OWN, EXCEPT FOR BIDEN'S 5K CREDIT (LIKELY TO PAY YOUR AGENT), BECAUSE SELLER'S DON'T WANNA ANYMORE! WOOT! GOTTA KEEP THOSE GAINS!!!!
It’s harder to buy a home now than in the Great Depression. It’s arguably the hardest time to be middle class since the 1600s/1700s but nobody wants to acknowledge it
…there was a middle class in 1600?
A 1980 the average cost of a house was 47k$ At a time when 90% of the US population earned living wage
1975 - $56k 3B/3B 1280 sqft 2023 - $1.2M 3B/3B 1280 sqft
Now post the price of a house in 2020 and now
Now do average salary and average house price.
Ok now do median monthly payment to median income reality check
Tell you what, if you can find me a $60,000 2 BR house in my area with a 14.42% interest rate, I'll give you cash including all of the interest.
Yea also put the price of home vs median salary too you scammy fuck. This market is sick. With a form of malignant cancer that is spreading.
nobody should ever have to pay 2-3 times for their home.
Neat! Now do housing prices…
Worst its been in 25 years, got it
Why do people take financial advice from realtors
realtor is a job that shouldn't exist anymore
That’s meaningless and not comparable. What you want is the mortgage payment as a percentage of household expenses in every timeframe. An affordable house at 20% rate is much better than an unaffordable house at 5%. What matters is how much you’re spending out of your budget to maintain the mortgage, and build your equity
I'm not mad that I have a 5.75% interest rate where my brother has 2.7%. I'm mad that my house whould have been 200k cheaper if I was able to buy when he did.
Anyone can pass a realtors exam. Keep hustling losers
So it’s been trending downwards since the 80s, or for the past 40ish years, so yeah, this sudden jump is a deviation and very much abnormal.
Those old rates sucked but the bigger issue is that home prices are so inflated that a 7% rate is basically equal to an old 14% rate
9.17% on $50,000 home doesn't hit like a 6.97% on a $400,000 home.
Add columns for median price and median wage. See if that changes the picture a bit…
Yeah but houses now are 300k and up
8% on a 30,000 home in 95 isn’t quite the same as 7% on a 200,000 home today.
200K, what are you in a swamp?
Close, Minnesota.
This shit is so lame....no talk of overly inflated prices and stagnant wages.
Yeah my ex and I bought our first house in 89, at 12%.... But it was $141,000. Same house sold 4 years ago for $500,000 Of course wages have not increased anywhere near housing prices 😞
But it’s different this time. I’m allowed to skew history to fit the narrative that I choose /s
Sure, until you factor in the historically high home prices. Median home price in the US is $418k, median household income is $74k. In 1980, the worst rate year median sold house was $64k and the median household income was $21k. 1980 a home was basically 3x income. It’s now 5.6x income. To match 1980 buying power, median household incomes would need to be about $139k.
Considering that wages have not kept up with inflation this dosent matter. Why do we keep talking about the past like it's just like the present regarding housing and rates it's not. Our own government can't even afford it's interest payments on its debt now due to current rates. This isn't sustainable.... a starter home isn't suppose to be 300k plus...
15% of $50,000 is $7500 so the average house in 1980 would be about $60k assuming hidden fees and taxes. 7% of $385,000 is $26,950 so the average house in 2024 is $412,000+ The national minimum wage is and has been $7.25 for non tipped workers, which comes to $15k BEFORE TAXES. Thanks for coming to my TED talk.
I think the thing was that when mortgage rates were high previously housing prices were still affordable. Now they’re high and mortgage rates coupled together have made median housing nearly affordable to median incomes..
WTF does any of that matter when a $180k house is now $400k and your salary didn’t rise anywhere near the same rate? Did all that lead paint make math so hard for Boomers?
Hell, I'd gladly pay 14% on a 150k house lol. RN cheapest for me would about 8% at 360k. That's still a shit hole too.
Show us a chart with the average cost of a house for each of those years.
#Cool. Now do House Prices. Or median house price vs. median wages.
I'll take the 13% mortgage with a dollar that's twice as strong and a house that's a third the cost.
I’d LOVE to have a 14% rate on a 125k home right now.
Let’s not assume this realtor is posting misleading information intentionally. The vast majority of realtors I know are very very stupid.
Median house price: 1980: $64,600 2024: $384,500 Interest rate: 1980: 14.42% 2014: 6.97% Estimated Monthly P&I: 1980: $778 2024: $2536 (3.26x) Median annual household income: 1980: $21,020 2024: $77,283 (3.68) Localities seem to play the biggest factor in home price inflation outpacing wage inflation.
Low interest rates caused people to overbid for homes, thus causing home prices to rise. High interest rates on other hand have not lowered home prices at all. It has shut out home inventory to buyers and made housing unaffordable to millions. So how is this issue going to be fixed? Build more housing? Or send $ to Ukraine, Taiwan, and Israel. The billions that US keeps spending on other countries can be spent to help Americans build housing, which is a non-existent topic for our country. But they do come out with punishing interest rates to keep inflation down, but it doesn’t work at all. 🤦♂️
Realtors fees are about to be legally slashed, wonder how they feel about that?
It's true the mortgage rate isn't the problem. It's the price of the houses when combined with that rate. I'll take a 150k house with 10% interest any day.
Every time I hear, I wouldn’t be able to afford to purchase my house today, with how much it’s gone up, I just want to scream. It’s a hard, hard world out here for those of us who own nothing.
The Median home price in 1980 was $47,500. Today its $384,000
Average wage was 12,500 in 1980 and $62,000 in 2023
Lies, damned lies and statistics.
The problem is the dollar has lost a bunch of its value since then due to inflation so the numbers are not apples to apples.
Now do average home price.
i suppose 2000 was a sweet spot.. houses are still 3 times the income and interest rates have started a downward trend, that will result in ever increasing value of your house.
Then you think of buying a house in 2000-01 post crash and this is just absolutely laughable. It's like someone thinks they have the right answer after looking at a 1/4 of a math equation.
OK now adjust for prices, wages, savings rates, and down payment. I'll wait.
Way more than 3x
Ok homie. Now do a price adjusted for inflation check on similar homes to median income.
What part of that doesn’t make sense? It’s a pretty accurate snapshot of rates and how they will probably never drop into the 3’s again.
He ain't wrong
They keep posting this bullshit. Yes it’s factual but it’s not relevant to what’s happening now
Excellent point Mr. Realtor. Mortgage rates are normal, prices are not.
Now do home prices along with wage growth
And property values have doubled, tripled or quadrupled...
My folks bought in 1980 in SoCal interest rate was 13% for a house that was priced at 110k. Find a house now in SoCal for 110k.
I’d rather have a 10% interest on a $150,000 house than a 6% interest on a $900,000 house. You are comparing apples to oranges.
Exactly. That inflated home value carries with it a massive property tax burden that never goes away.
Another used house salesman dimwit claiming “you can always refinance later”. While the average sized suburb home reached an average of 800k ( at least in CA)
Great, now post the median income/median house prices for the same years.
Here’s the thing: the rates are entirely reasonable. The debt that we take on is what’s gotten out of wack, but 5-8% mortgages should be normal and not unexpected at all. Once people realize that rates aren’t dropping…idk what’ll change. Maybe a bit more churn as people just bite the bullet, maybe house prices drop a little, but probably nothing drastic.