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Housing expenses / all expenditures
Deflation in other segments allows more income thrown into housing.
Plus lower interest rates continue to push price up.
Plus also dis-saving. If home prices go up & up, people's home equity becomes their life savings, augmenting if not taking the place of 401k contributions etc.
consumer household debt ratios:
How can housing prices grow faster than wages?
Income is not the only variable that determines what home a person can afford. Net worth is also a determinant.
Strategist saysIncome is not the only variable that determines what home a person can afford. Net worth is also a determinant.
The main determinant in my humble opine.
The richest people already have the best houses. They are not really a factor in housing for ordinary people.Patrick says
The richest people already have the best houses. They are not really a factor in housing for ordinary people.
Well, if Trump would actually do something about illegal immigration instead of being a complete pussy...
You misunderstand Heraclitus point. If the rich already have the best, in a limited supply environment then the "next richest" will get the "next best" and so on and so forth. Ordinary people and anyone below them don't matter in the equation - the ordinary people are squeezed out and forced to rent, double up, move further away etc.
Guys, wealth does not bring happiness. It's the little things you do with family and friends that bring you happiness. Trust me on this.
Strategist saysIncome is not the only variable that determines what home a person can afford. Net worth is also a determinant.
The main determinant in my humble opine.
Most Americans' net worth is near or below zero.
If what you own goes up in value all the time due to inflation you will be in great advantage to those who start out without owning anything
mell saysIf what you own goes up in value all the time due to inflation you will be in great advantage to those who start out without owning anything
My cousin Melinda and her husband Pat finally sold their home in McClain, VA that they paid $300,000 for in 1984 after sitting on it for three years and two years afte they'd moved into a condo:
https://www.zillow.com/homes/for_sale/7414-Dulany-Dr,-Mc-Lean,-VA-22101_rb/?fromHomePage=true&shouldFireSellPageImplicitClaimGA=false&fromHomePageTab=buy
Dan8267 says
Most Americans' net worth is near or below zero.
Probably so. The top 20% in terms of net worth or income could afford high priced homes.
Probably so. The top 20% in terms of net worth or income could afford high priced homes.
the rest can rent forever or live in the shit zip codes.
PeopleUnited says
Probably so. The top 20% in terms of net worth or income could afford high priced homes.
the rest can rent forever or live in the shit zip codes.
We can't all live in $50 million mansions. Why is it wrong living in a home you can afford?
Our ancestors lived in squalor, slums, huts, caves and even trees. Most humans across the world still do.
Why are us Americans so upset with our living conditions, when we live better than the rest of the world?
We are spoilt rotten Americans.
We can't all live in $50 million mansions. Why is it wrong living in a home you can afford?
Our ancestors lived in squalor, slums, huts, caves and even trees. Most humans across the world still do.
Why are us Americans so upset with our living conditions, when we live better than the rest of the world?
We are spoilt rotten Americans.
Inreasingly the houses that are affordable require unreasonable commutes or are literally death traps, and/or require a lifetime of hard labor to "afford". The American dream of upward mobility is mostly a fairytale farce used to placate the working class. If everyone can't have access to decent affordable housing how are we any better than communists?
The West in general is losing ground. The elites are moping up while the working class is on the hook for not just personal debt but national debts as well!
At some point we will see another recession. In a job-loss recession housing prices will start to come down.
Patrick.net has come full circle.
We came here in wait for the housing bubble to burst. Now we're rehashing old hat.
So what is the bubble, waiting to froth right now?
Stock Market? Will it double yet before crashing?
I don't know if anyone could even imagine that interest rates would ever drop to near 0 and they would print their way out of the problem.
"And lest you think that retiring boomers are driving the LFPR down, in workers 65 and older, the LFPR has been heading up. Perhaps many cannot afford to retire."
No, an aging workforce is absolutely driving the LFPR down. True the LFPR has been heading slightly up for workers 65 and older, but it's still WAYYYY below the LFPR for workers 25-50. As the workforce ages, the overall LFPR goes down (even when the 65 and older LFPR rises slightly).
The richest people already have the best houses. They are not really a factor in housing for ordinary people.
Deflation in other segments allows more income thrown into housing.
Unless the market comes down by 30%+ I wont buy.
I think Herc is correct. The only reason for housing to continue to rise like it has over the last 20-30 years is supply is not increasing as fast as demand. We can argue the reasons as to why this has been the case, but it undoubtedly is true.
Housing expenses / all expenditures
Deflation in other segments allows more income thrown into housing.
Plus lower interest rates continue to push price up.
Plus also dis-saving. If home prices go up & up, people's home equity becomes their life savings, augmenting if not taking the place of 401k contributions etc.
All other markets are even more nuts than the USA -- Canada, Australia, England, the Nordic countries, probably even Germany by now.
Japan crashed a long time ago but the home prices in Tokyo are still quite high compared to the US (but 1% interest rates help out there a lot)
First off the US has had house cost inflation from the Subprime/CRA that has gone up. US has had dramatic reduction in manufacturing/R&D and wagers. However public sector wages and retirement have increased significantly compared to private section.
Regulation of all sorts and higher % of tax dollars going to civil servants and the effects have not fully hit yet.
ZIRP was a temporary fix that essentially rewarded bad banks and CRAer/Cwider twice. 1) bail out of banks and buyer who spent excessively with bad credit creation. 2) ZIRP which continues to reward those that created the financial mess.
Where did the $10Trillion bubble money go to then? Its getting tranfered into lower interest rates and higher debt and malivestment. We have job security for public servants and the close associate lawyers and accountants and denizon of social sciences.
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Excess debt is the only way. This is not good.