Interesting charts – make of them what you wish. It is also reported that 40% of homes are not carrying any mortgage at this time. Also that a better comparison would be income to monthly payment, rather than home price. Of course, someone is surely shouting “But it’s different this time!”
Fair to note that the cost of housing may be higher, even much higher, for many (depends on where you live) – but the expected standard of living has also changed. For us, our first home was a fixer upper, previously a rental property owned by 8 out of state investors. Trashed, it had not sold for six months when we stepped into buy it – by assuming a first and second mortgage with a combined interest rate of 11.2% and a 5 year balloon payment. The home has been built in the late 1940s, was about 900 sq ft, and old everything. We put three years of our own sweat equity into it, plus hired a contractor to add a master bedroom, bathroom and a family room area. We tore out and replaced a lot, updated the kitchen and the existing single bath. By the time we finished it was about 1400 sq ft, which is considerably smaller than the average 2600 sq foot new homes sold today. Please see How to show you know nothing of history without saying you know nothing of history – Social Panic (coldstreams.com) – for a LOT of economic details regarding differences between then and now.
