Affordability discussion (split from Iran thread)

[05_never_again]

Housing prices spiked when Joe Biden pumped 4 trillion dollars into the economy. Houses in my neighborhood doubled in 18 months. In addition, Biden let in 10M illegals which created a spike in demand for housing.

The post-COVID housing price spike was mostly caused by the Federal Reserve buying MBS. Their balance sheet went from $3.8T to a peak just shy of $9T from August 2019 to March 2022. When Trump left office, it was at $7.4T (almost doubled). They added another 20% after Biden took office.

Most of the inflationary fuel was monetary (not fiscal) stimulus that occurred during Trump's first term. Yes, the stimmies that continued to occur after didn't help either.

As for illegal immigration, I don't deny that also played some kind of a role but I don't see house prices dropping with all the deportations. Impacts of reduced demand for housing might be offset by deporting illegals who work in construction.

 

[85SugarVol]

Money from easing wasn't distr8buted equally throughout society. It was given to banks who loaned it to investors. The investors bought financial assets which went up greatly in value. As a part of diversifying their wealth, investors turned to real estate with the money they'd made in the markets. It caused real estate values to advance more rapidly than wages. Generally the ability of people who've participated in the markets to maintain their standard of living by selling stocks etc which have appreciated greatly has sustained our economy though the resulting inflation has left the people who don't own sticks etc behind. Trumps trade war hasn't helped either. Under these conditions, a wealth tax would be the best way to restore some order to our economy.

Wealth Tax is always a great idea. So many success stories out there. We should definitely do that.

 

[volfanhill]

The post-COVID housing price spike was mostly caused by the Federal Reserve buying MBS. Their balance sheet went from $3.8T to a peak just shy of $9T from August 2019 to March 2022. When Trump left office, it was at $7.4T (almost doubled). They added another 20% after Biden took office.

Most of the inflationary fuel was monetary (not fiscal) stimulus that occurred during Trump's first term. Yes, the stimmies that continued to occur after didn't help either.

As for illegal immigration, I don't deny that also played some kind of a role but I don't see house prices dropping with all the deportations. Impacts of reduced demand for housing might be offset by deporting illegals who work in construction.

We spent almost 12 years trying to do 0% interest rates. We felt the dumbass impact of those roosters coming home to roost. We took a decades worth of inflation in one hit. And no employer is going to do that in turn. So here we are

 

[BigOrangeMojo]

Wealth tax is one of the stupidest ideas out there....

Cut the spending, cut the tax cose preferences. Do not implement a convoluted scheme that goes against any semblence of good tax policy...

 

[Berry4Heisman14]

Housing prices spiked when Joe Biden pumped 4 trillion dollars into the economy. Houses in my neighborhood doubled in 18 months. In addition, Biden let in 10M illegals which created a spike in demand for housing.

Joe Biden is a fascist clown but everything you just said sounds like a bunch of right wing propaganda to me.

 

[volfanhill]

Money from easing wasn't distr8buted equally throughout society. It was given to banks who loaned it to investors. The investors bought financial assets which went up greatly in value. As a part of diversifying their wealth, investors turned to real estate with the money they'd made in the markets. It caused real estate values to advance more rapidly than wages. Generally the ability of people who've participated in the markets to maintain their standard of living by selling stocks etc which have appreciated greatly has sustained our economy though the resulting inflation has left the people who don't own sticks etc behind. Trumps trade war hasn't helped either. Under these conditions, a wealth tax would be the best way to restore some order to our economy.

This is scary a post. 75% of workers have acces to a 401k. It's a them problem

 

[85SugarVol]

Wealth tax is one of the stupidest ideas out there....

Cut the spending, cut the tax cose preferences. Do not implement a convoluted scheme that goes against any semblence of good tax policy...

Upwards of $80 Trillion in wealth is going to naturally disperse (to an extent) over the coming years. But yea, let’s execute a State mandated wealth tax. That will be great…

You have any thoughts on the Boomer Asset Mirage theory?

 

[Wireless1]

Once again irrelevant. You get into this stupid arguments based on semantics. I'll let the math talk. No matter how you dice it, it's much more difficult today. I'm sorry that hurts your feelings so badly.

Average household income
1960 $5,600
1980 $21,000
2000 $42,000
2026 $78,000

Average home cost
1960 $11,900
1980 $47,000
2000 $ 119,000
2026 $ 420,000

Income to price ratio
1960 2.1x
1980 2.2x
2000 2.8x
2026 5.4x

You're welcome. Once again, it's not an argument. Its a fact that younger generations financially have a much tougher time regardless of their financial acumen as base shelter and living costs are much higher than they were in previous decades when accounting for their actual spending power. Not an argument.

You didn’t include the the average sqft in 1960 was 1200 and today is 2200. And 1 bath versus 2.5. And rather than encourage builders to build “starter” homes, we decide that we’ll subsidize (section8) nice big homes for those that can’t afford them rather than supply something they could afford.

 

[MurphyVol]

Once again irrelevant. You get into this stupid arguments based on semantics. I'll let the math talk. No matter how you dice it, it's much more difficult today. I'm sorry that hurts your feelings so badly.

Average household income
1960 $5,600
1980 $21,000
2000 $42,000
2026 $78,000

Average home cost
1960 $11,900
1980 $47,000
2000 $ 119,000
2026 $ 420,000

Income to price ratio
1960 2.1x
1980 2.2x
2000 2.8x
2026 5.4x

You're welcome. Once again, it's not an argument. Its a fact that younger generations financially have a much tougher time regardless of their financial acumen as base shelter and living costs are much higher than they were in previous decades when accounting for their actual spending power. Not an argument.

Define "tougher" I don't think it was easy to save up a huge down payment and pay double digit interest rates for small tract houses with poor insulation and linoleum floors.

I can fix the affordability issue in 5 minutes. Get rid of low down payment mortgages and jack up interest rates to double digits and they'll be giving houses away.

But it would still be no easier than it is today.

 

[marcusluvsvols]

Fair enough, I do disagree though. I think if anything it will continue to get progressively worse. Its not like any good news is coming down the pipe.

Hog will probably disagree, and I respect his opinion, but the older generation is completely blind to this. Or they don't care, not sure which.

Its going to create a lot of apathetic people who completely disengage from society (already happening) and it will also probably cause some radicalization as well. Kids were sold a false reality.

As parents of a 24yo and 17yo, my generation is well aware of some of the challenges young people face today, because todays teens and college kids are our children. I worry about it regularly and have posted about it. Home prices doubling absolutely wrecked anyone who didnt already own a home. That one is by far the worst factor IMO. I share your concerns bud. I worry about my kids and eventual grandkids in a country that is going to sheit rapidly too.
For those of us who were 80s kids and 90s teens etc, this country is a FAR cry from what it used to be. My son is married now, out of college, and doing well. Off to a good start. My daughter is 17, in college and HS, and we talk regularly about her path as an adult. She has 1year until she's done with HS and her core undergrad classes and has to decide what she wants to be when she grows up. She is interested in nursing, accounting, and veterinary tech which doesn't pay nearly what the other 2 careers pay. I worry all the time that I am gonna die before she is stable as an adult. I understand your concern.

Side note : What's crazy is kids today sometimes call anyone with some grey hair a Boomer. Boomer is short for "Baby Boomer" and describes all the babies born to troops when they came home from WW2 in the 1940s. While I have some grey hair at 49yo, my parents are actually a little too young to be Boomers. They were born in the 1950s.

 

[BigOrangeMojo]

As parents of a 24yo and 17yo, my generation is well aware of some of the challenges young people face today, because todays teens and college kids are our children. I worry about it regularly and have posted about it. Home prices doubling absolutely wrecked anyone who didnt already own a home. That one is by far the worst factor IMO. I share your concerns bud. I worry about my kids and eventual grandkids in a country that is going to sheit rapidly too.
For those of us who were 80s kids and 90s teens etc, this country is a FAR cry from what it used to be. My son is married now, out of college, and doing well. Off to a good start. My daughter is 17, in college and HS, and we talk regularly about her path as an adult. She has 1year until she's done with HS and her core undergrad classes and has to decide what she wants to be when she grows up. She is interested in nursing, accounting, and veterinary tech which doesn't pay nearly what the other 2 careers pay. I worry all the time that I am gonna die before she is stable as an adult. I understand your concern.

Side note : What's crazy is kids today sometimes call anyone with some grey hair a Boomer. Boomer is short for "Baby Boomer" and describes all the babies born to troops when they came home from WW2 in the 1940s. While I have some grey hair at 49yo, my parents are actually a little too young to be Boomers. They were born in the 1950s.

Ok boomer

 

[Wireless1]

“Back in the 1990s, nearly 70% of the total wealth belonged to working-age households. Since then, the share of wealth has steadily shifted. Now, roughly 65% is with those 60 and up.

Due to older Americans having had more time to watch their assets grow and to experience compounding returns, it’s likely the wealth has become more concentrated to those generations.

This could suggest owning assets like real estate or securities for the long-term results in greater value. In comparison, younger generations haven’t had nearly as much time to watch their assets grow.

The cost of living should also be factored in.

Take housing as an example. As of Q1 2025, the average sales price of homes sold in the U.S. was $514,200, per the Federal Reserve Bank of St. Louis. Back in Q1 1964, that number was $19,600. That same $19,600 house would only cost $205,357 when adjusted for inflation.“

https://finance.yahoo.com/news/much-wealth-boomers-generational-gap-095704268.html

Your COL valuation for home built in 1964 doesn’t work. A 3bed 2bath home in knoxville built in 1964 on fountain blvd is listed for sale at $450k. Allowing large institutional investors to “invest” in single family homes has had the most significant impact on escalating valuations.

 

[kiddiedoc]

With few exceptions, purchasing a home is a better option than renting, provided you can afford a down payment and avoid paying PMI.

We bought our first house in 2001 on dual menial incomes while I was a resident (paid c. $170k in the Tampa area), were diligent building equity, made a little money with each move, and just paid off our mortgage here 3 months ago.

That path would be significantly more difficult had we started in the current financial landscape.

 

[Wireless1]

One of the prevailing themes in one of the surveys someone linked earlier was -

I’ll never be able to afford a house “that I want” so why bother saving.

I remember an appraiser coming to our home many years ago, walking through the house noticing each child had a bedroom with a TV and a computer, and him saying, why would your kids ever want to leave….he grew up in a house where he shared a 10x10 bedroom with 3 brothers, 2 sets of bunk beds, one dresser that they each got a drawer…,he said as soon as he graduated HS he was out of there…

 

[MurphyVol]

Stop drilling it into your kids heads that they're "throwing money away" on rent. We scratched together about $30k and built a home. We paid a mortgage payment for 26 years and sold the home for $450,000.

We could have invested the original $30k, rented and had about $550/mo extra (between rent being cheaper than the payment + $ spent on insurance, property taxes and maintenance). So you add that monthly to your investment as well. Instead of $450k we would have had roughly $1.4 million.

 

[marcusluvsvols]

The Knoxville area has ranked at or near the highest rate of home cost increase in the nation in the past 6+ years. Desirable areas have easily doubled in price in that time, and many have actually tripled in just over a decade. Homes in our old Lenoir City neighborhood have rocketed from $200k to $700-800k since 2009 (when we moved out of there). $1M in Farragut gets you a nice but not extravagant 4-5 BR. There are 26 homes in my zip code alone for sale over a million, several over 2, and they are not on the water (like many in the 37922 zip). It's unreal.

At the end on the day, it's simple economics -- the demand from the influx of population leaving higher-cost states has overwhelmed the supply, and they are willing to pay. It has killed younger people and families living on lower or middle-income wages.

Charlotte is the same. My wife is a realtor.

 

[marcusluvsvols]

Ok boomer

I only wondered which one/how many of you heathens would post this. whether it would be posted was never in question.

 

[marcusluvsvols]

Stop drilling it into your kids heads that they're "throwing money away" on rent. We scratched together about $30k and built a home. We paid a mortgage payment for 26 years and sold the home for $450,000.

We could have invested the original $30k, rented and had about $550/mo extra (between rent being cheaper than the payment + $ spent on insurance, property taxes and maintenance). So you add that monthly to your investment as well. Instead of $450k we would have had roughly $1.4 million.

That's interesting. Rents have gone way up with house prices. @McDad here makes a living off the difference between mortgage payments and what he can charge in rent for the same properties. I am sure he probably owns some free and clear too, but the point being that rent is higher than mortgage payments on properties in desirable areas these days. A great way to build wealth if you have the credit is to buy places and rent them. People do this with expensive beach condos too. Rent them until the mortgage is paid off and then own them free and clear having never made payments out of their own money. What you can charge per week all summer pays the mortgage year round, the management and cleaning fees AND still makes money every year in the process.

 

[BernardKingGOAT]

As parents of a 24yo and 17yo, my generation is well aware of some of the challenges young people face today, because todays teens and college kids are our children. I worry about it regularly and have posted about it. Home prices doubling absolutely wrecked anyone who didnt already own a home. That one is by far the worst factor IMO. I share your concerns bud. I worry about my kids and eventual grandkids in a country that is going to sheit rapidly too.
For those of us who were 80s kids and 90s teens etc, this country is a FAR cry from what it used to be. My son is married now, out of college, and doing well. Off to a good start. My daughter is 17, in college and HS, and we talk regularly about her path as an adult. She has 1year until she's done with HS and her core undergrad classes and has to decide what she wants to be when she grows up. She is interested in nursing, accounting, and veterinary tech which doesn't pay nearly what the other 2 careers pay. I worry all the time that I am gonna die before she is stable as an adult. I understand your concern.

Side note : What's crazy is kids today sometimes call anyone with some grey hair a Boomer. Boomer is short for "Baby Boomer" and describes all the babies born to troops when they came home from WW2 in the 1940s. While I have some grey hair at 49yo, my parents are actually a little too young to be Boomers. They were born in the 1950s.

Baby Boomers are the group born between 1945 and 1965, so your parents are boomers

 

[FLVOL_79]

Ah, see Hog you are proving my point. It hasn't, until now. That's the point.

Less spending power, lower home ownership rates, more competitive job market, more debt, wage stagnation, hyper inflation, etc. Gen Z will be the first generation where they overwhelmingly have a lower QOL than their parents. Young millennials probably count in this as well.

GenZ deserves it though for being "loosers".

 

[MurphyVol]

That's interesting. Rents have gone way up with house prices. @McDad here makes a living off the difference between mortgage payments and what he can charge in rent for the same properties. I am sure he probably owns some free and clear too, but the point being that rent is higher than mortgage payments on properties in desirable areas these days. A great way to build wealth if you have the credit is to buy places and rent them. People do this with expensive beach condos too. Rent them until the mortgage is paid off and then own them free and clear having never made payments out of their own money. What you can charge per week all summer pays the mortgage year round, the management and cleaning fees AND still makes money every year in the process.

Investors often put a nice chunk down to make the payments lower. But yes, you can sometimes find properties with a nice spread between the mortgage payment and the rent- especially in the short term rental situation you're talking about.

However in a rural area like I live in, the rent people can pay is capped by wages and reality. A single wide can rent for $1200/mo but you can't get $15k a month for a million dollar home.

I saw a couple recently with little to no down payment walk away from a 2500 SQ ft rental home to buy a new 1800sq home and their payment was almost $1k more than their rent (not counting insurance, taxes and coming repairs).

They felt like they had to because they were "throwing money away" They're mid 50s, so if they can manage to beat the life expectancy for their age group, they'll be able to grab their cane and sit on their porch (which will be I desperate need of repairs) and enjoy their mid 80s knowing they finally own a 30!year old home that now needs its second roof replacement.

 

[MurphyVol]

Housing prices spiked when Joe Biden pumped 4 trillion dollars into the economy. Houses in my neighborhood doubled in 18 months. In addition, Biden let in 10M illegals which created a spike in demand for housing.

Biden was a moron but the massive money printing was done in 2020. At the time they created 20% of all dollars in American history in one year. And just to throw a little more gas on fire, they took interest rates to near zero

*In 2020, the U.S. Federal Reserve created roughly $3.38 trillion to $4 trillion in new money, representing about 18% to over 20% of the total U.S. dollar money supply (M2) at the time. This rapid expansion, driven by pandemic-era stimulus, marked one of the largest single-year increases in the money supply.

 

[BreatheUT]

Housing prices spiked when Joe Biden pumped 4 trillion dollars into the economy. Houses in my neighborhood doubled in 18 months. In addition, Biden let in 10M illegals which created a spike in demand for housing.

Plus the sharp increase in interest rates.

Now to be fair, the initial covid relief payments were not well thought out but we didn't have the commodity of time on our side when they made people stay home while they figured out what was going on. Biden did turn around the next year and send out more checks after people were back at work.

 

[OHvol40]

Your COL valuation for home built in 1964 doesn’t work. A 3bed 2bath home in knoxville built in 1964 on fountain blvd is listed for sale at $450k. Allowing large institutional investors to “invest” in single family homes has had the most significant impact on escalating valuations.

It’s not mine, I provided the link to the source though.

 

[Wireless1]

It’s not mine, I provided the link to the source though.

I know and I’m not throwing stones.
I’m just pointing out that in the last 5 or so years, at least in ETN, home prices have skyrocketed at a rate much higher than inflation after tracking with inflation for decades.