Will housing ever be affordable again?

[skyrunner1]

What Is the Median Household Income? - NerdWallet

Median household income declined from 2021 to 2022 by 2.3%, according to 2022 U.S. Census Bureau data.

www.nerdwallet.com

The national median household income is $74,580

NAR Finds Typical Home Buyer's Annual Household Income Climbed to Record High of $107,000 in Wake of Rising Home Prices and Mortgage Rates

Buyer income annual increase of 22% is largest on record (from $88,000 in 2022 report); down payments jumped to highest percentages in two decades.

www.nar.realtor

The median household income for home buyers jumped to $107,000

That's a $32,420 difference. The median income in United States of America was $34,429

United States of America - Place Explorer - Data Commons

Data Commons aggregates and harmonizes global, open data, giving everyone the power to uncover insights with natural language questions

datacommons.org

That means the median family needs almost a whole additional income from a person to buy a median home.

ehh, maybe I am looking at it wrong or maybe I am just behind the times when you say "family" you mean automatically man is gone? because your median income is one person/one income and household I am assuming is two incomes. When they say household income is it wrong to assume two people led household?

 

[Conan]

This can easily be solved in a decade. The federal government can build masses of apt buildings for the working class. This will put Americans to work and put billions into hands of those needed good work. The Soviet Union did this.

If the govt decided to compete with greedy developers and establish a new “market rent” value in these markets where it’s artificially inflated the housing crisis would end.

That's it.

But it would tank home values, so that's a no no for hotepconomists

 

[CashmereThoughts]

That's it.

But it would tank home values, so that's a no no for hotepconomists

What I don’t understand is why the general public isn’t demanding this from Jo Byron

 

[Dipsey Doo]

Copying ideas from a failed state like the Soviet Union, brehs

 

[CrimsonTider]

This can easily be solved in a decade. The federal government can build masses of apt buildings for the working class. This will put Americans to work and put billions into hands of those needed good work. The Soviet Union did this.

If the govt decided to compete with greedy developers and establish a new “market rent” value in these markets where it’s artificially inflated the housing crisis would end.

 

[Uitomy]

America is cooked. Whatever the solution is, we gotta accept it’ll probably end up killing a lot of folks

 

[Insensitive]

I own one property already, so somewhere it's affordable.

I'll have another in six months.

So, I personally like the high interest rate market.

Makes it easier to invest.

 

[Formerly Black Trash]

Nvm

 

[winb83]

ehh, maybe I am looking at it wrong or maybe I am just behind the times when you say "family" you mean automatically man is gone? because your median income is one person/one income and household I am assuming is two incomes. When they say household income is it wrong to assume two people led household?

Median family income is just that. It doesn't assume the man is gone. That's usually a man and a woman both in the same household. That combination usually results in that income. Sometimes the man works and the woman stays at home and sometime both work or the woman works and the man stays at home.

That median family still comes up a full income short of the median family income of homebuyers.

 

[Insensitive]

There are several different problems happening at the same time.

1. Stagnating wages.
They simply aren't increasing fast enough and due to this, there's less buying power from would be homeowners.

2. Low Supply/High Demand.
Housing simply isn't being built at the rate it's meant to be built. More people growing up, getting careers & startin their lives
and as they do so, homes are still behind the rate they need to be built to the tune of 500,000 a year or something like that.

3. High interest rate environment.
High interest rates don't just stabilize home prices, they directly impact the price of materials and labor which also slows down building
which (again) puts pressure on housing prices due to being unable to meet the demand.

4. Small Investors and Corporations,
Those who CAN afford, realize how powerful of an asset Real Estate is.
Due to this, they purchase and those purchases are typically done in markets where they handily outdo
would be homeowners because they can either outbid them or have direct access to product
(like off markets, seller financing and other strategies). Which means you have properties that are basically just
going from one investor to another.


All I hope is that this environment lasts for a few years while I kick off my Real Estate Investment business.
If I can get to five properties in 2 and a half years, I can slowly taper off of using my W2 income to build the business.
At that point, equity and rents will sustain the business over time, setting me up to grow my portfolio.

I sincerely feel that there are few avenues to wealth in America and Real Estate + Equities will get me there because
I don't plan on starting any other business ventures until I solidify my financial base (1 million+).


Also the tax benefits are great but because my income is relatively high, I can only marginally enjoy them.

 

[skyrunner1]

There are several different problems happening at the same time.

1. Stagnating wages.
They simply aren't increasing fast enough and due to this, there's less buying power from would be homeowners.

2. Low Supply/High Demand.
Housing simply isn't being built at the rate it's meant to be built. More people growing up, getting careers & startin their lives
and as they do so, homes are still behind the rate they need to be built to the tune of 500,000 a year or something like that.

3. High interest rate environment.
High interest rates don't just stabilize home prices, they directly impact the price of materials and labor which also slows down building
which (again) puts pressure on housing prices due to being unable to meet the demand.

4. Small Investors and Corporations,
Those who CAN afford, realize how powerful of an asset Real Estate is.
Due to this, they purchase and those purchases are typically done in markets where they handily outdo
would be homeowners because they can either outbid them or have direct access to product
(like off markets, seller financing and other strategies). Which means you have properties that are basically just
going from one investor to another.


All I hope is that this environment lasts for a few years while I kick off my Real Estate Investment business.
If I can get to five properties in 2 and a half years, I can slowly taper off of using my W2 income to build the business.
At that point, equity and rents will sustain the business over time, setting me up to grow my portfolio.

I sincerely feel that there are few avenues to wealth in America and Real Estate + Equities will get me there because
I don't plan on starting any other business ventures until I solidify my financial base (1 million+).


Also the tax benefits are great but because my income is relatively high, I can only marginally enjoy them.

What is the plan for your biz? Buy and hold, single/multi family? I wonder how that looks in this day and age with high prices, interest rates, taxes and insurance.. These numbers dont even make sense nowadays.. I remember getting in and the buy and hold guys used to turn their nose at anything under 2% rule.. Now people will take 1% with a smile..

I actually need to go bump the real estate thread in 6 fig

 

[69 others]

LVT (Land Value Tax) will sort out rich people and corporations owning vacant multiple homes.

Corporations are buying single family homes and turning every room in the house except kitchen, dining and bathrooms into rentals

Population in America has jumped from 225 million to 350 million in my lifetime

These people need to live somewhere

Supply and demand says these prices never go down unless the population goes down

So, about this.

the reality is that housing for profit is what drives these prices...not scarcity of available housing in relation to population increase.


NIMBYism aside, housing projects initiatives and rent rollbacks/control would solve the problem of unchecked inflation.


One of the biggest things we don't see enough pushback on, is why we've accepted arbitrary yearly increases in rent...and developers artificially inflating housing prices with new developments and the consequences of what it does to surrounding areas.

People love blaming corporations or investors for the current situation but honestly, it's American homeowners and their attitude towards home ownership that's the real problem.

Americans treat homes like investments. everyone expects or wants their home to appreciate, to either sell at a profit or borrow against the appreciation.

This leads to nimbyism, classism, and racism which is the real reason why more houses (especially starter houses) are not being built where they are needed. The shortage attracted big investors who normally ignored the housing market.

 

[HabitualChiller]

Yes.

It will have to involve significant regulations on real estate investment trusts(REIT) and barriers on private equity firms to keep them from buying any property that is not used as a residence. In essence, companies will be kept out of buying homes.

A few big banks will also need partial ownership by government. If the government is a major shareholder and has veto power, it stops housing speculation dead in its tracks.

Elected officials will also have to be prohibited from trading stock and must have their assets put in a blind trust. They can only access their funds in the event of a personal emergency but otherwise they must live off the salary they make as an elected official which cannot exceed more than 1.5x the national average income.

Lobbying itself will have to be made expressly illegal, and cities will have access to federal funds for affordable housing if their zoning laws show a clear prioritization for housing as many people as possible.


We will get these reforms only after a gigantic war pops off or the tech bubble bursts and takes 2 or more big companies or VC firms down with it. The good(or bad depending on your perspective) news is that is going to happen in the next 15-30 years. If you can wait, you will get to spend your 40s 50s or 60s in your own home.

That's a hard sell, my guy.

Very few kats will be willing to wait for that, especially Gen Z.

You're not wrong, but fukk, lol. I can get a house anytime with my VA Loan, but civilian kats being assed out until 2045 would be feeling some kind of way.

 

[Formerly Black Trash]

That's a hard sell, my guy.

Very few kats will be willing to wait for that, especially Gen Z.

You're not wrong, but fukk, lol. I can get a house anytime with my VA Loan, but civilian kats being assed out until 2045 would be feeling some kind of way.

VIVA LA REVOLUTION

 

[DJSmooth]

That's it.

But it would tank home values, so that's a no no for hotepconomists

Don't hoteps love communism? Wrong terminology.