Comments
> The conventional explanation for what’s freezing young adults in place is that they can’t afford to grow up, given rising inflation and ballooning housing costs. Yet this doesn’t quite explain what’s going on.
> Median wages for full-time workers ages 35 to 44 are up 16% between 2000 and 2024, from $58,522 to $67,652 adjusted for inflation
- 2024 Median house price $402k
- 2000 Median house price $119k (or $216k in 2024 inflated dollars)
16% wage bump for a near-doubling of house prices? It seems like maybe the simplest explanation was right.
By staori13 2025-01-045:30 First off, your numbers are wildly off. Median Price in 2000 for both new homes and existing homes was well over $150,000 nominal (some data has existing close to 200).
That whole premise significantly misleading though. The median size of a single family home in 2000 was over 300(!)sqft smaller than the median size of a sfh in 2023. In the same period relative property tax outlays (pegged to constant valuation) have decreased. The housing market is in undeniably a bad spot, but median price vs median wage is such a misleading metric given how little of the picture it really provides.
Every 20 something parrots the "myth" that their parents could buy a house for say $70,000 or something vs $400,000 now. That myth is just false and lazy. In 1984 the median home price was approximately $90,000 nominal (rising to over $230,000 in 08, a similar increase as '00-'24) and the average interest rate was 13.88%. In 2024 those numbers were $400,000~ and 6.8%.
On an equivlent 30-y bill that works out to the following
- 2024 ($400,000/6.8%): $2405 (Nominal), $2405 (Real)
- 1984 ($90,000/13.8%): $1072 (Nominal), *$3246 (Real)*
Shockingly real prices of homeownership are cheaper in 2024 than in 1984. Tax & insurance rates have risen notably in that time so that full all-in difference is more marginal than the $841 here, but its still a remarkably counter-intuative fact. Only difference is in 2024 much more of our money goes into equity, while in the 80s and 90s it went to the bank.
By Terr_ 2025-01-019:39 As much as I prefer median over average for income discussions, it's worth noting that either half could get substantially worse/better without a detectable change in the median.
Hence the popularity of comparing distributions by using quintiles or quartiles.
By orionblastar 2025-01-018:19 Mirror without Paywall: https://archive.is/6kBWh
By cafard 2025-01-0115:36 They develop gray hair and a paunch, and settle in to write opinion pieces about the immaturity of their juniors. (Boomer speaking.)
