Housing Affordability Over the Years

A post in the thread about changes to the pension systems over the years caused me to go looking for this data.



https://dqydj.com/historical-home-affordability/

It looks like the other time in history when housing prices were this unaffordable was when the baby boomers started buying houses, which makes sense, as demand went way up then, too.  Now we have the echo boomers moving into houses, plus a profit move by investment companies of buying single family homes to rent out during the aftermath of the 2008 crash.

edit - it could be that the peaks in the early 1980's and now are partly due to interest rates, too.

Trapper Gus wrote:A post in the thread about changes to the pension systems over the years caused me to go looking for this data.



https://dqydj.com/historical-home-affordability/

It looks like the other time in history when housing prices were this unaffordable was when the baby boomers started buying houses, which makes sense, as demand went way up then, too.  Now we have the echo boomers moving into houses, plus a profit move by investment companies of buying single family homes to rent out during the aftermath of the 2008 crash.

edit - it could be that the peaks in the early 1980's and now are partly due to interest rates, too.

It's crazy out in my 'hood. The home I bought 3 years ago is now appraised at double what I paid for it. But financing that same purchase price at today's interest rates would double my mortgage payment. I've noticed the higher end homes have definitely slowed. They're staying on the market longer, and there's not the bidding wars there were previously.

Back when I bought my first house the interest rates were between 13% to 15% for a conventional 15 year mortgage.

Trapper Gus wrote:Back when I bought my first house the interest rates were between 13% to 15% for a conventional 15 year mortgage.

I think the first mortgage I ever had was around 8.5% for 30 years. I remember when we refinanced it down to 4.25% and I thought the world was sunny and beautiful.

One of my mortgages is currently at 2.5% and is about to be paid off. I'm wishing there was a way to extend it another 15 years! LOL

TravelinMan wrote:

One of my mortgages is currently at 2.5% and is about to be paid off. I'm wishing there was a way to extend it another 15 years! LOL

Would be smart as you would be making the same payment but in less valuable dollars.

TravelinMan wrote:

Trapper Gus wrote:Back when I bought my first house the interest rates were between 13% to 15% for a conventional 15 year mortgage.

I think the first mortgage I ever had was around 8.5% for 30 years. I remember when we refinanced it down to 4.25% and I thought the world was sunny and beautiful.

One of my mortgages is currently at 2.5% and is about to be paid off. I'm wishing there was a way to extend it another 15 years! LOL

It is too late now but you should always maintain maximum leverage for your existing cash flow to service at the lowest rate possible.

in history when housing prices were this unaffordable was when the baby boomers started buying houses, which makes sense, as demand went way up then, too.  Now we have the echo boomers moving into houses, plus a profit move by investment companies of buying single family homes to rent out during the aftermath of the 2008 crash.

Is "echo boomers" a real measurable thing? I'm not criticizing the concept, just curious because I don't know.

It's not like we are cicadas that periodically hatch every 7 years and breed, producing children all at the same time.  Even if we did have some kind of cultural shift or event that produced way more kids than usual over a short period of time (say over 5 years), the echo generations would be spread out much more than that as those kids have kids at the times of their choosing.  I would expect a muted echo materializing slowly lasting for a period of something like 25 years, with a peak of an echo somewhere in between.  The point is, i'm not sure anybody would be able to see it and attribute it to boomer echo as it may just look like a slightly steeper line for 25 years. And then by the end of the echo you might have members of the echo forming an echo of their own and it all just blends together. So first you would have to prove that the boomer generation was an extreme oddball historically that you would even be able to see or if it is part of an echo of another boom thats all blending together over time forming an ever increasing sharper curve of total population.

sεяεηιτλ wrote:

in history when housing prices were this unaffordable was when the baby boomers started buying houses, which makes sense, as demand went way up then, too.  Now we have the echo boomers moving into houses, plus a profit move by investment companies of buying single family homes to rent out during the aftermath of the 2008 crash.

Is "echo boomers" a real measurable thing? I'm not criticizing the concept, just curious because I don't know.

It's not like we are cicadas that periodically hatch every 7 years and breed, producing children all at the same time.  Even if we did have some kind of cultural shift or event that produced way more kids than usual over a short period of time (say over 5 years), the echo generations would be spread out much more than that as those kids have kids at the times of their choosing.  I would expect a muted echo materializing slowly lasting for a period of something like 25 years, with a peak of an echo somewhere in between.  The point is, i'm not sure anybody would be able to see it and attribute it to boomer echo as it may just look like a slightly steeper line for 25 years.  And then by the end of the echo you might have members of the echo forming an echo of their own and it all just blends together.  So first you would have to prove that the boomer generation was an extreme oddball historically that you would even be able to see or if it is part of an echo of another boom thats all blending together over time forming an ever increasing sharper curve of total population.  

Earlier on during the millennial birth years it was called the echo boom, and it can be seen on the graph in the wiki link attached, though since the graph is in births per population it hides the raw numbers of births during the echo boom.

Right now there are more living echo boomers than baby boomers, their economic impact is a significant factor.

https://en.m.wikipedia.org/wiki/Mid-20th_century_baby_boom

https://www.mlive.com/public-interest/2023/04/michigan-home-sales-jump-28-as-mortgage-rates-simmer.html

Springtime brought homebuyers back on the market as Michigan’s home sales shot up in March, following a national trend of rising home sales.

Existing home sales in March were 28% higher than February’s stagnant market in the lower peninsula, according to Realcomp data, a Michigan-based real estate data company.

Nationally, existing home sales jumped 14.5% month-over-month. This was a significant break in the housing market’s plateau. March was the first monthly gain in 12 months, and the largest monthly increase since July 2020, according to the National Association of Realtors.

Pending sales have continued to improve as well, increasing for the third consecutive month, according to the association.

I'm getting the feeling that people's feelings about the economy and the economy itself are about as far apart as they can be.

tNYT wrote:My family is part of a national pattern. Over the past decade, college graduates have joined a trend that was already evident among lower-income Americans. They are increasingly moving out of the country’s most expensive metropolitan areas, according to a Times analysis of census data.

So how long before the East Coast snobs realize that the Great Lakes are not "lakes" but inland "seas" and start moving to areas along the coasts of the Great Lakes?

Related: 40 years ago, I worked with a guy from New Jersey who was transferred to SE Michigan, one Monday he can into work and told us he had driven over the Lake Michigan, his comment was "you can't see the other side, its like an ocean".  People who haven't grown up around the Great Lakes really think they are "lakes".

Trapper Gus wrote:

tNYT wrote:My family is part of a national pattern. Over the past decade, college graduates have joined a trend that was already evident among lower-income Americans. They are increasingly moving out of the country’s most expensive metropolitan areas, according to a Times analysis of census data.

So how long before the East Coast snobs realize that the Great Lakes are not "lakes" but inland "seas" and start moving to areas along the coasts of the Great Lakes?

Related: 40 years ago, I worked with a guy from New Jersey who was transferred to SE Michigan, one Monday he can into work and told us he had driven over the Lake Michigan, his comment was "you can't see the other side, its like an ocean".  People who haven't grown up around the Great Lakes really think they are "lakes".

There are plenty of Midwestern snobs already. A little diversification among the snobbery might be good.

Heat Miser wrote:

Trapper Gus wrote:

So how long before the East Coast snobs realize that the Great Lakes are not "lakes" but inland "seas" and start moving to areas along the coasts of the Great Lakes?

Related: 40 years ago, I worked with a guy from New Jersey who was transferred to SE Michigan, one Monday he can into work and told us he had driven over the Lake Michigan, his comment was "you can't see the other side, its like an ocean".  People who haven't grown up around the Great Lakes really think they are "lakes".

There are plenty of Midwestern snobs already. A little diversification among the snobbery might be good.

Touche...

Besides, they will all move to Chi-town.

Trapper Gus wrote:

Heat Miser wrote:

There are plenty of Midwestern snobs already. A little diversification among the snobbery might be good.

Touche...

Besides, they will all move to Chi-town.

Michigan can pretty much use anybody that wants to move here. The younger the better.

[tw]1658446092655276032[/tw]

Michigan can use population growth made up of younger demographic.

However like already seen in upper Michigan, especially in the upper third of the lower peninsula, retirees from Northern IL, Ohio plus those who left MI after school, did well on the West Coast or North East cash selling their homes and returning with a pile of cash. They have driven prices higher.

It’s lake front on the north shore of Little Glen a cottage built in 1957 on a small lot that looked like was remodeled n the ‘80’s sold for $1.8M this year. That’s a cottage to become a full time lakefront home. Same thing is happening with smaller homes and condos in those upper MI counties.

Also happening in VT, ME and Finger Lakes in NY. with NYC, CT and Boston area retirees pushing younger people out of the housing market.

Heat Miser wrote:

Trapper Gus wrote:

So how long before the East Coast snobs realize that the Great Lakes are not "lakes" but inland "seas" and start moving to areas along the coasts of the Great Lakes?

Related: 40 years ago, I worked with a guy from New Jersey who was transferred to SE Michigan, one Monday he can into work and told us he had driven over the Lake Michigan, his comment was "you can't see the other side, its like an ocean".  People who haven't grown up around the Great Lakes really think they are "lakes".

There are plenty of Midwestern snobs already. A little diversification among the snobbery might be good.

khakis and golf.

sign me up.

GRR Spartan wrote:Michigan can use population growth made up of younger demographic.

However like already seen in upper Michigan, especially in the upper third of the lower peninsula, retirees from Northern IL, Ohio plus those who left MI after school, did well on the West Coast or North East cash selling their homes and returning with a pile of cash.  They have driven prices higher.

It’s lake front on the north shore of Little Glen a cottage built in 1957 on a small lot that looked like was remodeled n the ‘80’s sold for $1.8M this year.  That’s a cottage to become a full time lakefront home.  Same thing is happening with smaller homes and condos in those upper MI counties.

Also happening in VT, ME and Finger Lakes in NY.  with NYC, CT and Boston area retirees pushing younger people out of the housing market.

Lake cottages become year round homes, especially in areas of high sand content soils puts some drive into the Michigan's legislature move to create state wide septic system inspection and standards.

Also the sunset side has become popular, but not so much the sunrise side.

Trapper Gus wrote:

GRR Spartan wrote:Michigan can use population growth made up of younger demographic.

However like already seen in upper Michigan, especially in the upper third of the lower peninsula, retirees from Northern IL, Ohio plus those who left MI after school, did well on the West Coast or North East cash selling their homes and returning with a pile of cash.  They have driven prices higher.

It’s lake front on the north shore of Little Glen a cottage built in 1957 on a small lot that looked like was remodeled n the ‘80’s sold for $1.8M this year.  That’s a cottage to become a full time lakefront home.  Same thing is happening with smaller homes and condos in those upper MI counties.

Also happening in VT, ME and Finger Lakes in NY.  with NYC, CT and Boston area retirees pushing younger people out of the housing market.

Lake cottages become year round homes, especially in areas of high sand content soils puts some drive into the Michigan's legislature move to create state wide septic system inspection and standards.

Also the sunset side has become popular, but not so much the sunrise side.

In 20-30 more years the eastern shore is going to be looking just as nice as when cli-MI-gration really kicks in.

My post yesterday was partly a joke, so today I am reading about people from CA moving to Deluth.

https://phys.org/news/2023-05-frigid-city-haven-climate-era.html

Trapper Gus wrote:My post yesterday was partly a joke, so today I am reading about people from CA moving to Deluth.

https://phys.org/news/2023-05-frigid-city-haven-climate-era.html

I hope the cautionary warnings at the end of that article are heeded, and read by all communities above the 45th parallel.

Trapper Gus wrote:My post yesterday was partly a joke, so today I am reading about people from CA moving to Duluth.

https://phys.org/news/2023-05-frigid-city-haven-climate-era.html

my kind of people.

I spent a year in the cities so went up to the north shore a few times, it will be an issue if too many people move there