The 'old American Dream died,' Realtor details salary needed to buy a home, afford a middle class life in 2024
The 'old American Dream died,' Realtor details salary needed to buy a home, afford a middle class life in 2024
Orlando realtor Freddie Smith discusses how owning a home and living a typical middle class life has become increasingly unattainable for most millennials and older Gen Z.
TL;DR: Americans now need to make $120K a year to afford a typical middle-class life and qualify to purchase a home. Minimum.
Where we failed is that $120k was supposed to be a middle-class income when living costs this much. The fact the median is 63k is a sign that all the excess value has been sucked out of the masses and funneled into the coffers of the billionaire class.
I honestly don't even know why this upsets me so much. I am 50 and all set. I don't have children and barely any debt. I never considered myself particularly patriotic but somehow this whole thing gets under my skin. I guess it sours my achievements and fruits of decades of struggle (it took three generations of planning and hustle to get us out of poverty). It's like being a kid having a birthday party at Chuck E Cheese by yourself while all your friends are locked outside and you can see them through the glass windows.
TL;DR: Americans now need to make $120K a year to afford a typical middle-class life and qualify to purchase a home. Minimum.
Maybe in the middle of nowhere America. Meanwhile my wife and I make well above that in Los Angeles and we can't afford the monthly on a two bedroom house in a sketchy neighborhood.
Here's what happened in a nutshell.
Lyndon Johnson had great plans for the US, but wanted to win the Vietnam War with one huge push. That quickly turned into a giant quagmire. LBJ and later Nixon, ordered bombing of the North. That meant the US factories were working 24/7. Nice for factory owners and union workers, but LBJ was paying for it with paper money because he didn't want to raise taxes. Ironically, Nixon ran for President as an anti inflation and pro peace candidate.
Nixon and Kissinger doubled down on the bombing and inflation started to spiral. Also, those factories were getting a bit worn down. Unable to met the deamnd for the bombing and supply foreign markets the US ceded local steel making to Germany and Japan. This is going to bite the US in the ass when the Arab Oil boycott hits. US steel is much more oil dependant than the newer factories, so suddenly Toyotas and VWs are the hot cars, and US manufacturing takes a huge hit.
Carter tried to control inflation and cut oil use, but got kicked out over the Iran hostage mess. Reagan came in and cut taxes for the rich. This increased the debt, but gave the economy an unrealistic jolt.
tl dr. In 1960, minimum wage was $1.00/hour. The average house was $11,000.00 and $1 million was considered a vast fortune.* Middle class meant a High School graduate with a Union job supporting a family of four.
By the time Nixon, Reagan and Bush Sr were done, 'middle class' was two college degrees supporting the house and $1 million was what a rich guy paid for a party.
- In case anyone tells you that $1 million is 1960 would be $10 million today, tell them that in 1960, $100,000 would buy a mansion in Beverly Hills.
This is what happens when most people think the disparity in wealth should grow.
It does.
Mr Realtor can blame his own industry for a good portion of the problem.
Smith explained how, just a few years ago, $60-$70K a year would have been sufficient to qualify for a home.
Yeah, no. It was more than a few years ago.
I think that this has been trouble since 2007. Financial institutions went from giving lots of home loans to only giving corporations and the elite loans.
I will repeat this here:
While there are a lot of factors, you really cannot understate the size of the homes being built in the US. We are building homes nearly 3x the size (despite cost per square foot only going up slightly), and pretending it has no effect on housing costs. It's actually pretty insane.
Smith explained how, just a few years ago, $60-$70K a year would have been sufficient to qualify for a home.
"Most people are carrying student loan debt, which is at an all-time high, and the average payment in the country is $500 a month for your college degree. [There are] some people I'm seeing in my comment section saying ‘$500, I wish, it was $1,200 a month for me’," said Smith.
"If you are someone who bought a house before 2020 and you have it paid off or you have a 3% interest rate, you are not burdened by the housing costs like the 2024 adults are now," the relator said, explaining how debt, especially college debt, housing costs and childcare are burdening millennials and Gen Zers starting their lives.
It’s scary how everything seemed to change so fast, yet the ingredients for this very situation have been simmering for some time. It’s no coincidence that since student loans ballooned it didn’t take much for the dominoes to really begin to fall and have drastic effects on everything else downstream.
It died along time ago with the dreamer.
Kill zoning and get lower prices.
With the average cost of a house
Every fucking time with this shit.
The average price isn't the price of a starter home, why do people fall for this clickbait.
That's like trying to use the average price if a car as your starting point for how much you need to make to buy your first car.
Which means about the halfway point between a 1k beater and a fucking 200k rolls royces is what you are pretending a starter car is.
"Oh man the average price if a car is like 80k no one can afford to buy a car"
People are so stupid about this. You can get homes for like 200k to 250k in most major cities, that aren't prime locations but 100% liveable and not a total dump, just need some work. That's not even bottom of the barrel, you can go way cheaper if you want a total dump.
Everytime you see click bait like this, step one is Ctrl+F for the word "average" and you'll find it everytime.