Home price inflation is so high, it's changing American economic life
Home price inflation is so high, it's changing American economic life
From 1984 to 2023, the median cost of a new home rose 423%, more than double the rate of overall price inflation.
We’ve been dealing with high inflation in this economy over the last several years, with everything from groceries to new vehicles to construction supplies soaring in price.
But for one item in particular — houses — we’ve seen such sharp inflation over decades that it’s starting to change the landscape of American economic life. What happens in society, and in history, when costs for basic necessities, like shelter and food, shoot up in price?
Let’s start by going back four decades, to 1984. The movie “Ghostbusters” was a blockbuster that year. And the median price of a new home wasn’t so scary: $79,900 in the fourth quarter of 1984, according to data from the Department of Housing and Urban Development.
Since then, consumer prices overall have risen 203%, according to the Bureau of Labor Statistics information and analysis section. Meanwhile, the median price of a new home was $417,700 in the fourth quarter of 2023. That works out to an inflation rate of 423%.
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Back in 1960, the US minimum wage was $1.00/hour and the price of the average home was $11,000.00 In those days.
note =if you feel the need to say that houses are bigger today, or we have better technology, please add how inflation was the driver that made that stuff happen.
note =if you feel the need to say that houses are bigger today... please add how inflation was the driver that made that stuff happen.
Zoning was the other driver that made that happen. When developers are required by law to buy a relatively large, expensive piece of land to put a single house on, they have to make the house big and/or luxurious in order to be able to sell it for enough to make a profit.
If you let them subdivide into smaller lots, or build multiple units on the lot, they could charge less per dwelling unit.
(Of course, suburban governments have historically refused to do that because then "the wrong people" (read: blacks, who are poorer than whites on average because of previous institutional racism) would be able to afford them.)
read: blacks, who are poorer than whites on average because of previous institutional racism)
Not to mention current institutional racism.
And while we're at it I think "black people" is better than saying "blacks" (though that doesn't sound as bad as "the blacks").
I'm pretty sure poor people are discriminated against for being poor.
In fact, it's probably the biggest discrimination around in terms of pain caused.
A lot of the pain inflicted against afro-americans comes via the mechanisms that discriminate against poor people, which together with the actual historical racism (along with some current racism) makes sure they're kept down from generation to generation.
How about we just go with boy?
Disclaimer: this comment is not arguing that housing is easily obtainable.
If you let them subdivide into smaller lots, or build multiple units on the lot, they could charge less per dwelling unit.
This is exactly why I encourage people to look at older neighborhoods. In certain spots of the midwest, you can find beautiful 30s homes that were built extremely well: brick, less engineered wood, and the triumph of the home over the filter of time - for less than $70k. The surviving 30s houses were built well enough to survive nearly 100 years. On top of that, those old neighborhood designers knew better than today for exactly the reason you mention. They were trying to build affordable housing, and that manifested itself in smaller houses, more neighborly communities, more proximity to your neighbors, and walkable proximity to surviving corner stores/bars. Oftentimes, modern bus routes run on top of the old school tram lines that serviced these neighborhoods.
If you find one of these gems in a town with a big employer, you could feasibly pay down a perfectly adequate and enjoyable home in less than 5 years - assuming you have an in with the company.
Central IL is a good example what for Galesburg, Peoria, Bloomington, and even Morton.
If you manage to secure a salary at Rivian while fixing up a 30s Bloomington house, I feel you'd be in pretty good shape. I understand that securing a good salary is a huge effort though.
There are a LOT of "ifs" and "assuming" and such in your comment. You combine "spots of the midwest" with "walkability" (something it is not exactly known for in general, though I agree that there are rare spots that are ofc), and while you did list several examples, I wonder how many total houses are for sale there? There are ~330 million people in the USA, so even if there are 330k houses that is still only 0.1% of the total - though granted, not everyone is looking for a home, especially if they already have one (and yet, many older people are looking to downsize, at the same time that younger people currently expanding their families by having children are looking to upsize).
Also, black people and minorities - including women these days -
do not feelARE not safe in many midwestern locations. Paying more to remain alive is arguably a good cost-to-benefit trade-off when the alternative, as evidenced by e.g. Ferguson, MO, could be your death, or worse that of your children. In life you tend to get what you pay for, though some are required to pay more than others. A situation like a woman getting raped, being forced to carry the child to term, but with complications ends up dying herself, maybe leaving behind surviving children, can lead to generational levels of poverty and debt from the medical expenses alone, plus lack of care & training of the children for them to exist in the modern corporate climate where e.g. surliness is punishable by being quickly let go - is the risk-to-reward ratio worth all of that? It should at least be factored in.Internet accessibility is another concern, for those looking to purchase more cheaply while doing the WFH thing. It sounds great to go cheaper / more affordable until you drop too many calls with your boss(es) and get passed up to renew your contract (isn't every job such in the current gig eCoNoMy?), over someone with a tenth your skillset but who kisses butt better than you, including having their wealthy(-ier) parents (contribute to) purchase(-ing) their home for them in a nice(-r) neighborhood with perfect (or at least better) internet.
And how many jobs are even available at Rivian, much less salaried ones? I tried to do a search and was given a quick summary like "5 in my area" but everything wanted to tell me salary amounts rather than number of job openings. Still, I highly doubt that there are hundreds of thousands of job openings.
So while I am upvoting your comment for contributing to the conversation, it all seems extremely niche imho, not able to save most people from their economic hardships, even if it could perhaps work for a thousand or so people, mostly white, and especially unmarried men or possibly infertile women - but even then there are medical considerations affecting everyone too, such as the fact that decent doctors are currently fleeing those states, rejecting lucrative-looking job opportunities b/c of the literal bodily harm that they may come to if they were to go (or remain), and more importantly the ethical dilemma that doing so would entail. Also, even for a white person, how great is it to be surrounded by people talking about black people as sub-human; or for a man to be surrounded by such talking about women not being capable of making choices for their own bodies; or for a straight person... - well you get the idea? Do not underestimate the amount of stress that this causes - b/c if you ever let slip that you sympathize, you can be branded a "traitor", which can earn you some far worse treatment than even members of that "other side" - e.g. look at how Pence was treated, more so than e.g. Nancy Pelosi who was legit on the actual, other side, but him they wanted to literally behead with a irl physical guillotine.
Still, I am glad you mentioned it, I only take issue with the things left out like how it is not available to everyone, and the problems that even those that can do it would face. I hope this also added to the conversation.
It used to be a lot more possible up until about a decade ago, even in Sunbelt cities like Atlanta.
Oh absolutely yes. I mean, prior to Roe v. Wade being overturned, it was even relatively safe for women there too, I would guess.
Back when I was on Reddit I used to read a lot of posts on nursing subs, and I recall a story where some guy brought in federal funding to start an entire institute somewhere east of Springfield, Missouri iirc. Think of all those jobs... However, he cancelled it and left the state b/c of all the literal death threats he received during the early days of the pandemic. AN ENTIRE INSTITUTE!!?!! And iirc he wasn't even so much concerned with himself as his family like his daughter. 2020 was not a "safe" place for a medical researcher to be in Missouri. That state is actually somewhat known for this too - e.g. that is where Hawley was the only senator to vote against a child sex slave trafficking bill (surely there could not be any uh... nefarious uh... "reasons" for such, wink? 🤮).
A mere house with four walls and a roof over your head is not a home. People outright desire to pay for solid rather than unreliable infrastructure - electricity, policing, services like trash collection, a bridge if you need it, etc. - these things cost money, at which point the corporations tacking on enormous overheads to price people out of owning a "good" home is an actual travesty of justice, that will literally get people killed, as they instead have to compromise on something, like access to medical care and safety.
Edit: I don't know about Atlanta in particular, but any actual "city" will be liberal (I would guess?) - e.g. not have full-on card-carrying KKK members as their police, and that one with the CDC I would guess would have good healthcare? Even if someone had to drive a bit to get to it.
Why do the fake edit?
Emphasis.
It took me a while to realize what you meant:-). Expanding upon grue's comment that described it perfectly, we do that here often to represent saying something "under your breath", or alternatively saying the REAL thing, either inside or outside the strikethrough depending on context. In this case it depicts like someone in a stream-of-speaking manner might state "...days - do not feel, no wait, strike that, ARE not...", to emphasize how someone might feel at first that it is a mere feeling, but wait no, it's actually so much more than that, it is an absolute fact. :-)
I agree with all your points. And just to be clear, my position is definitely not "look, idiots, we could solve the home affordability issue if people knew that the midwest existed" but instead just "for some specific people, these small 30s midwest towns could be promising and worth looking into."
W00t! I make $22 and just bought a house for 100,000!
Things are finally looking up for ol Gil
That seems not at all unreasonable compared to other salaries/prices today. You must live in a very affordable area.
Fucking seriously... I make $30/hr and can't even dream about buying in my area... Anywhere in my area... Hours and hours away, still not even close. The closest area to me that I could consider is roughly 6 hours away...