Many people have a misguided belief that home ownership was easy in the 70s, 80s or even the 90s. Yes the prices were lower and maybe the cost/average income ratio was lower but I can attest to the fact that it was no easy feat even back then.
Plenty of people lost their homes, renters had far less rights and although when looking at things through averages seems to indicate a better off middle class, the wages of the top 10% middle class (Mostly Unionized) were propping up a huge amount of the middle class that were grinding it out living paycheck to paycheck with none of the social safety nets currently in place.
I find it incredulous that so many people are blind to what is coming in the next few years, there is a huge sense of entitlement and victimhood based on some idea that the world was easier back then. We are coming out of what I consider almost 35 years of prosperity resultant from "Winning" the cold war but a reconning is right around the corner.
I don't expect many to take my advise but if I was in debt, renting a home and unemployed, I would stop bitching about minimum wage and would be finding a job real fast, the days of help wanted signs in every window are about to end.
There’s no maybe about it. In the 70s, average house sale price was 4x the average salary. Today it’s 8x.
How many lattes would you need to have skipped to have bought two homes at the time you bought your first? How many holidays would you have needed to skip to pay two mortgages while you were paying one?
That is the scenario - well except todays generation would only have one house at the end of the day, not two.
My house is currently valued at 100K USD that is not an unreachable goal. It might not be right next to your favorite coffee shop but that just one of the sacrifices You make when You want to own a home.
BTW in the 70s we didn't have lattes, it was just plain old coffee and what is this holiday's thing You are talking about? It sounds like something the privileged think they are entitled to.
Of course it wasn't 'easy' to make mortgage payments back then. Mr Market always prices monthly outgoings for housing to some % of typical income.
The difference is those who managed to get on the property ladder in between the 70s and 90s saw falling rates and their LTV ratios being crushed as property prices sawed. Today many of those people live in 7 figure homes in the middle of prime city centers, or bought second properties and became landlords, intentionally or accidentally.
Young people today face the opposite. Just like stock market multiples, housing is at the highest the market can bare. Either we embrace inflation and wages rise, or interest rates rise, the market crashes, and millions upon millions of people end up underwater.
>>>Today many of those people live in 7 figure homes in the middle of prime city centers.
Many of those people live in their same homes, the city grew up around them. At risk of making a generalization, too many young people feel they should get to start at the top. People who bought homes in the 70s spent a lifetime accumulating their wealth, many of them have supported two generations of children and are still working to support the next generation. It is much easier to just throw up your hands and cry out "The World is Unfair". A choice is made to just give up rather put in the hard work required to succeed, that choice is about to go away along with the opportunities that todays youth have squandered.
Hard times are right around the corner, the good news is that housing prices are going to come down. The bad news is it won't make a difference to the people complaining about not being able to afford them as the cost/wage ratio means nothing when You don't have a job.
So what You are saying is You and your partner are Dual Income No Kids or (D.I.N.K.s) and still struggling to get by? Now is the time to make some changes, You probably both have cell phone contracts totaling over $100 USD per month, chances are there is a just as much going out in other digital subscriptions, maybe You even have that stuff that makes your toilet water blue...literally flushing money away.
IDK your situation but have heard the same excuses for a long time. You have the ability to make changes before You get tied down with responsibilities like kids and debt, make the choice to change your lifestyle now before that choice is made for You.
It's a nice fantasy, but you need to brush up on Amdahl's law and apply it to saving. Our rent is currently 25% of our joint take home pay. It's contractually tied to inflation and goes up every year. Housing goes to 40-50% if we buy, but half of that will be equity and the other half at least won't be making my landlord, who owns at least a dozen properties, even wealthier.
And we're not DINKs by choice. We want kids.
I put 50% of my personal take-home salary in to savings/investments and have been doing so for 3 years. We have decided not go give more than token gifts this Christmas as we really want to reach our spring savings goal.
Meanwhile house prices have gone up 10-15% over the last year. I earn good money but if it's this tough for me then believe me when I say it's fucking hopeless for most people my age.
I've also heard this bullshit before from older generations, including my parents. Sure they faced hardships. Different kinds of hardships. Unemployment. Inflation. High interest rates...but don't think people have it any easier today because they're they spend $30/mo on a phone contract. Spending $30/mo on Netflix and Disney+ today is like spending $4/mo on whatever crap people wasted money on in the 1970s. They did it too.
>>>I've also heard this bullshit before from older generations, including my parents.
Mark those words my friend...There is truth in them and one day not too long from now that same BS will be coming out of your mouth, I guarantee it!
On a side note, put some of your savings into physical precious metals it may very well be the only thing that will allow You to prosper in the next decade.
This reminds me of people from a certain generation who say "You'll be more conservative as you get older!" which happened to them because they accrued wealth and assets and (somewhat naturally) want to protect them.
But when you can't accrue wealth or assets (for all of the reasons other posters have listed above), you probably don't end up becoming more conservative as you get older. Quite the opposite.
You're trying to tell us the rules for a game that no longer exists in the way you played it
Yep. I'm pushing 50, and over the last 20 years, I've gone from being a progressive liberal to a Marxist-Leninist. You don't get more conservative as you get older, you get more conservative as you get wealthier.
One of the key issues is around deposits for homes.
When prices are lower, so are deposits. When they're consistently increasing for long periods (with low/no wage growth to boot), deposits become impossible to achieve because price growth outstrips the ability to save.
What you end up with is a large class of renters who can clearly service a mortgage (they service their landlords) but cannot save for a deposit.
Was it a walk in the park in the 70s and 80s? No. But it was possible for a great majority of people. These days, without help for a deposit, you're screwed as an "average" worker in a population centre.
Plenty of people lost their homes, renters had far less rights and although when looking at things through averages seems to indicate a better off middle class, the wages of the top 10% middle class (Mostly Unionized) were propping up a huge amount of the middle class that were grinding it out living paycheck to paycheck with none of the social safety nets currently in place.
I find it incredulous that so many people are blind to what is coming in the next few years, there is a huge sense of entitlement and victimhood based on some idea that the world was easier back then. We are coming out of what I consider almost 35 years of prosperity resultant from "Winning" the cold war but a reconning is right around the corner.
I don't expect many to take my advise but if I was in debt, renting a home and unemployed, I would stop bitching about minimum wage and would be finding a job real fast, the days of help wanted signs in every window are about to end.