this post was submitted on 09 Jan 2024
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On one hand, of course shit is too expensive and wages need to be higher, but on the other, while home priced have increased for sure over the past 2-3 years, the reason they're really unaffordable right now is high interest rates, which adds hundreds to monthly mortgage payments but which is a temporary situation.
There have been periods of high interest rates in the past, and they're always followed by periods of low interest rates. Back when the Fed's interest rate was basically zero for well over a decade prior to 2022, mortgages were cheap, but there were no savings mechanisms where you could get more than 0.5% interest, so everyone plowed their money into the stock market, which put people at higher risk of loss. Now you can find a CD or HYS with a 5.5% APY, which was unheard of before, and which is definitely outpacing inflation right now.
My point is these things come in cycles, and I have hope that mortgages will get cheaper again. This does not mean you will be able to buy a house in Seattle or Boston for the same price as 2005 though, the demand for certain markets has certainly made those markets less obtainable.
House prices have been going up faster than wages for a lot longer than that. There was a lot of talk about how unaffordable housing was when the pandemic struck. Then, central banks globally plunged interest rates to practically zero. So money got really cheap for a while and loads of people jacked up their house prices even more.
They'll come down, yes. But I very much doubt they'll drop as low as before the pandemic. Rates had dropped in 08 after the credit crunch and a lot of central banks had never returned their base rates to their historical average. In my country the central bank had announced a plan in about 2018 to gradually raise the base rate from around 1% to I think it was 4% over the following 5 years.