News for hackers. Stuff that matters.

A comment on Rents are plunging in the most expensive U.S. markets. Parent comment

Re:Rents are plunging in the most expensive U.S. markets by ehnto on Saturday November 26, 2016 @09:04PM (#13047299)
I would say that easy access to loaned capital has perversed the connection between wages and house prices a bit.
[ Parent | on HN ]
Re:Rents are plunging in the most expensive U.S. markets by gragas on Sunday November 27, 2016 @01:48AM (#13048075)
>easy access to loaned capital has perversed the connection between wages and house prices a bit

Only to a certain extent. Loaned capital is still limited by wages (no one is going to give a $1 million mortgage to someone who makes $40k per year). But again, I don't think wages has hardly anything to do with house prices; it's all about supply and demand. Sure, most people might only be willing to pay 1/3 their salary on housing. That doesn't mean that the price for housing is that number. If a huge supply of housing for less than that price floods the market, then why would everyone continue to pay 1/3 their salary for housing when they could pay 1/4 or 1/6?

[ Parent | on HN ]