House price to income ratio doesn't tell the whole story because that doesn't include cost of mortgage. A more informative value to compare would be monthly payment to income ratio.
For example, when I bought my first home the price was around 4.5x my income. But the interest rate on that first mortgage was 8.25%
What about factoring in interest rates? After all, people ultimately care about the monthly payments than about the sticker price.
For those in the US who generally fix their mortgages for full-term (25-30 years), this will definitely be offering some relief.
In places like the UK we have the same phenomenon but most people are on 2-5 year fixed rates.
Re:Gen Z does not dream of labor
by heavyset_go on Sunday April 24, 2022 @04:36PM
(#31148067)
> Hopefully the bubble will burst -- but who knows? It could drag on for a very long time.
The median home price in Canada is $800k and rising, while in the US it is $400k and rising. Housing prices in the US could easily double.
> in the US it is $400k and rising
Actually the latest quarter median prices fell in the US, which may continue as interest rates increase.
Broadly speaking though, prices certainly are up over the last couple years.
Historically, the cost of a house has hovered around 4.5 to 5.5x annual median income. It's currently at the highest level it's ever been, at least according to this graph:
https://www.longtermtrends.net/home-price-median-annual-inco....